Industry : Semiconductor Founded : July 18, 1968 Headquarters : Santa Clara, California , US Products : Bluetooth Chipsets

Flash memory Microprocessors Motherboard Chipsets Network interface controllers Solid State drivers Central Processing Units

First Product : Schottky Bipolar RAM

INTRODUCTION

Revolution in Evolution

JOURNEY TO BEING INDUSTRY LEADER

Strategic decision in 1984 to exit

memory

As competitors

offered substitute products

and overall market price decreased, Intel moved

to new generations.

Intel emphasis

was on product

design, not so much on

process developme

nt or realizing

efficiencies through

manufacturing

Intel’s internal

selection environment

, i.e., “the

production rule”that favored

microprocessors, was

more adaptively robust that top-down strategy

Creating and

sustaining competitive advantage

in microproces

sors

Diversification

JOURNEY TO BEING INDUSTRY LEADER- RISE AND FALL OF DRAM

Emphasis was on product design, not so much on process development or realizing efficiencies through manufacturing . • Innovative

Design• Price High

in early life-cycle

• Move Quickly to New generations

Japanese Entered the Market• Lower

interest rates

• Sophisticated Demand

• More efficient

• Manufacturing strength of 80% yield

Japanese Strategy• Closer

relationships with equipment suppliers

• Worked on process and equipment development

Increased Complexity• Difficult to

understand• Overrelianc

e on product strategy

• Lack of access to capital

Wrong Strategy• Pushing

product design through new features

DRAM

UNSUCCESSFUL

Unidimensional (one

product) strategy

JOURNEY TO BEING INDUSTRY LEADER- LESSONS LEARNT !

Protect your technological innovations

Use current profits to develop

complimentary capabilities.

Competitive advantage is

temporary

Higher manufacturing capability win

JOURNEY TO BEING INDUSTRY LEADER- WHAT FAVOURED THE TRANSITION?

Intel’s successful transition had more to do

with unique circumstances (luck) than strategy (brains)

Loss of market share in memory (precipitating ultimate exit) predated

successful transition to microprocessors – no transforming strategy

was articulated.

Market for microprocessors

developed quickly – little time delay between

investment in exploration & sustaining rents

(feeding the positive feedback loop) – thus limiting the need for

sustained commitment to exploration investment

Intel was well positioned with respect to process

technology design capabilities to

successfully explore microprocessor market

Disadvantages with DRAM What Intel did right with Microprocessors?

Easier to Imitate

Difficult to patent

There is no microcode that can be protected

There was little opportunity for a proprietary Standard

Intel Branded the Microprocessor

Kept the No. of Competitors down

Changed Industry structure and dynamics

Successful at counteracting threats to sustainability

DRAM v/s MICROPROCESSORS

Market Share Intel gains the market share of 80% which seems more or less like a monopoly for Intel Corporation.

MARKET SHARE

FIRST INTEL AD

1991- THE MEASLES AD

Intel Inside Campaign

1991

Intel capturing

90% of world computers

MARCOM AWARD (1992), GRAND

MARQUIS WINNER (1992)

Benchmark of microprocessor industry

Business to business behavior

Increase worldwide sales

INTEL INSIDE CAMPAIGN OBJECTIVE

• Incentive-based cooperative advertising program• Co-op fund• 6% rebate on microprocessor purchases• Reduce its offer in half if the PC makers add another logo

INTEL INSIDE CAMPAIGN IMPLEMENTATION

INTEL INSIDE MARKETING STRATEGY

Leapfrog strategy

Pull strategy

Derived demand

Co-branding(IBM)

Ingredient branding

Differentiation

Greater resources for R&D

Intel Inside Logo was put outside PC

Name Selection

INGREDIENT BRANDING MARKETING CAMPAIGN

INTEL INSIDE CAMPAIGN RESULT

. .

.

. .

INTEL INSIDE LOGOS

1997- BUNNYPEOPLE AD

The ad announce the arrival of the Intel “Pentium” processor.

2003- New Slogan ‘ LEAP AHEAD’

2007 – Classroom PC for children

2008 – Atom Processor

2008- New Slogan ‘Sponsors of Tomorrow’

SWOT ANALYSIS (STRENGTHS & WEAKNESSES)STRENGTHS WEAKNESSES

• Largest market share all over the world • Very technical strategy in response to its competitors

• A very strong brand value • Great steep in 2000 because of the emergence of AMD.

• Idea of microprocessor, and it has continued that legacy

• largest number global technology corporation.

• Almost every Computer brand which makes computer uses Intel products in it

• People are not familiar with any other brand apart from Intel.

• Huge investment in Research and Development department

SWOT ANALYSIS (OPPORTUNITIES AND THREATS)

OPPORTUNITIES THREATS•Market penetration and productDevelopment•Focus on cellular or broadband portion.•Forward and backward Integration•Partnerships

•Changes in consumer tastes•Change in currency value• Emergence of new and cheap• local companies.

DISCLAIMERCreated by Aakanksha Minz, SRCC, during a marketing internship byProf. Sameer Mathur, IIM Lucknow.