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NVIDIA - Strategic Management Presentation
The document discusses NVIDIA's strategic management. It provides an overview of the company, including its founders and products. It then analyzes NVIDIA's business performance through financial metrics like revenue, profitability, and financial leverage. Next, it examines NVIDIA's internal capabilities, such as its focus on R&D, leadership in the GPU market, and strengths/weaknesses. It also reviews industry fundamentals using Porter's Five Forces model. Finally, it discusses NVIDIA's strategy and competitive advantage in growing markets like AI and competition from companies like AMD and Fujitsu. The conclusion notes NVIDIA's overall sales growth and decreasing costs, driven by gaming, with potential future growth from automotive.
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NVIDIA - Strategic Management Presentation
- 1. NVIDIATeam: Rohan, Li,Zoila, Frank January 2018 Strategic Management Frank Cunha III, AIA Executive MBA Program Montclair State University
- 2. 1. OVERVIEW OFCOMPANY – ZOILA 2. BUSINESS PERFORMANCE – LI 3. INTERNAL CAPABILITIES – FRANK 4. INDUSTRY FUNDAMENTALS – ROHAN 5. STRATEGY & COMPETITIVE ADVANTAGE – ZOILA 6. CONCLUSION – LI NVIDIA’s Strategic Management
- 3. NVIDIA – CompanyOverview
- 4. FOUNDERS Jensun Huang,Chris Malachowsky and Curtis Priem NVIDIA’s Strategic Management
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- 6. Categories of NVIDIAProducts
- 7. NVIDIA – BusinessPerformance
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- 14. NVIDIA – InternalCapabilities
- 15. NVIDIA’s Internal Capabilities Focuson research and development activities Leader in the GPU market Strategic presence in high growth markets S Strengths Lack of scale as compared to peers Dependence on third-party foundries WWeaknesses Growing global automotive industry Increasing demand for virtual reality Positive outlook for high performance CPU market O Opportunities Fierce competition could impact market share Rapid technological changes TThreats Source Marketline.com NVIDIA Corporation SWOT Analysis
- 16. NVIDIA’s Internal Capabilities Source:The Embiggening Best Semiconductor Stock For 2017? Advanced Micro Devices Vs Nvidia Corporation 1 Number of Employees 9,227 2 Sales Growth 26.31% 3 Return on Equity % 5 Year Ave 13.18% 4 $46.6BEnterprise Value 5 $50.3BMarket Capitalization 9,139 -3.46% -9.52% $8.6B $8.3B Vs AMD
- 17. NVIDIA’s Internal Capabilities 1Gaming $1.3 B 2 $501 MData Center 3 $239 MPro Visualization 4 $191 MOEM & IP 5 $144 MAutomotive $2.6 BTotal Source: NVIDIA.com
- 18. NVIDIA’s Internal Capabilities Source:The Embiggening Bite That GPUs Take Out Of Datacenter Compute
- 19. NVIDIA’s Internal Capabilities Source:NVIDIA.com Computing Data Centers & Super Computers Gaming GraphicsGPU Gaming AI Cars AI IoT Community
- 20. NVIDIA’s Internal Capabilities Source:NVIDIA.com
- 21. NVIDIA’s Internal Capabilities Source:Yahoo Finance
- 22. NVIDIA – IndustryFundamentals
- 23. Five Forces Threats of New Entrants Bargaining Powerof Suppliers Bargainin g Power of Buyers Threats of Substitute Products or Services Rivalry among the Existing Competitors • Build economies of scale, to reduce fixed cost per unit • Build economies of scale, to reduce fixed cost per unit • Rapidly innovating new products • By being service oriented rather than just product oriented By building a sustainable differentiation NVIDIA’s Industry Fundamental
- 24. • Gaming industryhas evolved over the years from black-and-white 2D games like Pong to 3D game, 3D Monster Maze. • Also from primitive first-person shooters like Wolfenstein 3D (1992) to complex, life-like shooters like Battlefield 3 (2011) • Also what we see is that Gaming industry is heading towards uncharted territory and seeing more of cloud base , VR, Secondary Screens, Smart Glass, Open Source, Augmented Reality NVIDIA’s Gaming Industry Journey
- 25. • Technology Failures:- •GeForce forums and Reddit are filled with consumer complaints regarding boot failure, flickering • The company has a failure analysis lab to fix the issues reported. • Dependence on foundry:- • Outsources its manufacturing work to Taiwan Semiconductor Manufacturing Company (TSM) exposes company to the risk of product delays or missed design cycles in case of Natural Disaster. NVIDIA’s External Impacts
- 26. • Poor adoptionof technology • NVIDIA is building technology on the anticipation of increased demand for graphics processing units due to the increased adoption of VR • If the market doesn’t grow as anticipated, NVIDIA’s earnings will be negatively affected. • Competition • In fiscal 2016, NVIDIA reported strong growth as its biggest competitor Advanced Micro Devices (AMD) lost market share due to delays in product launches, which rendered its products outdated. • However, NVIDIA has more cash to spend on R&D (research and development) compared to AMD, which is struggling for cash. NVIDIA’s External Impacts
- 27. NVIDIA – Strategy& Competitive Advantage
- 28. NVIDIA (NVDA) wasone of the biggest winners on the stock market in 2017, rising 82% as demand for its graphics processing units (GPUs) spiked thanks to their usage in emerging applications such as machine learning and artificial intelligence. In terms of AI will get more competitive Although, NVIDIA has been one of the pioneers in the field of artificial intelligence, stealing a march over its rivals thanks to its GPU expertise. The company's GPUs have been widely adopted in data centers and other applications because of their massive computational power, which is derived from the thousands of cores present inside. NVIDIA’s Rapid Growth & Competitors
- 29. AMD are oneof biggest Nvidia competitor from the super-powerful AI process NVIDIA’s Competition
- 30. It is increasinglylooking like the future belongs to artificial intelligence. Two of the hottest stocks in that industry are Nvidia (NVDA, - 0.49%) and Advanced Micro Devices (AMD, - 0.99%). The strength of those stocks is largely attributable to the excitement around the artificial-intelligence capabilities of their processors. NVIDIA’s Competition
- 31. • Fujitsu (FJTSY,-0.16%) of Japan. Fujitsu produces some of the most advanced processors for super computers. Fujitsu also produces processors for SPARC servers. SPARC servers have been popular and are now owned by Oracle (ORCL, +1.14%) after the company bought Sun Microsystems. Other Heavyweight Competitor
- 32. Strategic and CompetitiveAdvantage • As CEO how would I help Nvidia sustain its competitive advantage and keep company on a high growth trajectory? Conclusion
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- 35. • Nvidia isa healthy and growing company. It shows an overall positive sales growth in a 10- year’s time combined with a consistently decreasing operational costs. • Currently its sales growth largely determined by the gaming specialized market, reflected by its GPU business segment • In the future, automotive business is very likely to be another promising revenue source Conclusion
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Editor's Notes
- #4 Nvidia deals in programmable graphics-processor technologies. Its major business segments are graphics processing units, media and communications processors, and handheld and consumer electronics.
