Submitted by:Ankita Jain Monika Stan Palak Mittal Sahil Narang Swati Tomar Wartika Vashisht

Overview

Company Overview History Mission Statement Goals and Objectives Core Values External Environment Competition Industry Life Cycle R&D

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 worlds first microcomputer is introduced 1974 The first general purpose microprocessor is introduced to the world 1992 Intels 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
DRAM IBM Direct Kyocera, etc C H A N N E L E N D U S E R

Channel
Suppliers

Customers
Compaq Dell Packard Bell

Intel

Licensees -IBM -Others

RISC

Substitutes
Software collaborators Providers OS Application 10

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% 75% 70% 60% 55% 50%

$ millions

700 600 500 400 300 200 100 0 1974 1975 1976 1977 1978 1979

45%
40% 35% 30% 25% 20% 15% 10% 5% 0% 1980 1981 1982 1983 1984

Year

Market Share

65%

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 1979 1980 1981 1982 1983 1984 Estimated Memory Sales Estimated Microprocessor Sales

Brief Conclusion

Strategic decision in 1984 to exit memory was sensemaking after-the-fact Intels internal selection environment, i.e., the production rulethat 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

Intels Strategy with DRAM

Innovative Design: Intel was the first to develop DRAM. Moors Law was the brain child of Gordon Moore who was the founder. The law was based on the demand of memory . Intel also produced Worlds 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
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
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