Competitive Advantage Case Study: Intel Corporation

Introduction

Intel Corporation is the world’s largest semiconductor chipmaker. Founded in 1968 by Gordon Moore, Robert Noyce, Arthur Rock, and Max Palevsky, the company makes integrated circuits, flash memory, embedded processors, motherboard chipsets, and other communications- and computing-related devices. Due to increased competition from Japanese semiconductor manufacturers in the early 80’s, Intel decided to focus on microprocessors.

Intel experienced tremendous growth by the late 80’s, when Intel became the primary supplier of microprocessors for IBM and then the PC industry. In addition to its excellent positioning, Intel launched its “Intel Inside” marketing campaign that increased brand loyalty. Consequently, the campaign, together with Intel’s positioning, made Intel’s Pentium processors a household name.

In the early 2000’s, AMD entered the market. AMD initially captured market share in the low- to mid-range processors, but also gained market share across product lines. As a result, Intel’s market share was reduced. Competition pushed Intel to expand beyond semiconductors, but few became successful.

Intel is not a stranger to litigations. The company was involved in antitrust allegations filed by AMD in the early 90’s. In 2004 and 2005, AMD filed additional claims against Intel for unfair competition. The lawsuit negatively affected Intel causing loss in profit and 10% workforce layoffs.

In order to regain the lost market share, Intel collaborated with Apple for Apple’s microprocessor needs. By 2006, Apple transitioned to ship its line of Macs and Mac Pro with Intel processors. In 2007, Intel unveiled its Core microprocessors. The product line was, not only a tremendous improvement to processor performance, but is also...

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...fically AMD.

Government protection

Intel has filed thousands of patents to protect its technology. In fact, Intel owns 6,285 patents granted from 2008 to 2012 by the US Patent and Trademark Office. On the other hand, because of its early dominance in the industry, Intel has faced antitrust and unfair competition allegations from AMD, DEC, the FTC, etc.

Conclusion

Even though Intel is in an industry where competition coming from one other processor-maker, it has continued to leverage its competitive advantages, mainly its forward-facing innovative team in its management and R&D, to stay ahead of the competition. Intel is not only battling competition, but also technology. Processors can only become smaller as technology allows it. Intel is working hard, investing more in R&D, and continuing its marketing efforts in order to stay relevant and avoid becoming obsolete.