- #5 Company Overview NVIDIA Nvidia was founded in 1993 as a graphic chip design & engineering company by 3 men Jensun Huang, Chris Malachowsky and Curtis Priem who had found success in the growing market of personal computer (PC) hardware. The name is a play on the name Invidia, the roman name for the ancient Greek “Titan”.
- #6 This company is focused on visual graphics for the ever-growing computing market. In 1999 the company release its invention, the worlds 1st graphic process unit GPU for the PC market, the GeForce 256. Many of the world’s devices use Nvidia products due to the products being so powerful they can support almost any device.
- #7 Key strategies that have led to the competitive advantage Do you anticipate the company’s competitive advantage to strengthen or weaken in the future, and why?
- #16 Distill the key strengths and capabilities of the company. Focus on research and development activities Leader in the GPU Market Strategic presence in high growth markets Are there any capabilities that the company lacks for future growth? Lack of scale as compared to peers Dependence on third-party foundries Fierce competition could impact market share Rapid technological changes Opportunities: Growing global automotive industry Increasing demand for virtual reality Positive outlook for high performance CPU market
- #17 What factors determine the level and trend of the profit margins (gross and operating)? Selling price Selling volume Reduced operating costs What are the company’s cost structure, efficiency, and how are they determined by its business model? As Li explained, Nvidia does a better job than its competitors with ROI, ROA, ROE What is the core competency of the company that adds the most value in its value chain? Graphics Processing Unit or “GPU” Business Sectors & Research R&D and Intellectual Property
- #18 What are Nvidia’s Internal Capabilities? Nvidia has been capitalizing on grassroots knowledge in gaming and data centers The company has transition into professional visualization Nvidia’s ability to capture market share in the Blockchain industry has also contributed to their success utilizing fast and efficient GPU processors. And now Nvidia is using what they have learned and has applied it to the automotive industry, particularly the growing and evolving Autonomous Vehicle market
- #19 OEM & IP Original Equipment Manufacturer & Intellectual Property The next big growth will be from the world of Autonomous Vehicles The race is on for who will lead the market and Nvidia is in a great position compared with AMD but still has a long way to go to get to Intel status
- #20 Does company have a superior mix of products/services, and how so? Nvidia definitely has a mix of products and has done a great job of selecting strategic partners to accelerate its research and development in the Artificial Intelligence realm. Compare the company’s product/services from those the competitors to see the points of differentiation. Born from high demanding CPU gaming and computing and growing into high-end graphic visualization for professionals the company has grown strategically to compete with larger organizations What has been driving the revenue and revenue growth: brand recognition, technological innovation, or something else? Diversity of products
- #21 What has been driving the revenue and revenue growth: brand recognition, technological innovation, or something else? R&D has led Nvidia to clock faster and more energy efficient processor to facilitate Blockchain mining, specifically those mining BitCoin
- #22 Based on the changes happening in the industry and environment, how is the company positioned to capture future growth? I believe this slide speaks for itself Do you anticipate the company’s growth rate to slow down in the future? Much of Nvidia’s success is tied to the success of it’s partners in the artificial intelligence and autonomous vehicle industries as well as computing regarding blockchain computing And now I will turn it over to Rohan who will speak to you about industry fundamentals
- #33 If you were the CEO of the company, what would you need to do to help the company sustain and increase its competitive advantage, and keep the company on a high grow trajectory?
- #34 If you were the CEO of the company, what would you need to do to help the company sustain and increase its competitive advantage, and keep the company on a high grow trajectory?
- #35 If you were the CEO of the company, what would you need to do to help the company sustain and increase its competitive advantage, and keep the company on a high grow trajectory?
- #36 If you were the CEO of the company, what would you need to do to help the company sustain and increase its competitive advantage, and keep the company on a high grow trajectory?
- #37 If you were the CEO of the company, what would you need to do to help the company sustain and increase its competitive advantage, and keep the company on a high grow trajectory?