Arm article

The business I decided to base my article on is Arm.
So jumping strait in, we need to calculate the market value of Arm. To do this we find how much a share of the business is and how many share holders there are in the business. At the moment according to Times Online (TNL, 2009), one share of Arm is worth £1.08 and there are 1260.12 million company shares at the moment. So that makes Arm's market value to be £1.36 billion.
Looking at this you can see that that Arm as a business is doing very well and is still going strong over the recession. So how are they doing so well while other businesses are suffering?
This must be something to do with the business model arm uses.

Looking at the business model, you can see from the Arm Investor Relations Factsheet (Arm, 2009), that Arm is a big intellectual property (IP) so rather than designing, making, manufacturing and selling the final product for a third party, they will just do the designing. They then license the design and give it to a third party company so they can make and manufacture and finely sell the product of which Arm will charge royalty.
So from this, Arm has high coordination integration but low ownership integration. But the problem of having a high coordination integration and low ownership integration of which I can see is that Arm is relying on third party companies to do business so Arm will need to have a good third party business network so that they will have a constant pipeline of work (companies needing new designs and companies using designs).
As you can see from the Arm Investor Relations Factsheet (Arm, 2009), Arm has a very big network of third party companies wanting new designs and companies still using the older designs. These businesses are also involved with mobile phones which do not get affected as much by the economic down tern.
Looking at this, this is what makes Arm as an IP company really strong and successful. It’s a bit like the saying, it’s not what you know but who you know, but in the case of Arm they have the knowledge as well which helps a lot.

Looking at the corporate structure of Arm, you have at the top Warren East who is the CEO and his wage is £395,000.00 per year (LLC, 2009). At the middle, a Product Manager is earning £50,000-£60,000 per year (Ltd, Arm, Project Manager, 2009) and at the bottom customer services which is at £25,000-£32,000 per year (Ltd, Arm, Net Weaver Portals Analyst/Developer , 2009).
You can see that there is a massive difference between the CEO and a project manager but still a big difference between the product manager and customer services. Taking in to account about the market value of arm and what the business model is all about, this makes sense because from personal experience of owning my own business, there is a lot of risk and it is a very demanding job, especially while things are a little tight at the moment, so being a CEO of a business and you would expect a big wage for that very heavy responsibility even though you could buy a house with one of his year’s salary.
Arm is all about intellectual property so the company has to look after the people that give the company that and as for the customer services, I would of thought Arm are not concerned as much on customer services as their wages suggest, and as the customers are the third party companies and of which they should have a direct line within the company anyway.

Works Cited

Arm. (2009). Invester Relations Factsheet. Retrieved March 27, 2009, from http://media.corporate-ir.net/media_files/irol/19/197211/Factsheet_April2008.pdf

LLC, F. (2009). Warren East. Retrieved March 29, 2009, from Forbes.com: http://people.forbes.com/profile/warren-east/7332

Ltd, M. J. (2009). Arm, Net Weaver Portals Analyst/Developer . Retrieved April 1, 2009, from my cambridgeshire jobs: http://www.mycambridgeshirejobs.co.uk/Jobsite/Jobs/1209007/Net-Weaver-Portals-Analyst-Developer-Jobs-In-Cambridge

Ltd, M. J. (2009). Arm, Project Manager. Retrieved April 1, 2009, from my cambridgeshire jobs: http://www.mycambridgeshirejobs.co.uk/Jobsite/Jobs/1208990/CPU-Product-Manager-Jobs-In-Cambridge

TNL. (2009). ARM Holdings PLC. Retrieved April 1, 2009, from Times Online: http://timesonline.hemscott.com/timesonline/timesonline.jsp?page=company-summary&companyId=3606