Inspired Innovation… That's Changing the World.

Case Study 1: Intel Corporation 1968-1997

Present Asst.Prof. Viput Ongsakul

National Institute of Development Administration

(Flexible MBA 1/2557)

Microeconomics of Competitiveness

Founded in 1968 By

- Robert Noyce, Gordon Moore, Andy Grove

Intel overview

“Leaders have to act more quickly today. The pressure comes much faster.”

Andy Grove

Microprocessor Internet

1968s 1980s 1990s

DRAM

DRAM Business

Microprocessor Company

Personal computer aging

Customer & Supplier Relationship

Intel & The internet

Why Intel exit from DRAM !!!

Cost Sale

Company Market Share (%)

1. Hitachi 15.1

2. NEC 13.0

3. TI 10.8

4. Fujitsu 7.8

5. Toshiba (tie) 7.1

5. Mostek (tie) 7.1

6. Motorola 6.1

7. Mitsubishi 4.0

8. Intel 3.4

9. National 1.1

• Invest heavily in Manufacturing• Worked closely with equipment manufacturers • Strength in manufacturing, yields were high as 80%,

where in us it was around 60% • Much faster at developing process technology and

ramping up production capacity

Japan Strategy in DRAMs

Semiconductor Product

DRAM Microprocessors

Intel Branded

Change Structure & Dynamics

Difficult to Imitate

Higher profit

A little opportunity for setting Standard

Can't protect technology

Easier to Imitate

Dynamic random access memory (DRAM)

Microprocessor

Semiconductor Product Development

Intel in the Internet

Personal Computer

Two basic function

Own data & application

Sharing data with others

Third class of use in Internet

Sharing data and application center; Network Computer (NC)

All competitors are taking advantage of the opportunities provided by the internet,

What about our competition???

Business Environment

• Cooperation between industrial sector such as IBM , Compaq use intel processor.

• Accessing & transfer technology to suppliers.

• Presence of high quality of • –Information infrastructure.• –Scientific and technological

infrastructure.

• The embedded product need high performance. semiconductor technology to gain performance on their system.

• Japan is also able to export quality DRAM as heavy in vestment in manufacturing.

• Intel has more resource to invest in new technology.

• Intel inside.• Design new and complex circuit

for semiconductor product.

Firm Strategy, Structure and

Rivalry

Demand Conditions

Related & Supporting

industryFactor Conditions

Demographic :Why Silicon Valley?

Silicon Valley

 Silicon chip innovators & manufacturers

High-tech Innovation & Development

World's largest Technology Corporations

American high-technology economic sector

Stanford University

Perhaps even more importantly, a range of new technologies -- the microprocessor, the laser, fiber-optics, and satellite -- appeared in the late 1990s to be making the American economy significantly more productive than economists had thought possible

Federal Reserve Chairman Alan Greenspan

said in mid-1999

Drivers of competitiveness

Building & Upgrading Semiconductor Industry

Research & Development

Technology Constrain

Material Supplier

Semiconductor production

Embedded System

Marketing

Distributor

User

Processing Machinery

Technology Standard

High Education Level and Skill

Relationship

Creating and sustaining competitive advantage in microprocessors

Value Creation

• Creating Value by becoming Standard

Value Capture

• Capturing value by becoming a proprietary Standard

Sustaining Value

• Sustaining value by countering threats

Key issue & Recommendation

High Investment in machine & technology

• Reduce cost of manufacture.• Value chain management.• Technology transfer & Ramp-up.

Issue Recommendation

Move Quickly to New generations

• Invest in R&D for new technology. • Create demand in the market

More competitive industry

• Value added to the product.• Brand recognition; intel inside.• Blue ocean Strategy (Innovation)

Inspired Innovation… That's Changing the World.

Team’s members

1. Kanruethai Boonyarit ID 5610224008

2. Chutikan Chaiyachart  ID 5610224022

3. Julalak Jirasakpisarn ID 5610224024

4. Yodthorn Ratana anan ID 5610224033

5. Warunya Wongdanee ID 5610224039

6. Sowwaluk sangeamjit ID 5610224047

7. Wilailak Sangarreekul ID 5610224049

8. Thanakit Jarasboonpaisan ID 5610224077

9. Jakkraphon Siriphatthanakul ID 5610224081

10. Nuengruthai suksodkiew ID 5610224087