Submitted by:Ankita Jain Monika Stan Palak Mittal Sahil Narang Swati Tomar Wartika VashishtOverview Company Overview ◦ History ◦ Mission Statement ◦ Goals and Objectives Core Values External Environment ◦ Competition ◦ Industry Life Cycle ◦ R&D Rivals SWOT Analysis SWOT Matrix BGC Matrix Future . 1994) Leadership & Capabilities Model (LCM) Reconsidering the Intel case Observations and Conclusions PRODUCT AND SERVICES Internal Environment ◦ Current Financial Performance vs. 1991.Overview (Continued) The Intel Case: Fading Memories (Burgelman. . Intel also makes motherboard chipsets. flash memory. network interface controllers and integrated circuits. It is the inventor of the X86 series of microprocessors.Company Overview Intel is the world's fifth most valuable brand valued at around $35 billion. graphic chips. embedded processors and other devices related to communications and computing. the processors found in most personal computers. The Pentium 11 microprocessor is introduced to the world 1999 Intel is added to Dow Jones Averages. .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. Mission Statement “Delight our customers. and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live. employees. “ . Geographic Reach Philippines Malaysia Shanghai Israel Ireland Massachusett s Costa Rica New Mexico Colorado Arizona California Oregon . . Excel in customer orientation. Grow profitability worldwide. Deliver unrivaled microprocessors and platforms.Company Objectives Extend our silicon technology and manufacturing leadership. Company Values • • • • • • Customer orientation Results orientation Risk taking Great place to work Quality Discipline “Our values are timeless and do not depend on businessconditions. Intel Chairman .” —Andy Grove. Cyrix Motorola Competitors 日本のDRAM IBM Direct Kyocera. TI.Intel AMD. 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 . Intel wanted consumers to recognize its product through the brand Intel itself that connoted reliability and superior performance. .Identifying the problem Due to a number of clone products in the market. Consumers were left baffled for choice and often guessing as to the content and performance of MP. Intel was unable to differentiate its products from the herd. Consumers knew Intel through its product offerings which were often being cloned. Developing and using a brand logo in advertisements of OEMs. Prolific advertisement to create awareness about importance and superiority of Intel chips. 2. Engaging tier 2 and 3 OEMs in the program via profitable propositions.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. 3. . Direct advertisement aimed at organizational rather product communication thus enabling a „brand consumer connect.‟ .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. 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. . That.Assessing the program Awareness of Intel logos prior to IB strategy was a meagre 24% in European PC market. Power of Intel brand equity . 319 mln $ 35.954 mln $ 32.112 mln $ 30.Leveraging Brand Equity Year Brand Equity Interbrand Rank 2008: 2007: 2006: 2005: 2004: 2003: 2002: 2001: $31.670 mln 7 7 5 5 5 5 5 5 .499 mln $ 31.588 mln $ 33.860 mln $ 34.261 mln $ 30. 1994. 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% .Intel Memory Market Share and Sales (Adapted from Burgelman. Grosvennor. Estimated memory Sales and Estimated Microprocessor Sales (Adapted from Burgelman.200 $1.400 $1. 1994. 1993) $1.000 $800 $600 $400 $200 $0 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 Estimated Memory Sales Estimated Microprocessor Sales . Grosvennor. e. was more adaptively robust that top-down strategy Combination of top-down strategy and bottom-up. “the production rule”that favored microprocessors. 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 ..Brief Conclusion Strategic decision in 1984 to exit memory was “sensemaking” after-the-fact Intel‟s internal selection environment. or autonomous. i. Intel Corp: Cost and price curves . Intel also produced World‟s first 1Kb DRAM. Intel emphasis was on product design.Intel‟s Strategy with DRAM Innovative Design: Intel was the first to develop DRAM. Thus. Price High in early life-cycle: make money and reinvest in subsequent generations. not so much on process development or realizing . Intel moved to new generations. Moor‟s Law was the brain child of Gordon Moore who was the founder. Move Quickly to New generations: As competitors offered substitute products and overall market price decreased. The law was based on the demand of memory . 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. Use current profits to develop complimentary capabilities. Life span of strategies are getting shorter. Competitive advantage is temporary. 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 . scale. branding. “piggy-backing” Thrived on derived demand driven growth and rapid change . company must protect against ◦ 2005 Intel has 82% of PC processor market Technology moved so rapidly that patents became obsolete ◦ protect by know-how. expertise. scale.Some Important Strategic Ideas Where is the most “value” in a computer? Success attracts competition. luck Small stuff that goes inside other stuff ◦ Allows focus.