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Intel Corporation

In: Business and Management

Submitted By jsmith0003
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What strategy did Intel use to gain a competitive advantage in microprocessors?

Intel gained its competitive advantage by focusing on its competitors, buyers and suppliers. The company focused mainly on a strategy of leadership at the development stage in conjunction with an aggressive marketing campaign. Intel faced a dual threat from outside companies making Clones and RISC architecture. Intel was able to counter these threats by being a leader in innovation of new products. Intel continued to improve its products at a very high rate, which greatly helped Intel command a premium lead in its technology and product offerings over the competition. This is a highly technical field with new technology in chips demanding higher and more premium chips. Even with updating the facilities this means also to utilize economies of scale to gain a cost advantage, these combinations will give the ability to introduce new chips to increase their profit margins. The aggressive marketing campaign such as the Crush and Checkmate campaigns along with the latest Intel Inside campaign that has played a major role in gaining a competitive edge and building brand recognition for the company.

What threats has Intel faced in sustaining its competitive advantage in microprocessors?

Intel has faced many threats over the course of the years. Intel has been threatened by other entrants to the microprocessor market virtually since they started making microprocessors. The Asia firms have proven over the years to be one of the company’s biggest threats with foreign entry into the processor market, taking over the DRAMs business from Intel altogether. Pricing was also a problem in the past for Intel, and for them in the present, since companies cannot surpass Intel with their chips efficiency these companies are making cheaper chips and at an alarming rate. This is where the volume is right now along with the current shift in the market to low end computers and Intel isn’t there competing, and it’s also bringing me to shed some light on what some of their current threats are today. Declining PC sales is an enormous threat to Intel right now and since Intel relies heavily on PC sales and since last year that has dropped some 8% of their total net revenue. With the world looking to smartphones and tablets, Intel isn’t in the running, with iOS and Android dominating the market with these devices, it will be hard for Intel to squeeze in and capture much of the market share. With Microsoft taking to the market, the real question is will they leave Intel behind on this journey?
Also, I want to leave this thought with everyone, one last threat that is currently one of the biggest threats to all companies is threats with viruses and malware that could potentially steal vital information from the company and its partners.

Why has Intel been able to sustain its advantage in microprocessors, but not in DRAMs?
Intel Company started out in the DRAMs industry doing quite well, but Intel could not sustain its competitive advantage within the industry. Intel’s company strategy was pushed to its limits by the competition coming out of Asia firms and because of the short life cycle of the DRAMs. The Asia firms were producing higher memory DRAMs than Intel. Intel struggled with the updating and development of its production facilities and this damaged their brand name and presence in the market for DRAMs. The Asia firms were investing moderately in their manufacturing processes and with production equipment. This was one of the major reasons why Intel lost its competitive advantage over the DRAMs market.

References: Company Profile-The Intel Corporation" The Industry Standard. 1999. Intel Unveils New Technologies For Future Cell Phone, PDA Processors Based On Intel® XScale® Technology" (September 17, 2003): Ramon Casadesus-Masanell, David B. Yoffie, and Sasha Mattu. “Intel Corporation: 1968-2003.” Harvard Business School Case # 9-703-427. Boston: Harvard Business School Publishing, Revised 2005.

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