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In this natural disaster risk assessment and impact analysis that was conducted on MaxLinear Inc, some key findings will help the company to minimalize effects from any natural disaster that may happen in their location. MaxLinear having headquarters in southern California is prone to a lot of major natural disasters; some of those include earthquakes, wildfires, specifically floods and storms. In the past 60 years, California has been declared under a state of emergency more than 309 times, and 40% of those events were due to floods. The natural disaster that would have the most impact on MaxLinear Inc. would be flooding, and this is due to its location.
Based on all the analyses conducted, I made four recommendations on how the company could mitigate and minimalize any risks and impacts that could come from floods. The company should be prepared in case of any future flood, and they should be ready to evacuate accordingly with any government regulations. This way they can prevent any asset loses, as well as keeping their employees safe. They need to ensure that they are prepared, have emergency kits ready, and have a protocol set in case of evacuations.
Summary of Business Model
MaxLinear Inc is an American company located in Carlsbad, California and they were founded in 2003. They are an American hardware company that primarily focuses on providing integrated radio-frequency (RF) and mixed-signal semiconductor receivers, which are used to receive and translate analog or digital radio, television, and broadband signals into images. They generate revenue by providing in-home connectivity, cable broadband, and satellite & terrestrial. Based on past finances, MaxLinear has been able to increase its sales volume by more than half since 2010, in 2010 their sales volume was $10,400,000 and in 2018 their sales volume was $420,320,000 (see Appendix A for a complete business model canvas).
I as well conducted a Business Model Canvas to define and communicate what MaxLinear’s business ideas and concepts are. All of the information below was found on MaxLinear, Mergent Intellect, and Business Insights. All the business model canvas sections are explained in depth below (see Appendix Business Model Canvas for a complete canvas).
I was able to find information on journals, databases, and the MaxLinear website regarding their key partners. Key partners include the government-industry, manufacturing facilities, and technology companies. Some of the companies that they are partners with include, Intel, ZTE cable, and SWR Technology. They partner with companies in the United States, as well as globally.
MaxLinear does not have a lot of key activities, this is because they only produce and manufacture the equipment. Their focus is primarily in the semiconductor industry, due to this their customer relationships are between agencies and other businesses. Based on these two activities is where MaxLinear receives its revenue streams.
There are some key resources that MaxLinear depends on for its revenue flow, partnerships, and distributions. This includes brand partnerships and collaborations with companies in the technology industry. As well as semiconductor and related products manufacturing, which is where their main stream of revenue comes from.
The way that MaxLinear delivers value to its customers is not one like traditional business to consumer transactions. The value that MaxLinear gives is to companies, and then those companies give other values to their clients and customers. They do offer products and services to a majority of government and technology companies; but it is primarily towards telephone operators, cable operators, satellite and terrestrial operators, and power management.
As I said above MaxLinears customer base is not traditional consumers, but businesses and governments. Based on that they gather information on what those customers’ needs are and how they can fulfill that need. With government agencies; they look out for auctions that they might have and they plan for a bid. If they win the offer they customize the products and services for that specific business or industry needs.
Since MaxLinear does not operate the direct business-to-consumer route, they reach their customers through other channels that are specific to the products they sell. They focus on business-to-business, business-to-government, and businesses that are paid through bids. This means that they sell directly to technology companies, government agencies, and agencies that are in the semiconductor industry.
They create value for different industries within technology and government agencies. Based on the research and data that was collected for this analysis I found that their most important customers. These include investors, the aerospace and defense industry, communication equipment, and computer hardware & networks.
To find their cost structure I used databases and Yahoo Finance to determine their most important costs, what key resources and key activities are the most expensive. Based on that I found that they spend the most on the cost of goods sold, operating expenses, investments, research & development, financing, interests, and taxes. All these costs are reasonable according to the industry that MaxLinear is in.
The revenue streams for MaxLinear are based on their customer base and their customer channels. Because of these, they receive their revenue streams from bids that they win, business-to-business transactions, and business-to-government transactions. Through these channels, they determine who much their customers are willing to pay for the value they are offering, how much they prefer to pay, and how much does each customer revenue stream contributes to the overall revenues of the business.
MaxLinear is located about 35 miles from San Diego, CA which means that they are prone to a lot of major natural disasters. Some of the natural disasters that California is more prone to are earthquakes, wildfires, landslides, flooding, and droughts. The natural disasters that are most prone to have a major impact on the company are earthquakes, wildfires, and floods & storms. Earthquakes' risks have been increasing for the past years in the state of California, specifically the Los Angeles and San Diego area (see Appendix B). According to the Legislative Analyst's Office of California, most of the states' largest and most destructive fires have taken place within the past 29 years, and this is increase is due to the poor health of the state’s forests (see Appendix C). The authors discuss the major types of disasters in the state of California and find that even though earthquakes and wildfires are the most dangerous, floods and storms make up the majority of natural disasters in California. Between 1950-2017 the governor of California declared 309 states of emergencies and 40% of those were related to floods, as stated in the article Main types of disasters and associated trends (See appendix D). The south coast region, which includes San Diego, has the largest exposure to flood risks; as stated in the article Managing Floods in California. In this area about 3 million people and structures valued at $230 billion or more are located within the 500-year floodplain; this means that based on the whole state of California the south coast region would be the most affected (See Appendix E).
