NVIDIA’S STRATEGIC DEVELOPMENT
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Table of Contents
1.0 Introduction..........................................................................................................................2
2.0 Three-horizon analysis.........................................................................................................2
3.0 Stakeholder Assessment.......................................................................................................5
4.0 Proposed Strategic Direction................................................................................................8
5.0 Conclusion............................................................................................................................9
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1.0 Introduction
NVidia is a leading technology company involved in the production of graphic processing
units (GPU), data centers, and professional visualization. However, the company has become
widely successful due to its involvement in the production of artificial intelligence (AI)
applications and related technologies. This report evaluates Nvidia’s strategic development
through the corporate social responsibility and sustainability lens using a range of
frameworks. Specifically, the analysis will encompass theories, models, and frameworks
from the field of strategic management, business ethics, and responsible organizational
contexts.
2.0 Three-horizon analysis
According to Sharpe et al. (2016), the three-horizon framework is a tool employed in
strategic planning. The framework offers three tools that can be used in implementing
planning based on three horizons: the short term, the medium term, and the long term. Each
horizon is focused on distinct features of growth, innovation as well as long term
development.
Horizon One
NVidia’s core business entails its supremacy in the production of GPU units and related
technology. As per Gong (2024), the company has historically focused on the production of
GPU units targeting the gaming sector. However, this trend has changed as the company has
become increasingly focused on the artificial intelligence sector, where its GPUs have proven
integral for the running of large language models. Horizon 1 is the key driver of NVidia’s
revenue generation. In the 2023 financial year, for instance, the revenue generated from the
gaming sector reached $9 billion, whereas that from the data center was estimated at $ 15
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billion. Notably, the competitive pricing, ecosystem support, and performance differentiation
embraced by the company have been key to the company's success.
Horizon Two
Horizon 2 is concerned with scaling of business operations through innovation and creating
new products. In line with this horizon, NVidia has implemented radical expansion measures
in the recent past including the venturing into the production of autonomous vehicles.
Specifically, the venture has enabled the company to invest in autonomous driving
technologies based on partnership with various forms such as Mercedes Benz, Toyota and
Tesla.
Aside from that, the company has increased its role in machine learning and artificial
intelligence technologies. In essence, the company has been one of the key drivers behind the
rapid rise of artificial intelligence and machine learning. According to von Zitzewitz (2024),
the increased role of machine learning and artificial intelligence has been a major driving
factor behind the rise in company value in the recent past. Notably, these developments have
enabled the company to expand its value position beyond the production of GPUs for games
to other consumer markets. Consequently, NVidia’s GPU, such as the H100 Tensor Core, has
emerged as an industry leader, with their use being critical for the training of large language
models.
Apart from that, NVidia has invested in healthcare and genomics, where the company has
leveraged the unique capabilities of its GPUs in the optimization of consumer experience.
Notably, NVidia Clara possesses significant computational power and imaging capabilities, a
combination of which has been integral for the actualization of drug discovery. According to
Alcaín et al. (2021), NVidia has been one of the leading drivers towards technology
integration in healthcare research through the constant improvement in computer processing
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power. The demand for NVidia products was further enhanced by the rising healthcare
challenges during the pandemic. As Armental (2020) has shown, NVidia was one of the few
companies that exhibited sustained growth during the pandemic. The above condition is
reflective of the increased integration of technology into various healthcare practices
Horizon Three
Horizon 3 is concerned with the long term targets specifically encompassing the speculative
innovations that could inform the firm’s future developments. One of the areas where this is
exhibited is in regards to quantum computing where the firm has been involved in
advancement of computational performance. The firm’s efforts in this area have been further
supported by its engagement with start-ups key on optimizing advances.
Aside from that NVidia has ventured into sustainable computing with a focus on ensuring
energy efficiency and the attainment of carbon neutral levels. The venture in sustainable
computing positions the company as a leader in the transformation that will support
environmental consciousness in computing.
Sources of NVidia’s competencies
Value chain analysis
Inbound logistics Partnerships with TMSC, an advanced chipmaker, have
enabled the company to acquire vital resources for its
GPUs
Operations The highly skilled workforce has been key in the
production of high quality GPUs. This has been key in
preserving NVidia’s position as a leading player in its
industry.
Marketing and sales The emphasis on targeted advertising combined with
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brand equity and partnership with original equipment
manufacturers have supported its sales.
Technology development NVidia’s substantial investments in research and
development are key to the continued advancement of the
firm’s technologies.
Customer support An effective community engagement combined with a
wide array of tools offered to the consumers has been key
towards optimizing customer support.
Resource-based view
Tangible resources NVidia’s tangible resources entail intellectual property and
highly refined fabrication techniques.
Intangible resources Strong developer ecosystem combined with a highly
regarded brand.
Capabilities Rapid innovation of products combined with strategic
vision in emerging market segments.
3.0 Stakeholder Assessment
Instances of corporate social irresponsibility (CSIR)
In the recent past, NVIDIA has experienced widespread criticism largely due to its lack of
corporate social responsibility measures. The criticism was driven by environmental concern
that the firms operations were energy intensive hence undermining the efforts to reverse
global warming. Additionally, the firm has been accused for its lack of positive labour
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practices; notably the firm according to the criticism provides its employees poor working
conditions.
