Intel
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Intel successfully shifted from memory to microprocessors in the 1970s-1980s. It empowered middle management to invest in innovative products like microprocessors without executive approval. Intel's strengths in circuit and process technology design transferred well to microprocessors. It exited the declining DRAM business in 1986. Now Intel focuses on developing integrated solutions with partners and anticipating consumer needs with new technologies that improve computing experiences. Its ERP transformation supports business scaling and changing needs.
Intel
- 2. Introduction Nearly everyone is aware of Intel. Most of the world's personal computers are driven by Intel microprocessors. Intel's vision involves giving people access to easy-to- use technologies through these platforms. It is seeking to continually satisfy customer requirements by producing a range of new and exciting products.
- 3. The Intel Case: observations • Successful shift from memory to processors - 1974 to 1984 (Burgelman, 1991; 1994) • Top-management continued to consider Intel a memory company even though market share in memory (DRAM) was in steep decline • Innovation enabled Intel to lead the market with new products • Manufacturing scale came to dominate process technology design as basis for competitive advantage • “Innovation culture” empowered middle management to invest in innovative products w/o explicit executive consent • Competences in circuit design (CD) and process technology design (TD) were transferable to microprocessors
- 4. Intel DRAM Strategy • Strategy: push product design, be first to market – Design & process technology leader – Investment in plant & equipment – Costs drop over production volume (scale) growth – Prices drop with competitive capacity – DRAM generally not protectable with patents – Japanese started introducing products more rapidly • Invested more heavily in production (44% vs. 22%) – 1986 Intel decided to exit DRAM business • 1/3 of R&D, but only 5% of Revs, was small player in market • Japanese beat Intel on process technology (of commodity)
- 5. Intel Corporation: Entry to Microprocessor • Market share in memory chips (DRAM) was in steep decline • Existing capabilities, Circuit Design (CD )& Technology Design (TD) did not match competitive dynamics • Exploration did not focus on manufacturing scale (& large market) • Middle management empowered to invest in innovative products • Exploration led to microprocessors without a top-down initiative – an example of sustained investment • Competences CD and TD were transferable to microprocessors • Avoiding timing delay associated with absorptive capacity build-up – “priming” investment in exploration came through investment in DRAM • Internal selection environment favored microprocessors • Did production rule save the day? No, the market saved the day -microprocessor market provided higher margins in self-reinforcing cycle • Production rule reflected transactional leadership efficiency: go for the highest return on incremental assets!
- 6. Developing a new strategy Intel is an 'ingredient brand'. Its products and processors form part of the products that consumers purchase. Building key relationships with leading electronic firms such as Sony and Philips is an important strategy. The aim is to provide the manufacturers of products such as laptops, mobile phones and entertainment personal computers with integrated packages of chips and software - in other words a complete solution. Systems are continually updated giving the user greater freedom. Intel's strategy is to be at the heart of new developments in home entertainment, security, medical care, etc. Its new strategy is about: •working with customers to share a vision of future technologies •developing new customer focused technologies •giving people new products that are easy to understand and use •communicating clear messages about these new products.
- 9. Developing new products In our fast changing modern world, it is essential to find out what consumers want and need. It is possible to predict trends and developments. Because Intel is at the leading edge of technological developments it is well placed to anticipate consumer requirements. Their aim is to create joint standards, improve interoperability and ease of use between different products in the home. Intel was one of the key founders and still sits on the Board of Directors. A key part of Intel's more integrated platform strategy involves the development of several technologies. These improve processor efficiency and allow computer users to take better advantage of: multi-tasking security reliability manageability wireless computing capabilities.
- 11. Conclusion ERP transformation has resulted in enterprise platform that can adapt to the speed of business and ERP system has helping make this magnitude of business scaling possible Transformed Intel's Erp environment into a system that provides increased business and velocity, improved reliability and support and enhanced cost efficiency. Transformation was necessary for us support business growth and ever changing business needs. Intel is one of the success stories of the high-tech world. It provides vital components for personal computing. Now the company is moving forward into a range of new and exciting products and markets with a much stronger focus on marketing