Intel's Strategy for the 1990s

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Case II-13: Intel Corporation – Strategy for the 1990s Is Intel still a technology leader? How well do the three corporate macro strategies outlined in the case serve to guide Intel through the 1990s? INTEL'S STRATEGY Intel's strategy in 1990 is to be the architectural leader in microprocessors, a proprietary, high profit margin business. This implies an emphasis on design skills and the ability to implement design architectures. They also want to continue as the leader in transistor density. This implies the continued importance of process technology skills associated with "line width reduction". Intel wants to be a world class manufacturer. This is particularly important because their corporate strategy is to be the sole source supplier of microprocessors to OEM PC makers. Customers will be locked into one supplier, so it is essential their manufacturing capacity and capability support this strategy. RATIONALIZING TECHOLOGY STRATEGY WITH CHANGING INDUSTRY DYNAMICS There are three key Intel managers discussed in the case. While each appears to represent a significantly different viewpoint, a more detailed analysis uncovers common threads in their logic and an evolution in the strategic position of the company. Chou argues that Intel does not need to have a high volume product to continue learning and remain a technological leader. He argues that learning is "time and engineering constricted, not number of wafers constrained". In his view, enhanced learning techniques can take the place of "brute force" techniques of volume production. Chou's position contradicts the traditional learning model in which cost reduction is related to cumulative volume. This was the learning model used at Intel prior to its exit ... ... middle of paper ... ... Is Intel's strategy for these products sound? Is it consistent? (example: Intel exited the DRAM business when it changed to a commodity business. What is different now that makes EPROM, a commodity product, attractive? • Since they appear to be the current strategy, what is the nature of EPROM and FLASH from a business perspective? How well do they fit Intel's strategy Final thoughts – notice that I kept the discussion a non-technical as possible, focusing instead on business and strategic issues. I also provided a minimum of financial information and only when it supports my discussion. I've tried to think each major issue through, making logical connections between different facts as well as making some logical assumptions. Using this example in conjunction with the guidelines I've already provided should equip you to do well on the case study assignments.

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