Businessmodel of Broadcom

Customer Segments

Broadcom provides a broad range of semiconductor products and related to services to commercial and institutional clients around the world. The Company’s organises its operations into segments that relate to its principal target markets:

• Wired Infrastructure, comprising various computer hardware companies, software companies, telecommunications companies, and internet service providers;
• Wireless Communications, comprising telecommunications companies, mobile service providers, internet service providers, and other commercial entities;
• Enterprise Storage, comprising a range of commercial and industrial entities from a range of sectors, including technology, financial services, and commerce; and
• Industrial and Other, comprising various industrial businesses, including manufacturers of electronics, automotive companies, industrial machinery companies, and aerospace companies. Broadcom provides services to a range of well-known businesses, including HTC, Dolby Laboratories, Oracle, Toshiba, Comcast, Fujitsu, Discovery Communications, and Time Warner.

Broadcom’s native US remains its principal geographic market. The Company, however, also serves clients across Europe and Asia Pacific.

Value Propositions

Broadcom provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as a reliable and efficient provider of semiconductor products, controlling a substantial portion of the Ethernet semiconductor vendor market, and having a track record for providing effective solutions;
• Its broad portfolio of products, with the Company offering a broad range of products, spanning a wide array of uses across multiple industries, including the technology, telecommunications, internet services, and industrial sectors;
• Its international reach, with the Company serving an extensive network of domestic clients, as well as an international client base across Europe and Asia Pacific; and
• Its specialist personnel and technical expertise, with the Company employing highly-trained technical staff across its four operating segments, led by a team of experienced industry executives. ### Channels

Broadcom operates a website at www.broadcom.com, through which it provides information on its various products, services, and locations. We sell our products primarily through our direct sales force, distributors and manufacturers’ representatives. The Company does not operate an online sales channel; it does, however, provide a range of downloadable resources for its customers through its website.

Broadcom sells its products primarily through an in-house direct sales force, which is organised by operating segment and geographic region. The Company operates a network of more than 80 dedicated sales offices across North America, Asia Pacific, Europe, and Latin America, including sales locations in Copenhagen, Cambridge, Taipei, Singapore, Shanghai, and Houston.

Broadcom also makes sales and distributes products through a number of third party distributors and manufacturers’ representatives, which support and extend the Company’s own in-house sale force, particularly in jurisdictions where it is not itself well-represented.

Customer Relationships

Broadcom does not provide products or services to its customers on a self-service basis. It does, however, offer a range of downloadable resources which can be accessed by customers independently.

Broadcom makes its sales through its direct sales force, the members of which consult directly with customers to ensure that their individual needs are met. The Company provides ongoing support services to its customers, with a view to establishing long-term relationships and securing recurring business.

Broadcom provides a range of support resources on its website, including user guides and product information. It also operates a customer support portal, where customers are able to find answers to common questions and fixes for common problems, interact with support representatives, and interact with one another. Customers can alternatively call the relevant offices or department to speak with support staff in person, or submit a request for product information and provide feedback through online contact forms.

Customers can additionally interact with Broadcom through its social media accounts, including with Facebook, Twitter, YouTube, Google+, and LinkedIn.

Key Activities

Broadcom is a semiconductor company. It offers an extensive range of products across its four operating segments, namely Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial and Others.

The Company’s products support and facilitate various functions and applications, including data centre networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data centre servers and storage, factory automation, power generation, and alternative energy systems, and displays.

The Company’s product categories include broadband access and modems, enterprise and network processors, ethernet communication and switching, set-top box and media processors, wireless infrastructure and wireless connectivity.

Key Partners

Broadcom works closely with a network of partner companies and organisations in order to ensure it is able to provide products and services efficiently and effectively. These partners can be categorised broadly as follows:

• Supplier and Vendor Partners, comprising suppliers of raw materials, tools, equipment, and services that are utilised across the Company operating segments, as well as companies to which certain non-technical functions can be outsourced;
• Channel and Distribution Partners, comprising a range of distributors, independent sales agents, value-added resellers, and module manufacturers that support and extend the Company’s in-house sales and marketing capabilities;
• Technology Partners, comprising a range of technology, hardware, and software companies that support the Company’s IT infrastructure and collaborate with the Company on certain product integrations; and
• Joint Venture Partners, comprising other semiconductor and related companies, with which the Company collaborates on projects and operations through mutually-owned entities. Broadcom has launched a number of partnerships in recent years. This includes a deal with Hewlett Packard, VMware, and Intel as part of the OpenSwitch Community, a vendor tie-up with LM Technologies, and a joint development program with Cisco Systems.

Key Resources

Broadcom’s key resources are its technologies and intellectual properties, its material and supply chain, its portfolio of products, its IT and communications infrastructure, its sales and distribution channels, its partnerships, and its personnel.

Broadcom relies in large part on its technologies and intellectual properties, which it protects through various trademark, patent, and licensing procedures. Searches of records published by the US Patent and Trademark Office identified a number of patent applications filed in Broadcom’s name, including applications entitled ‘Television system and method for providing computer network-based video’, ‘Physical layer (PHY) link signaling for cable networks’ and ‘Recovering data in a near field communication apparatus’.

Broadcom also owns and or leases a number of physical properties across North America, Asia Pacific, Latin America, and Europe, including numerous sales and administrative offices, distribution centres, and manufacturing facilities.

Cost Structure

Broadcom incurs costs in relation to the development of its products and technologies, the procurement of supplies and materials, the operation of its production facilities, the purchase of professional services, the maintenance of its IT and communications infrastructure, the operation of its sales and distribution channels, the management of its partnerships, and the retention of its personnel.

In the fiscal quarter ended 31st June 2016 Broadcom accrued total operating expenses in the amount of $2.05 billion, including research and development costs totalling $814 million, and selling, general and administrative costs totalling $230 million.

Revenue Streams

Broadcom generates revenue through the production and sale of various products related to semiconductors and the provision of associated services, such as wired infrastructure services and connectivity support services.

In the fiscal quarter ended 31st June 2016 generated revenue of $3.79 billion, up on the $1.74 billion recorded by the Company for the quarter ended 2nd August 2015, prior to the merger of Broadcom Corp and Avago Technologies. More than half of the Company’s revenue for the quarter was generated by the Company’s Wired Infrastructure segment, which generated $2.06 billion.

The bulk of the Company’s remaining quarterly revenue was derived from the Company’s Wireless Communications segment which generated $1.01 billion.