intel case study_presentation
TRANSCRIPT
OverviewOverviewCompany Overview
◦ History◦ Mission Statement◦ Goals and Objectives
Core ValuesExternal Environment
◦ Competition◦ Industry Life CycleIndustry Life Cycle◦ R & D
Overview (Continued)Overview (Continued)The Intel Case: Fading Memories (Burgelman,
1991, 1994)Leadership & Capabilities Model (LCM)Reconsidering the Intel caseObservations and ConclusionsPRODUCT AND SERVICES Internal Environment
◦ Current Financial Performance vs. RivalsSWOT AnalysisSWOT MatrixBGC MatrixFuture
Company OverviewCompany Overview Intel is the world's fifth most valuable brand
valued at around $35 billion. It is the inventor of the X86 series of
microprocessors, the processors found in most personal computers.
Intel also makes motherboard chipsets, network interface controllers and integrated circuits, flash memory, graphic chips, embedded processors and other devices related to communications and computing.
HistoryHistory1968 Robert Noyce and Gordon Moore incorporate
NM Electronics .1970 The development of DRAM and dynamic RAM1971 The world’s first microcomputer is introduced 1974 The first general purpose microprocessor is
introduced to the world1992 Intel’s net income tops the one billion dollar
point 1993 The Pentium is introduced, a fifth generation
chip 1997, The Pentium 11 microprocessor is introduced
to the world 1999 Intel is added to Dow Jones Averages. 2000 The world’s very first Intel 1 gigahertz
processor hits the shelves.
Mission StatementMission Statement
“Delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live. “
Geographic ReachGeographic Reach Philippines Malaysia
Shanghai Israel Ireland Massachuse
tts Costa Rica New Mexico Colorado Arizona California Oregon
Company ObjectivesCompany ObjectivesExtend our silicon technology and
manufacturing leadership.Deliver unrivaled microprocessors and
platforms.Grow profitability worldwide.Excel in customer orientation.
Company ValuesCompany Values• Customer orientation• Results orientation • Risk taking • Great place to work • Quality • Discipline
“Our values are timeless and do not depend on businessconditions.”
—Andy Grove, Intel Chairman
IntelIntel
10
IntelSuppliers
Competitors
Substitutes
Channel CustomersKyocera, etc
Motorola
AMD, TI, Cyrix
RISC
日本の DRAM
END
USER
Licensees-IBM-Others
DirectIBM
CompaqDell
Packard Bell
CHANNEL
SoftwareProviders• OS• Application
collaborators
Identifying the problemIdentifying the problemDue to a number of clone products in
the market, Intel was unable to differentiate its products from the herd.
Consumers were left baffled for choice and often guessing as to the content and performance of MP.
Consumers knew Intel through its product offerings which were often being cloned. Intel wanted consumers to recognize its product through the brand Intel itself that connoted reliability and superior performance.
Developing Strategic Developing Strategic SolutionSolutionIntel Coop Program marked the
birth of brand Intel.The program intended to levitate
Intel as a brand through 3 strategic steps:
1.Developing and using a brand logo in advertisements of OEMs.
2.Engaging tier 2 and 3 OEMs in the program via profitable propositions.
3.Prolific advertisement to create awareness about importance and superiority of Intel chips.
Implementing the Coop Implementing the Coop ProgramProgramDesigning a unique logo.Convincing tier 2 and 3 OEMs
initially of the short term and long term benefits of alliance and engaging them.
Direct advertisement aimed at organizational rather product communication thus enabling a ‘brand consumer connect.’
Assessing the programAssessing the programAwareness of Intel logos prior to IB strategy
was a meagre 24% in European PC market.That, within 2 years of its launch soared wildly to 94%
Worldwide sales within a year of launch of IB strategy rose by63%.
By 2002 Intel broke into the list of top 10 most valuable brands.
Leveraging Brand EquityLeveraging Brand EquityYear Brand Equity
Interbrand Rank2008: $31,261 mln 72007: $ 30,954 mln 72006: $ 32,319 mln 52005: $ 35,588 mln 52004: $ 33,499 mln 52003: $ 31,112 mln 5
2002: $ 30,860 mln 52001: $ 34,670 mln 5
Intel Memory Market Share and SalesIntel Memory Market Share and Sales(Adapted from Burgelman, 1994; (Adapted from Burgelman, 1994; Grosvennor, 1993)Grosvennor, 1993)
Estimated memory Sales and Estimated memory Sales and Estimated Microprocessor Estimated Microprocessor SalesSales (Adapted from Burgelman, 1994; Grosvennor, 1993) (Adapted from Burgelman, 1994; Grosvennor, 1993)
Brief ConclusionBrief Conclusion Strategic decision in 1984 to exit memory was
“sensemaking” after-the-fact
Intel’s internal selection environment, i.e., “the production rule”that favored microprocessors, was more adaptively robust that top-down strategy
Combination of top-down strategy and bottom-up, or autonomous, strategy is enacted at firms
• Importance of knowing how and when to bring top-level official strategy in line with bottom-up strategic action
• Such realignment does not necessarily involve a change in leadership
Intel’s Strategy with Intel’s Strategy with DRAMDRAM
Innovative Design: Intel was the first to develop DRAM. Moor’s Law was the brain child of Gordon Moore who was the founder. The law was based on the demand of memory . Intel also produced World’s first 1Kb DRAM.
Price High in early life-cycle: make money and reinvest in subsequent generations.
Move Quickly to New generations: As competitors offered substitute products and overall market price decreased, Intel moved to new generations.
Thus, Intel emphasis was on product design, not so much on process development or realizing efficiencies through manufacturing .
Why was Intel unsuccessful Why was Intel unsuccessful in the DRAM Market?in the DRAM Market?Wrong Strategy
◦Intel though that pushing product design through new features
◦Lack of process capabilities and efficient manufacturing capabilities resisted putting new features to market.
◦Japanese also entered the EPROM market
What did Intel learn? What did Intel learn? Be careful with unidimensional (one
product) strategyProtect your technological
innovations or avoid commodity business. When a novel technology becomes a commodity, the company(s) with higher manufacturing capability wins.
Competitive advantage is temporary. Life span of strategies are getting shorter.
Use current profits to develop complimentary capabilities.
Creating and sustaining Creating and sustaining competitive advantage in competitive advantage in microprocessors microprocessors
Some Important Strategic Some Important Strategic IdeasIdeasWhere is the most “value” in a computer? Success attracts competition, company must
protect against ◦ 2005 Intel has 82% of PC processor market
Technology moved so rapidly that patents became obsolete◦ protect by know-how, branding, scale, luck
Small stuff that goes inside other stuff◦ Allows focus, expertise, scale, “piggy-backing”
Thrived on derived demand driven growth and rapid change