Intel Case Study

MEMORANDUM

DATE: September 13, 2015

TO: Professor Meghan Busse

FROM: Sudhir

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RE: Frameworks for Strategic Analysis, Intel Case Study

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Questions 3) Add Value - mid-1980’s and 4) Capture Value – Larger Profits

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3. Intel begins in the microprocessor business without a lot of added value, and ends up with a lot. How and why did Intel’s added value change during the mid-1980s? That is, what crucial watershed moments, events, or decisions brought about that change?

Based on the reading of the case study the following events and decisions changed how Intel “added value” over the course of its business starting with mid-1980:

Open Architecture -IBM entering the PC market in 1980’s with a strategy to gain a large market share as quickly as possible in order to set a standard and adopted an open architecture where by the company’s PCs would use software and components from any company could buy from a third party vendors. This market event allowed Intel an opportunity to enter the microprocessor business at a large scale. To address this Intel initiated “project CRUSH” to secure 2000 design wins that year including IBM contract with 8088 microprocessor against Motorola and Intel rode the coattail on IBM’s highly successful PC division ($5.5 Billion in revenues for IBM an increase of $5BN in 4 years)

Standard - In 1983, Intel introduced 80286 as part “project CHECKMATE”, execution of this project lead to converting Motorola customers to Intel (from 4:1 to 1:4 in favor). This allowed Intel microprocessor to become the dominant standard in the PCs market. Restricted licenses to four secondary sources and retaining 75% of revenues and profits. “Wintel” became an industry standard in the PC market.

Exiting DRAM - 1986 officially exiting DRAM business – which was contributing only about...