Capital Budgeting and Applied Technologies

Capital Budgeting and Applied Technologies a. Applied Materials' mission statement is to be closer to their customers, strengthen their product performance, and manage rapid financial changes. In addition, the company envisions maintaining their long-term initiatives in order to make optimal use of future opportunities.

The company cites a number of trends as potential catalysis for stronger growth in the superconductor industry. With the projected recovery of the economy, the proliferation of silicon is one of these trends. The semiconductor industry is projected to continue growing as silicon is increasingly used in consumer and business electronic devices. Chip-powered applications are also expanding with time, which also provides future opportunities for Applied Materials. Concomitantly, e-business applications are also increasing, as increasing numbers of citizens worldwide connect to the Internet from work and home. Indeed, the continual drop of Internet access prices means that a billion more people are expected to join the Internet community within the next five years. Technological development also means that these connections can occur with multiple devices, including PCs and cell phones.

In the marketplace, an increasing customer base means that online technology provides companies with global reach, greater efficiency, quicker response times and better customer service. This makes it a desirable implementation in the increasingly competitive global marketplace.

c. In the light of the above, companies such as Applied Materials are favorably positioned to make use of future opportunities. The desirability of online technology however also means that there is a great number of companies that compete on a global scale. It is therefore imperative that a competitive company enter the global marketplace and establish leadership on this scale. Applied Materials defines its global leadership according to a number of key values. The first of these is to build a culture of achievement in concomitance with customer relations, excellent performance, and mutual trust and respect among management and employees. As such, the company aims to attract the highest quality of employees on a worldwide scale, to whom a global knowledge base would be made available for collaboration and effective decision-making.

With a strong customer and employee basis, the company envisions taking early leadership of the global market. This is also to be based upon management excellence on a local scale. The management team is envisioned to be capable of translating vision into performance on both a local and global scale, while also investing strategically to maximize profitability and performance.

d. In terms of Research and Development, Applied Materials has increased its investments despite economic downturns. The purpose of this was to increase its potential future profitability by providing advanced manufacturing systems for its customers worldwide. This proved to be a good strategy, as the company had build a broad product line that catered for nearly every chip manufacturing stage. In order to reach the next step; integrating systems to perform a specific process sequence, a new facility was needed, and 1997 saw the beginning of construction on the Equipment and Process Integration Center (EPIC).