Based on the risk analysis; the natural disaster that would have the most impact in the San Diego area, which is where MaxLinear has its headquarters, would be flooding. This is because the south coast region of California is the area with the greatest exposure to flood, based on the map about 3.14 million people could be affected by this natural disaster. The most recent major flood for the state of California happened in July and according to AccuWeather, the flood levels were about 45 feet which are nearly 14 feet above the flood stage. Additionally, AccuWeather reported that more than 2,000 homes and businesses were affected by the flood. The North Bay Business Journal published an article explaining the economic impact on businesses that the Russian river flood caused, according to that about 578 business suffered a total of $35 million in damages.
According to data on past floods, I would estimate that a major flood in the San Diego area would impact MaxLinear’s operations for about 5 days. A minor flood would impact operations for 2-4 days. The company would not necessarily be the one affected, but its employees would be since they would not be able to drive or transport themselves to work. Without its employees, MaxLinear would not be able to function its daily business routines.
Recommendations for Business Continuity
Based on the risk and impact analysis, I will be recommending four action plans that MaxLinear should be following to try and mitigate the risks of floods in the San Diego area. The first recommendation is to be aware of the natural distracters that they are most prone to. According to the California Department of Water Resources, the first step to being prepared in case of a major flood is to be aware of the situation, if your location is in a flood area, and to listen to local news and weather reports. By being aware of your surroundings you could take action early and lower the casualties for the business.
The second recommendation is to have emergency supply kits throughout the premises, as well as providing kits to all employees. The Federal Alliance for Safe Homes provides a great checklist on what to have in your emergency kits; some of the most important things to have in an emergency kit are cash, first aid kit, radio, food, flashlights, and batteries.
My third suggestion is to learn and practice evacuation routes, Ready by The Department of Homeland Security provides an excellent guideline on how to do this properly; they offer a checklist on what to do before, during, and after an evacuation. The most important points that the article highlights are to plan how and where you will go if asked to evacuate, develop a household reunification plan, and assembling supplies that are ready to go.
The fourth and last suggestion that I have is to get flood insurance. By doing this MaxLinear could reduce the damages in case of a major flood. FEMA provides all the information that you might need to learn how flood insurance works, how to buy flood insurance, how companies assign coverage and all the flood insurance forms that you might need.
- Byrne, K., & Mitchell, C. (2019, July 1). Thousands of homes, businesses flooded as water levels on Russian River in California begin to recede. Retrieved November 22, 2019, from https://www.accuweather.com/en/weather-news/thousands-of-homes-businesses-flooded-as-water-levels-on-russian-river-in-california-begin-to-recede/70007561.
- Brashares, J., & O'Keefe Fos, K. (2011). Disasters in California History. Retrieved November 15, 2019, from https://calisphere.org/exhibitions/82/disasters-california-history/.
- California, S. of. (2018, October 24). Flood Preparedness Week 2019: October 19-26. Retrieved December 1, 2019, from https://water.ca.gov/What-We-Do/Flood-Preparedness/Flood-Preparedness-Week.
- Evacuation. (n.d.). Retrieved December 1, 2019, from https://www.ready.gov/evacuation.
- Floods: Assembling a Disaster Kit. (n.d.). Retrieved December 1, 2019, from https://www.flash.org/peril_inside.php?id=39.
- Home. (n.d.). Retrieved November 15, 2019, from https://www.maxlinear.com/.
- Main Types of Disasters and Associated Trends. (2019, January 10). Retrieved November 15, 2019, from https://lao.ca.gov/Publications/Report/3918.
- Managing Flood in California. Retrieved November 21, 2019, from https://lao.ca.gov/reports/2017/3571/managing-floods-032217.pdf
- MaxLinear Inc. (2018). Business Insights: Essentials . Retrieved from https://bi.gale.com/essentials/company/1389715?u=orla57816
- MAXLINEAR, INC. . (2018). Mergent Intellect . Retrieved from https://www-mergentintellect-com.ezproxy.net.ucf.edu/index.php/search/companyDetails/178765702
- MaxLinear, Inc. (MXL) Income Statement. (2019, December 1). Retrieved December 2, 2019, from https://finance.yahoo.com/quote/MXL/financials?p=MXL.
- San Diego, CA Natural Disasters and Weather Extremes. (n.d.). Retrieved November 15, 2019, from http://www.usa.com/san-diego-ca-natural-disasters-extremes.htm.
- The National Flood Insurance Program. (n.d.). Retrieved December 1, 2019, from https://www.fema.gov/national-flood-insurance-program.
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