ARM CASE STUDY 18/9/13 11:50 Page 2

A vision for a smarter world

S T R AT E G Y

Introduction • Demand for energy efficient technology – the market demands

high performance products using low power technology.
Inventions, literary works, music and design are all intangible
assets. The legal right to these ‘creations of the mind’ is referred This case study will demonstrate how ARM’s strategies contribute
to as Intellectual Property (IP). ARM Holdings is the world's leading to the achievement of its business vision, aims and objectives
semiconductor Intellectual Property (IP) supplier. A semiconductor using an integrated approach focusing on innovation, its people
is the electronic controller at the heart of many devices that we and its network of partners.
use every day, such as Smartphones, tablets, digital televisions
and washing machines. In fact, ARM IP is at the heart of 35% of Vision, aims and values
all consumer devices worldwide.
An organisation’s vision outlines what the company wants to achieve.
ARM has an innovative business model. ARM does not manufacture A vision should be aspirational and inspirational for stakeholders,
the products in which its technology is used. Instead ARM creates especially employees. ARM’s vision is: ‘To create a world where all
the technology that is then used by other companies – its partners. electronic products and services, based upon energy efficient
These partners incorporate ARM IP with their own technology to technology from ARM, make life better for everyone.’ This vision will
create smart, energy-efficient chips suitable for modern electronic affect every aspect of the business. All strategic decisions will be
devices. ARM licenses its IP for a one-off licence fee and then geared towards making this vision a reality.
receives royalty fees for every chip that contains its technology. ARM
To help deliver the vision, an organisation will set aims. Aims
effectively acts as an outsourced research and development (R&D)
describe what the business intends to do in the long-term. In
department to its network of partners.
order to achieve its vision, ARM aims to:

With its headquarters in Cambridge (UK) and offices around the • attract and retain the best talent globally

world, ARM employs over 2,500 highly skilled people. To maintain • continue to grow the business to ensure maximum revenue to

its market leading position, ARM carefully monitors changes in its develop new technologies through R&D and also deliver funds

external environment to ensure it can continue to outperform its for shareholders

competitors. Analysing these changes allows ARM to establish • promote collaboration and shared learning through its network

opportunities, threats and challenges. Key opportunities for of partners.

growth include:
• Advancements in technology – including machine-to-machine
communications between smart sensors, referred to as ‘The
Internet of Things’. For example, appliances in the home that
can be monitored and controlled wirelessly by the homeowner
wherever they are.
• Market development – increasing market share in new markets
such as servers and networking equipment. ARM’s technology
is well placed to provide lower power options to transport,
distribute, analyse and store data across the internet.

Curriculum topics covered: • Vision, aims and values

• Business strategy • SMART objectives • Culture
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ARM has seen dramatic growth in recent years. To continue to

expand the business ARM has identified three main drivers for
growth which are identified in the table. Through focusing on
these three areas, ARM aims to continue to grow and maximise
revenue.

Growth driver Strategy

Increase market ARM has achieved more than 95%

penetration penetration of the mobile market.
However, ARM is involved in far more
than mobiles. From the 10 billion chip
designs sold, over 5 billion go into things
that are not mobiles. As other end-
ARM’s biggest asset is its people. Due to the knowledge-intensive markets require smarter processors,
nature of the business, ARM relies on its innovative and highly ARM hopes to increase its market share
skilled employees to maintain its market leading position. in other application areas such as smart
Maintaining its highly motivated workforce is therefore a key aim. TVs, routers and servers.

To aid the achievement of its aims, ARM has set seven core
Increase value per As consumer products become
business values. A company’s values demonstrate the things it
smart electronic smarter they often contain multiple
deems to be of the upmost importance. These values underpin
device ARM chips, increasing the royalty fee
everything that the company does. ARM’s core values include: opportunity. Smartphones and TVs can
• Teamwork and selflessness – sharing information and generate 5-10 times more royalty than
knowledge openly both internally and externally. a basic model.
• Constructive pro-activity – developing practical solutions with a
‘can do’ approach. Develop and Develop new technology through
• Partner and customer focus – understanding their needs. license new continued investment in R&D to create
• Responsiveness – always reacting with a sense of urgency. technology additional revenue from royalties.
• Innovation – developing practical solutions to problems.
• Personal development – through training, coaching and
mentoring. ARM HR strategies support its growth strategies. By attracting and
• Delivery of results – using expertise to benefit ARM. retaining people with high levels of skills and expertise, ARM can
continue to develop the competencies which give it a competitive
These ARM values support the achievement of its vision and aims. advantage and enable it to drive its vision forward. To do this ARM’s
They also compliment its business model and demonstrate the HR team must ensure a pipeline of talent through workforce planning
company’s focus on its workforce. An organisation’s vision, aims and recruitment. Training and development opportunities also help to
and values all influence the development of plans for the future ensure a motivated workforce that will ‘live’ ARM’s values.
direction of the company, namely its business strategies.

Strategy
A business strategy is the plan by which aims and objectives will
be put into action. Objectives are the specific targets to achieve
the aims. Without business strategies in place an organisation will
not have a clear direction so would be more likely to fail. ARM has
a number of strategies in place to achieve its aims and contribute
towards its vision. These include strategies related to growth,
Human Resources (HR) and its network of partners.

