This case traces the strategic decisions of Intel Corporation which defined its evolution from being a start-up developer of semiconductor memory chips in 1968 to being the industry leader of microprocessors in 1997 when it ranked amongst the top five American companies and had stock market valuation of USD 113 billion.
Intel in DRAM business:
The strategies employed by Intel for DRAM business focussed on:
1. Pushing the envelope of product design
2. Being first to market with newest devices
3. Premium pricing and skim marketing. No emphasis on mass production
Initially, Intel had a successful run in this business as they:
1. Had no immediate competition
2. The demand for memory chips was insatiated. All products had successful launch and carried premium pricing.
3. The time lag between product launch was spaced conveniently to allow for new product development.
However, the entry of Japanese companies posed a threat to the market share of Intel.
1. Product Life Cycle shortened as more companies had product launches which propelled product development at a higher frequency
2. Larger market share enjoyed by Japs translated into higher cumulative volumes, which gave them a manufacturing cost advantage.
3. Japs invested more on plant & equipment in comparison to Intel Corp.
4. Japs had technological advantage in photolithography
5. Japs were quicker to introduce new products of higher configuration
Intel and the Microprocessor and the Battle to Set a PC Standard:
In 1970, Intel got into the microprocessor business with Busicom, a Jap firm, as collaborators. During late 70s, Apple collaborated with Motorola for microprocessor purchases against Intel who had sim...
... middle of paper ...
...market share, Intel progressively reduced licensee and developed process and manufacturing infrastructure to manufacture chips by itself. Thus, it contained the “profit pool” in its value chain. Thereafter, successful tie-ups with ‘horizontal’ complementors like Compaq 7 Microsoft led to wrecking of IBM’s hegemony. With established leadership in microprocessor industry, Intel strategically started ‘Intel Inside’ and ‘Runs better on Pentium processor’ programs to improve brand recognition. As more and more end-customers identified Intel and microprocessor as the most important component in a PC, Intel could now command higher power and bargaining position with OEM and software manufacturers. This ensures demand-side control.
Thereafter, Intel ensured supply-side power by multi-sourcing of supplies.
By 1997, Intel was the custodian of the value chain of PC industry.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- PROBLEMS: The People lack DEEP KNOWLEDGE: With a gross cut in the number staff of about 200,000 as a result of noticeable decline in performance, IBM 's control continued to wane around 1990s. IBM reported its first huge loss in 1990; its income declined by 74.8% toward the end of the year. Resultantly IBM was relegated to 45th place in the Forbes records. IBM woes further deepened as a result of the promoters’ denial of the fact that their income and reputation were on the dwindling trend. Another factor responsible for the downward trend of IBM around this time is the incursion of new IT companies, Microsoft Corporation and Intel Corporation.... [tags: Corporate governance, Corporation, Management]
871 words (2.5 pages)
- Intel The Corporation "A corporation is a business that, although owned by one or more investors, legally has the rights and duties of an individual. Corporations have the right to buy, sell, and own property. Corporations may make legal contracts, hire and fire workers, set prices, and be sued, fined, and taxed. A business must obtain a charter of incorporation from a state legislature or Congress to be legally recognized as a corporation."(Watson, p211) While corporations didn't exist until the mid to late 1800s, the idea of the corporation had existed since the early 1600s.... [tags: essays papers]
1695 words (4.8 pages)
- Intel’s name is synonymous with the microprocessors powering the vast majority of the world’s personal computers, whether they run the Windows, Macintosh, or Linux operating systems. The Intel of today is no longer a single-minded chip company serving the horizontally-structured PC industry, but become have become a world-class high-tech innovator by contributing to the rapid advancement of computing and communications technologies, starting at the silicon level by extending Moore’s Law with high-K, metal-gate transistors, high-speed mobile broadband communications with WiFi and later WiMax 4G wireless networking, and delivering complete hardware and software solutions to the digital home wi... [tags: Technology, Computers]
996 words (2.8 pages)
- Hello, this is Dileep Bhargava Bharatula working as a Graduate Technical Intern at Intel Corporation. I work in Intel’s Communications Devices Group (iCDG) under Ray Deshmukh (Verification Manager) in San Diego, CA. I would like to choose my presentation to be a lecture to students in my Engineering Management Department. As part of Intel’s Communications Devices Group, I am blessed to work in an organization which gave me scope to work on both technical as well as my Management skills. I work in the Modem verification team wherein we work on the issues related to modem.... [tags: Management, Better, Goal, Team]
837 words (2.4 pages)
- ... Intel’s competitive analysis Value Chain Intel Corporation has an interesting value chain. It has numerous suppliers and even bigger number of customers. The company’s value chain is shown in the diagram below. Intel Corporation leverages its technology to stay high up in the value chain. Intel has leveraged its positioning to become the most widely-used microprocessor in the PC market. The company has a reputation of bringing the fastest and most innovative product in the market and has become the go-to processor for most computer systems available.... [tags: Microprocessor, Technology, Computers]
1650 words (4.7 pages)
- Intel Case Study Introduction In this week’s assignment we will discuss the pressures of change both internal and external and how they relate to the case study of Intel Corporation. First we will identify some of the changes at Intel over the first three years of Mr. Barrett’s tenure as CEO. Then we will look at the environmental pressures for change that were present in the case study. Then I will identify some of the internal organizational pressures for change that Intel experienced in the case study.... [tags: Intel, Barrett, Otellini]
1082 words (3.1 pages)
- Introduction Morison’s (2004) essay, “Gunfire at Sea: A Case Study in Innovation”, is a commentary on the social implications of technological change that surrounded the introduction of continuous-aim firing in both the British and American navies. Morison discusses (1) conditions that foster technological innovation, (2) reactions to the changes produced by innovation, and (3) the elements of an adaptive society. The Cogan and Burgelman (2004) case, “Intel Corporation: The DRAM Decision”, paired with the aforementioned reading, recounts Intel’s encounter with technological change and how they came to exemplify the idea of an adaptive society.... [tags: Business ]
1619 words (4.6 pages)
- The History of Intel The microprocessor has changed our lives in so many ways that it is difficult to recall how different things were before its invention. During the 1960's, computers filled many rooms. Their expensive processing power was available only to a few government labs, research universities, and large corporations. Intel was founded on July 18,1968 by engineers, Gordon Moore, Robert Noyce, Andrew Grove, and Arthur Rock. Rock became Chairman, Moore was President, Noyce was Executive Vice President in charge of product development and worked with Moore on long range planning, and Grove headed manufacturing.... [tags: Papers]
5720 words (16.3 pages)
- AMD Trying to Outdo Intel . Advanced Micro Devices (traded on NYSE under AMD), the world’s second largest producer of microprocessors, has historically lagged behind the giant Intel, which commands about four-fifths of the international microchip market. After two decades of being the best-grounded and sure-footed company in Silicon Valley, Intel is having serious financial and strategic trouble. The company has called off a succession of high-profile projects, replaced its top management in money-losing ventures and is behind AMD in introducing new demanded technology including anti-virus and worm-fighting products.... [tags: Advanced Micro Devices Intel Technology Essays]
1151 words (3.3 pages)
- Introduction This analysis of Intel Corporation is to educate the investor about the company and provide them with useful information that will enable them to make a decision as to whether they should invest in the company. Intel primarily manufactures semiconductors or integrated circuits containing silicon that are used in computers as computer chips. The purpose of this paper is to provide the investor with facts regarding the company profile, global presence, environmental policies, competitors, and stock performance.... [tags: essays research papers]
1905 words (5.4 pages)