Switching overseas sales to a direct model (1994)

Transplanting the pattern that won at home onto the world

The crux of this decision was not overseas expansion as such but transplanting, intact, the winning pattern built at home. Station engineers beside the most advanced fabs and, from maintenance, read the next wave of demand and feed it back into the equipment — this circuit, which had underpinned TEL’s edge at home, could not be reproduced abroad with an agent in the middle. To recreate it worldwide meant rebuilding the very machinery of selling into a direct model, wired straight to the user. The Austin clean rooms and the appointment of local nationals at the top both make sense on this single point: to pick up the customer’s live voice by the shortest path.

Also worth noting is the timing. The years around the 1994 switch were a semiconductor slump of falling sales and profits, and rebuilding an overseas sales network from scratch while earnings were painful must have been a heavy load. But that up-front investment coincided with a changing of the guard among the leaders of the chip industry and led, in six years, to a structural break from domestic dependence. Change the machinery at the bottom of the cycle and reap when the next wave comes — the base on which Tokyo Electron climbed to become a global company can be seen in this switch of its sales system.