Intel Case

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1. What was Intel’s strategy in DRAMs? What accounts for Intel’s dramatic decline in market share in the DRAM market between 1974-1984? To what extend was Intel’s failure a result of its strategy? Intel’s first DRAM (dynamic random access memory) was introduced in 1971, and has become the world’s best-selling semiconductor product. Intel’s strategy was to come up with revolutionary product design and to be first to market with innovative devices. This strategy required enormous investments in process technology and manufacturing equipment. Between 1974-1984, Intel started losing market share to Japanese competition. This lost in market share can be attributed to several reasons. The first would be the fact that patents were not easily enforceable for DRAMS. Additionally the Japanese competitors have invested heavily in manufacturing and process technologies, leading to faster development cycles, higher yields, and a technological advantage. Intel’s failure can be attributed to its strategy – it competed on technological advantages, although it could be easily imitated by Japanese competitors who had an advantage in the two most important aspects influencing the success of a “technological edge” strategy – manufacturing capabilities and process technologies. 2. What strategy did Intel use to gain a competitive advantage in microprocessors? What threats has Intel faced in sustaining its competitive advantage in microprocessors and what strategies has it used to deal with each? Why has Intel been able to sustain its advantage in microprocessors, but not in DRAMs? In the early microprocessor arena, only two companies had the ability to produce microprocessors that could be used for PCs – Motorola and Intel. Intel’s strategy was based on beating Motorola by striking design wins. Specifically in 1980, Intel initiated Project CRUSH, a sales effort intended to secure 2,000 design winds, including the IBM contract. Generally, Intel has engaged in dedicated...
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