Antitrust issues have also deterred the firm’s image in the recent past. Notably NVidias
attempt to acquire ARM was not approved based on concerns that it would result in the
promotion of monopolistic practices in the industry. The opposition to the acquisition led to
increased anxiety and concerns among the company stakeholders.
Stakeholder Impact
Stakeholders have been affected by the failure to optimize energy consumption. Specifically,
the energy consumption of the GPU is relatively high, which goes against the values of such
stakeholders, given that it undermines environmental protection. This aspect has had a
damping effect on consumption as such individuals find it contrary to their values to utilize
higher than necessary amounts of energy. This assertion further echoes scholarly research,
which shows that consumers today are interested in green products; such individuals are
unlikely to consume products that are detrimental to the environment (Majeed et al., 2022).
Aside from that, the company has been accused of labor violations. Specifically, the poor
working conditions have undermined contractor and employee productivity. It is worth noting
that employee productivity is largely hinged on the conduciveness of their environment. The
lack of such conditions will likely have a negative impact on NVidia’s productivity levels as
well as its capacity to align with the highest standards of quality. On the other hand, the
inability to ensure good working conditions for the contractors ended up affecting the firm's
supply chain. For instance, the conditions have been partially responsible for delays in
delivery times.
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Conversely, antitrust issues have undermined consumer trust on the organization. Specifically
the halting of a takeover portrayed the company as being interested on the expansion of its
operations to the detriment of consumers who would be subjected to monopolistic practices.
Rectifying CSIR and Building Stakeholder Relationships
Measures put in place
NVidia has put in place various strategies to address CSIR and stakeholder relationship
issues. One of the initiatives has been the implementation of sustainability initiatives, where
the company has pledged to achieve carbon neutrality and the introduction of energy-efficient
products by 2030. Additionally, the company has embraced transparency in its operations
through improved regularity compliance and engaging in open dialogue with various
stakeholders in the field, such as antitrust agencies (Cielo et al., 2021). These steps have been
informed by the need to adhere to ethical principles in the expansion of company operations.
Investment in Stakeholder Relationships
NVidia has recently engaged in a partnership with other firms in the renewable energy sector
with the aim of addressing environmental concerns. In essence, the partnership is aimed at
supporting the firm’s efforts to address energy waste concerns associated with the
manufacturing of GPUs.
Additionally, the firm has increased its focus on employee engagement, which is attributed to
improved benefits offered to the workers and the introduction of better safety measures for
the employees (Abdulrahman et al., 2022). The combination of the above measures has been
key to the development of a positive environment for employees and subsequently improving
their productivity (Juba, 2024).
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Also the firm has strived to improve consumer trust through the enhancement of transparency
across key operations. For instance the firm has embraced transparent pricing as well as
enhanced customer service. In essence NVidia has been focused on enhancing consumer
confidence.
Evaluation of Efforts
Although NVIDIA has taken decisive measures in the rectification of its CSIR issues, areas
such as full supply chain accountability as well as outright environmental neutrality remain
beyond its reach. Consequently it would be integral for the business to engage with
stakeholders through transparent communication techniques as well as collaborating with
stakeholders in the attainment of long term success.
4.0 Proposed Strategic Direction
Based on the above observations, NVIDIA should integrate the following measures to
enhance CSR.
Short-Term Recommendations
In the short term, there should be an enhancement of supply chain monitoring. This objective
can be achieved through the interaction of AI driven technologies and in compliance with
environmental and labour practices (Helo, and Hao, 2022).
In regards to energy efficiency, the firm should introduce low power GPU’s in its goal of
meeting the needs of environmentally sensitive stakeholders. In essence the adoption of this
line of GPU’s could be further optimized by encouraging its use in data centres. In terms of
stakeholder engagement, there should be the adoption of clear communication channels for
interaction with stakeholders such as consumers (Yasir et al., 2022).
Long-Term Recommendations
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In the long term, the firm should embrace circular economy techniques. This measure will
optimize the recycling of GPUs that have reached end-of-life stages and reduce the negative
environmental effects of their technologies through proper management of e-waste (Kumar
and Verma, 2021). Additionally, the company should invest in carbon exchange projects as
well as renewable energy sources as a means of attaining carbon neutrality in line with its
2030 vision. In terms of ethical practices, the firm should put in place a global AI ethics body
that will be responsible for providing guidance on the response use of technologies associated
with the firm.
SAF Analysis
Suitability
Such strategies are aligned to global sustainability standards, meet CSIR concerns and are
relevant to NVIDIA’s core competencies thus, fitting with the stakeholder expectations.
Acceptability
It is expected that customers, regulators, and investors will favourable respond to calls for
increased transparency, sustainability, and innovation since they are ethical and market
trends.
Feasibility
The strategies outlined above can only be implemented by NVIDIA and its practical adoption
is guaranteed by the company’s financial and technological capabilities and partnerships with
key clients.
5.0 Conclusion
NVIDIA has acted mostly responsibly in terms of its strategic management and is mostly in
line with stakeholders’ expectations in terms of sustainability and ethical consideration.
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Mitigating past scandals such as CSIR and fostering enduring commitments to stakeholder
constituencies offer NVIDIA better preparedness for a constructive, moral, and sustainable
tomorrow for sustainable growth and tolerant stakeholder value.
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