LipBu Tan

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Successful Globalization

• Lip-Bu Tan
• President and Chief Executive Officer,Cadence
  Design Systems, Inc.
• Chairman, Walden International

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What does globalization mean?
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Walden International
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Globalization pattern

• But what does globalization mean?
• to an industry
• to an established company
• to a startup

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Globalization of an industryExample Electronics
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Example electronics industry
Disaggregated
YESTERDAY
Cost
IntegratedDeviceManufacturer(IDM)
Innovation
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Example electronics industry
Virtual re-aggregation on global basis
Cost
Time toMarket
MoreFeatures
Innovation
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Lesson from the globalized electronics industry
IP
SYSTEM
Cost optimization is a consequence of successful
globalization,not the only motive
IC PKG
EMS
SEMI
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Globalization of large companyExample Cadence
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Cadence Design SystemsSoftware and hardware for
developing electronic products

• Major development andsupport sites worldwide
• San Jose, CA
• Austin, TX
• Cary, NC
• Chelmsford, MA
• Yokohama, Japan
• Bracknell, England
• Munich, Germany
• Paris, France
• Moscow, Russia
• Noida, India
• Bangalore, India
• Hsin Chu, Taiwan
• Herzelia, Israel
• Beijing, China
• Shanghai, China

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Successful globalization takes time
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Successful globalization takes timeand
persistence
Successful globalization is being local
worldwide
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Lessons learned from Cadence

• Expand business volume by going global
• Integrate with local supply chain via
  partnerships around the world
• Control costs through careful outsourcing
• Many companies find this elusive
• Use global talent pool to meet need for skills
  and knowledge

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Globalization of a startupExample Ambarella
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Ambarella

• Venture-backed fabless semiconductor company
• Emerging leader for digital media products
• Founded in Silicon Valley in 2004 now
  profitable
• About 230 employees worldwide
• Headquarters in Silicon Valley architecture,
  VLSI, microcode
• 2/3 of employees are in Asia, close to customers
  and manufacturing systems, software, operations,
  sales
• Core advantages
• Technology leadership
• Rapid SoC execution for rapidly-evolving market
• Market focus on volume-oriented global technology

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Lessons learned from Ambarella

• Define core competitive advantages
• Innovative IP and design
• Rapid customer support
• Low-cost manufacturing
• Locate operations according to regional strengths
  with respect to your business
• Design and IP (creativity)
• Manufacturing
• Support
• Develop recruiting and staffing plan for key
  regions
• Establish your company culture at each key
  location
• Network to identify and attract crucial talent
• Determine optimum scale for each location and
  plan for replication

Business strategy drives globalization strategy
globalization strategy does not drive business
strategy
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Best practices

• Business strategy drives globalization strategy
  globalization strategy does not drive business
  strategy
• Successful globalization is being local
  worldwide
• Cost optimization is a consequence of successful
  globalization, not the only motive

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The future of globalization

• Globalization will accelerate as economies become
  further interdependent
• Transformational factors in motion
• Emergence of new economic powerhouses (BRIC)
• World Wide Web erasing organizational boundaries
• Trade barriers lowering around the globe
• Advanced technology integrated deeper into
  operations
• Opportunities for innovation in business
  processes, models, and systems

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The future of globalization

• Globalization will accelerate as economies become
  further interdependent
• Transformational factors in motion
• Emergence of new economic powerhouses (BRIC)
• World Wide Web erasing organizational boundaries
• Trade barriers lowering around the globe
• Advanced technology integrated deeper into
  operations
• Opportunities for innovation in business
  processes, models, and systems

Future is not just aglobalized company its
the Globally Integrated Enterprise
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