Transcript
Submitted by: Ankita Jain Jain Monika Stan Palak Mittal Sahil Narang Swati Tomar
Overview
Company Overview History Mission Statement Goals and Objectives Core Values External Environment Competition Industry Life Cycle R&D ◦
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Overview (Continued)
The Intel Case: Fading Memories (Burgelman, 1991, 1994) Leadership & Capabilities Model (LCM) Reconsidering the Intel case Observations and Conclusions PRODUCT AND SERVICES Internal Environment Current Financial Performance vs. Rivals SWOT Analysis SWOT Matrix BGC Matrix Future ◦
Company 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.
History
1968 Robert Noyce and Gordon Moore incorporate NM Electronics . 1970 The development of DRAM and dynamic RAM 1971 The world‟s first microcomputer is introduced 1974 The first general purpose microprocessor is introduced to the world 1992 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.
Mission 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 Reach
Philippines Malaysia Shanghai Israel Ireland Massachusett s Costa Rica New Mexico Colorado Arizona California Oregon
Company Objectives
Extend our silicon technology and manufacturing leadership. Deliver unrivaled microprocessors and platforms. Grow profitability worldwide. Excel in customer orientation.
Company 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
Intel AMD, TI, Cyrix Motorola
Competitors 日本のDRAM
IBM Direct
Kyocera, etc
Suppliers
Intel
Channel
Customers
Licensees -IBM -Others
Compaq Dell Packard Bell
C H A N N E L
E N D U S E R
RISC
Substitutes Software collaborators Providers OS Application • •
Identifying the problem
Due 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 Solution Intel 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 Program
Designing 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 program
Awareness 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.
Power of Intel brand equity
Leveraging Brand Equity Year Brand Equity Interbrand Rank
2008: 2007: 2006: 2005: 2004: 2003: 2002: 2001:
$31,261 mln $ 30,954 mln $ 32,319 mln $ 35,588 mln $ 33,499 mln $ 31,112 mln $ 30,860 mln $ 34,670 mln
7 7 5 5 5 5 5 5
Intel Memory Market Share and Sales (Adapted from Burgelman, 1994; Grosvennor, 1993)
800
80%
s700 n o i l l i600 m $500
75% 70% 65% 60% 55% 50%
45% 400
40% 35%
300
30% 25%
200
20% 15%
100
10% 5%
0
0% 1974
1975
1976
1977
1978
1979
1980
Year
1981
1982
1983
1984
e r a h S t e k r a M
Estimated memory Sales and Estimated Microprocessor Sales (Adapted from Burgelman, 1994; Grosvennor, 1993) $1,400
$1,200
$1,000
$800
$600
$400
$200
$0 1974
1975
1976
1977
1978
Estimated Memory Sales
1979
1980
1981
1982
Estimated Microprocessor Sales
1983
1984
Brief 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 Corp: Cost and price curves
Intel‟s Strategy with DRAM
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
Why was Intel unsuccessful in the DRAM Market?
Wrong Strategy ◦
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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?
Be careful with unidimensional (one product) strategy Protect 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 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
Some Important Strategic Ideas
Where is the most “value” in a computer?
Success attracts competition, company must protect against ◦
Technology moved so rapidly that patents became obsolete ◦
protect by know-how, branding, scale, luck
Small stuff that goes inside other stuff ◦
2005 Intel has 82% of PC processor market
Allows focus, expertise, scale, “piggy-backing”
Thrived on derived demand driven growth and rapid change
