Harvard University Marketing Strategies at LSI Logic Company Case Word Limit 2400 to 3000 words (max 5 pages), MLA format. Have to write up an individual c

Harvard University Marketing Strategies at LSI Logic Company Case Word Limit 2400 to 3000 words (max 5 pages), MLA format.
Have to write up an individual case by reading the assigned material (3 pages) and answering the questions at the end of the assigned reading. This paper will be be scanned for every form of plagiarism through turnitin and 4 other plagiarism checkers.

The following questions have to answered:
1- What were the different ways LSI Logic used international capital markets? Discuss specifically the nature of the instruments (i.e. local, foreign, Euro etc)
2- Why did it use those markets rather than just the U.S market?
3-How did its organizational strategy fit with its capital-acquisition strategy?

Kindly include a background of the company (if possible). This for an International Financial management class.

I will add more details in a few days (if needed). If you need more reading material then kindly let me know. This is due on 2nd Nov 2019. Map
5. Triad Stra!egy
Si Logic’s global business and financing strategy included the three major markets in Me world: Asia
specifically Japan). North America, and Europe.
worry about all of the listing regulations of the
Securities and Exchange Commission in the
United States, it was able to get the offering to-
yether faster and out to the investing public.
Although significant amounts of funds were
raised in foreign markets (over $200 million
since 1982), there was no real exchange risk.
LSI Logic operations worldwide were carning
revenues that could be used to pay off the finan-
cial obligations. In addition, LSI Logic subsidiar-
les had access to local credit markets because
they were organized as local corporations rather
than branches of a foreign corporation.
Second European Thrust Now that busi-
ness in Japan was under way, Corrigan turned
his attentions again to Europe. He was planning
to set up a new European company and he
needed to decide on its structure. The company
could be set up as a branch of the U.S. parent
that would use U.S. capital and be totally con-
trolled and protected by the parent, or it could
be set up as a European company. Corrigan de-
cided to do the latter, so he used Morgan Stanley
E Co.. the large I.S.-based securities firm, to ser
up LSI Logic Lid. The parent company retained
an 82 percent stake in the new company, and
the rest was sold to European investors in a pri-
vate offering. One of the investors was the ven-
Questions
ture-capital arm of five West German banks.
1. What were the different ways that LSI Logic
Corrigan was convinced that by setting up a Eu-
used international capital markets? Discuss
ropean company, he was able to get more
specifically the nature of the instruments (i.c..
money by selling shares at a higher price than
would have been possible otherwise and that
local, foreign, Euro, etc.).
LSI Logic Lid. was better placed to service Euro-
2. Why did it use those markets rather than just
the U.S. market?
pcan customers than a branch of the parent
company would have been.
3. How did its organizational strategy fit with its
capital-acquisition strategy?
Convertible Bonds in 1985 and again in
1987. Corrigan returned to European capital
markets, but this time LSI floated a band issue.
The first issue of $23 million was put together by
Swiss Bank Corp., one of the largest banks in
the world. The second issue, a bond issue with
securities convertible into common stock, was
floated by Morgan Stanley and Prudential-Bache
Capital Funding. There were two main attrac-
tions to the Eurobond market for LSI Logic: a
decent price (lower interest rates than would
have been offered in the United States), and a
quicker time frame. Since LSI didn’t have to
International Business, Environments and Operations
John D. Daniels & Lee H Radebaugh (6th Edn).
CASE
LSI LOGIC CORP.
In the late 1970s. Wilfred Corrigan, the British
born chairman and president of Fairchild Cam-
era & Instrument Corp.. sold Fairchild to
Schlumberger Lid. Approximately one year later.
in November 1980. he started LSI Logic Corp., a
inanufacturer of custom-made microchips based
in Malpilas, California. Although Mr. Corrigan’s
idea of custom-made microchips sounded un-
conventional at the time, he was able to use his
record at Fairchild to convince some U.S. ven-
jure capitalists in January 1981 to invest nearly
$7 million in the new firm.
The company had only four employees at this
point, but since Comigan had solved two key is-
sues the nature of the product and the initial
infusion of cash-there was a solid foundation
for growth. Corrigan now had to decide how LSI
Logic should service its customers worldwide.
and how and where it would raise capital to
keep expanding.
a share, compared with only $0.90 per share
when it was set up only a year earlier.
At this point LSI Logic was growing rapidly.
In May 1983 Corrigan took the firm public in
the United States and raised over $162 million.
an average now of 521 a share. That was a signif-
icant improvement over its European experience
and demonstrated the size of the appetite in the
United States for new high-tech companies.
Global Strategy Mr. Corrigan learned from
his experience at Fairchild that a producer of mi.
sochips had to think globally in terms of the lo-
ution of production and the consumer. He
quickly decided that in order to be successful, he
needed to concentrate on being in three key
cographic areas—Japan, the United States, and
hurope (illustrated in Map ). He called this
his “global triad strategy.” The key organiza-
tional strategy was to establish firms incorpo-
rated in the producing and consuming countries
that would be jointly owned by LSI Logic and
wwal investors. However. LSI Logic would hold a
ntrolling interest in the firm. Although the op-
urations in each country would be relatively in-
dependent of each other, they would still be
inked by technology, money, and management.
This would allow the synergy of interdepen-
dence to take place, but it would also permit lo-
cal freedom in meeting the demands of the
The Japanese Strategy in spite of the suc.
cess in Europe and in the United Stat Corri-
gan still had not been able to complete the third
part of his triad-Japan. However, Corrigan
learned that Nomura Securities, the largest bro-
kerage house in Japan (and subsequently the
world), had purchased large blocks of LSI stock
tor its ciients in Japan. Encouraged by this iníc:-
mation. Corrigan traveled to Japan to meet with
Nomura officials and try to decide what LSI Log-
ic’s next move should be. As a result of the visit
and discussions. Corrigan decided that the time
was right for starting operations in Japan. Fol-
lowing the strategy he had used elsewhere. Cor-
rigan established a Japanese subsidiary of LSI
Logic (called LSI Logic Corp. K.K.) in which the
parent company owned 70 percent, and 25 local
Japanese investors owned 30 percent. The inves-
tors were not small operations, however. Nippon
Life Insurance Company, the third-largest insur-
ance company in the world. just behind Pruden-
tial and Metropolitan Life, became a major
shareholder in the new venture. The new invest-
ment was just right for LSI Logic. Not only did
Corrigan now have access to the Japanese con-
sumer market, but he also had access to the Jap-
anese capital market. As a Japanese company.
LSI Logic Corp. K.K. and its manufacturing affil-
iate, Nihon Semiconductor Inc., could now es-
tablish lines of credit with Japanese banks. In
order to help LSI Logic penetrate the capital
markets better and to develop more of a local
image in Japan. Corrigan hired Keiske Awata, a
senior executive of NEC Corp, who was working
outside of Japan at the time. Mr. Awata gave a
Japanese image to LSI Logic in Japan and
helped open the right doors to the financial
world. LSI Logic was able to get a local line of
credit at only 6 percent, compared with 9 per-
cent in the United States at the time.
market.
Initial European Thrust Once Corrigan
801 eperations under way, he began to look for
more cash. The key was to find the right
amount, at the right price, with the least number
of problems. In February 1982, slightly more
than a year after U.S. venture capital gave the
company a start, LSI Logic turned to Europe in
Search of venture capital. It was found in a Eu-
topean investing community hungry for U.S.
high-tech stock, so it was able to raise $10 mil-
lion, mostly–but not exclusively–in Britain
That offering brought LSI Logic an average of 57

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