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SMART
S • Specific

M • Measurable

A • Agreed

R • Relevant

T • Time-framed

Through the setting of SMART objectives, ARM is able to plan for

the future to aid the achievement of its business strategies. ARM
SMART objectives are influenced by many factors, for example,
the innovative and technical nature of the business requires a
highly skilled workforce. A functional objective for its HR strategy is
that 30% of new recruits in 2013 will be graduates. This figure will
increase to 40% in 2015 and 50% by 2017. A tactic that supports
this objective is that ARM has a strong presence at the leading
Dramatic growth has meant the ARM workforce has increased by universities’ careers fairs around the world. It also runs a two-
40% in the past three years. As over 80% of ARM employees are week Global Graduate Conference that enables new graduates to
educated to degree level or higher, this growth has created a become more effective in a shorter space of time. This objective
challenge for the ARM HR team. During workforce planning, gaps and tactic supports its business aim to attract and retain the best
can arise between what ARM wants to achieve (its objectives) and talent globally, as well as promoting the company’s value of
the resources available to achieve them. These strategic gaps are personal development.
dealt with through Human Resource Management (HRM). One such
strategic gap is attracting sufficient young people with scientific skills Another ARM SMART objective is to have an overall market share
to meet the growing needs of the business. To overcome this gap of between 40% and 50% by 2017. In 2012 ARM’s market share
ARM promotes the importance of science, technology, engineering was 32%, an increase of 2% to 3% per year for the last five years.
and maths (STEM subjects) to young students. The growth drivers of increasing market penetration and value per
smart electronic device support this objective, and as ARM
The ARM ecosystem strategy supports its business model. ARM’s partners use ARM technology in more of their products the
people develop effective relationships with over 1,000 companies company’s market share is set to continue to grow.
that licence ARM technology. The working environment that ARM
has created is referred to as its ecosystem of partners. These
relationships stimulate innovation between companies to develop
the next generation of products. As well as attracting new
partners, a large amount of growth occurs when existing partners
upgrade their ARM processor to the next generation. This strategy
directly supports ARM’s vision and its aim of shared learning.

Delivering a strategy
Behind every business strategy are tactics. Tactics are the means
by which the strategy will be implemented. Objectives, which can
be set at a function level or for the whole business, outline the
outcomes the business needs in order to achieve its aims. The
SMART objectives model helps ensure that objectives are
achievable. It states that objectives should be:

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www.arm.com

ARM involvement with Code Club and the Raspberry Pi

Foundation aims to increase children and young adults’ exposure
to computer programming and the opportunities available through
studying STEM subjects. It is hoped that this will help develop the
necessary skills to be technology leaders of the future. This
demonstrates how ARM CSR activities bring benefit to both the
charities and ARM’s HR strategies of workforce planning.

Conclusion
In a technology driven industry, ARM IP allows its partners to meet
the demands of their markets. As consumers expect more and
In relation to increasing penetration in new markets, a SMART
more from the performance of their digital devices, ARM
objective has been set that by 2017 ARM aims to have a 10% to
technology creates innovative solutions that enable its network of
15% share of the IT server market. This supports the growth
partners to meet these demands.
strategy of market penetration. Networking servers are a new
market where ARM technology is increasingly being used by its
ARM’s vision, culture and values, coupled with clear, well-defined
partners, however, ARM had no market share. To evaluate and
strategies, have enabled the company to maintain its market
test its technology in this market ARM invested in R&D throughout
leading position in its core markets whilst experiencing dramatic
2012. This enabled ARM to generate technology used in several
growth in several new areas. Its focus on its workforce and its
commercial products in 2013.
ecosystem of partners have created a culture of trust and open
communication where individuals and innovation can thrive to
Culture
create the technological products of the future. These benefit the
As well as external factors, many other factors within an company’s key stakeholders, partners and society in a sustainable
organisation have a huge impact on its business strategies. Every way that few other companies can compare with.
organisation has a typical way of doing things, known as the
organisation’s culture. This particularly relates to employees’
behaviour patterns and relationships. A culture is not developed
overnight, it takes time to build and will be heavily influenced by
the organisation’s vision and values.

ARM’s culture is one of honesty and accountability. This in turn

creates trust amongst its employees and stakeholders and
supports its values of team building and its ‘can do’ approach.
The leadership at ARM creates a supportive working environment
by using its personal development and ecosystem strategies to
maximise employee potential and innovation.

ARM Corporate Social Responsibility (CSR) initiatives both reflect and

enhance the company’s culture and HR strategies. CSR involves
taking into account the wider needs of society to ensure the 1. Describe a key growth driver for ARM. (2 marks)
Exam-style questions

business has a positive impact. In 2012, ARM set a CSR objective to 2. Explain the difference between business objectives
develop relationships with charities to create long-term value for both and tactics. (4 marks)
the charity and ARM. This was achieved using the following tactics: 3. Analyse to what extent the culture at ARM supports its
• ARM entered into partnerships with Code Club and the Raspberry vision and aims. (6 marks)
Pi Foundation to encourage the development of skills in computer 4. Evaluate the effectiveness of ARM’s focus on
programming and STEM subjects amongst young people. employee development in maintaining its market
• ARM is committed to helping both causes through financial leading position. (8 marks)
and mentoring support.

ARM | A vision for a smarter world