SM I Assign2

7/31/2019 SM I Assign2

http://slidepdf.com/reader/full/sm-i-assign2 1/8

Study of 5 forces

Factors driving the EDA Industryand

Critical Success Factors

& Cadence Design Systems’ position WMP 7 Group - 10 Section – B

(Members)

Ashish Narula (wmp7084)Jitendra Sharma (wmp7096)Poulastya Dutta(wmp7010)

Pramukh Singh Rawal(wmp7111)Prashant Joshi(wmp7112)Priyank Pathak(wmp7113)

Strategic Management –

I



CADENCE DESIGN SYSTEMS

Company Description

Cadence is the global technology leader insoftware, hardware, IP, and services for

electronic design automation (EDA) that isleading the transformation of the industry.

By delivering crucial design technology for creating, integrating, and optimizing

designs, Cadence enables customers torealize silicon chips, systems-on-chipdevices, and complete systems at lower costs with higher quality.



COMPETITIVE FORCES EDA INDUSTRY FACES

Rivalry among Competing Sellers Entry barrier in EDA industry is low Intense competition to attract acquisition targets Switching cost of the customer is low Competition is on the basis of quality, product features, and level of integration

or compatibility with other tools, price, payment terms and maintenance offerings

Threat of New Entrants Existence of “Design gap” in the EDA industry

EDA industry is characterized by a very high frequency of corporate acquisitions



COMPETITIVE FORCES EDA INDUSTRY FACES

Threat from Substitutes Adoption of cloud computing technologies Growing number of low-cost engineering services businesses Increased technological capability of the Field-Programmable Gate Array

Supplier Bargaining Power Suppliers are majorly educational institutions Competition for highly skilled employees is intense in areas recognized as high technology

centers High cost of training

Buyer Bargaining Power

Design companies have huge bargaining power Mergers or acquisitions of the design companies increases the customers’ bargaining

power in negotiations with their suppliers Electronics manufacturers sometimes perform engineering services internally and this

would mean operating losses for EDA firms.



ATTRACTIVENESS OF EDA INDUSTRY AND

CADENCE’S POSITION

Dynamic markets like those for mobile devices, video, and cloudcomputing are experiencing rapid growth.

Entry barrier to EDA industry is low and a number of startup companiescome up every year.

The continuous shrinkage of the size of process features and other features, represents a major challenge for participants in thesemiconductor industry

Novel design tools and methodologies must be invented quickly toremain competitive

This situation presents a very good opportunity for EDA companiesto innovate and grow.



Cadence’s position

Revenues of Cadence have been consistently growing post the greatrecession and they have once again breached the $1 billion mark in2011-12.

Growth has been driven by expanded adoption of Cadence’s existingproducts, introduction of exciting new products, and successfulcollaboration with industry leaders that demonstrated the increasingpower of its strategy and technology. To serve the increasingly complex design needs and ever-shrinking time-to-market

requirements of these application-driven designs, Cadence Design Systems

strengthened its Silicon Realization solutions in core EDA and expanded its offeringsin SoC (system-onchip) Realization and System Realization.

Cadence made great strides in 2011 to strengthen collaboration with leading fablesssemiconductor companies, foundries, and IP providers since Modern electronic designincreasingly relies on an ecosystem of partners for success.



DRIVING FORCES IN EDA INDUSTRY

The major driving forces in EDA industry are: Emerging new internet capability like Cloud computing

Changes in the semiconductor industry’s short term and long term growth

Product innovation & technological changes

Collaboration among Semiconductor Industry and EDA industry

Societal and lifestyle changes

The minor driving forces in EDA industry are: Regulatory influences and government policy changes

Changes in cost and efficiency

Marketing innovation etc.



CRITICAL SUCCESS FACTORS IN EDA INDUSTRY

AND CADENCE’S POSITION

1. Adapting to the cloud technology.

2. Effectively responding to technological changes.

3. Protection of proprietary technology like patents, trade secrets,copyrights etc.

4. Collaboration with Semiconductor industry and other EDA vendors tocreate standards.

5. Access to highly skilled workforce – R&D as well as sales.

6. Good quality customer support or after sales service.

7. Product line – Analog/Custom IC product, digital design product,

verification product etc.

SM I Assign2

Documents