Competitive Strategies Case Study

Intel vs AMD: AMD has the Last Laugh?

OR

Abstract:
The birth and evolution of the microprocessor industry is synonymous with the history of Intel. From a company that manufactured memory chips in the 1970s, Intel transformed into a microprocessor-manufacturing powerhouse that dominated the microprocessor industry and dictated terms to the PC industry. One of the main factors responsible for Intel's meteoric rise was its ability to respond to the market with innovative products. Until the late 1990s, Intel had a complete grip on the microprocessor market with more than 80% share. No rival could compete with Intel's technological and marketing clout. Then in 1999, a small company named AMD launched Athlon, a 64-bit desktop microprocessor with superior performance compared to similar Intel microprocessors. AMD followed it up with a 64-bit server microprocessor called, Opteron. AMD consistently came out with superior products compared to Intel and steadily started gaining market share. Intel realised that a company that was one-tenth its size was a serious threat to its leadership position. In an effort to contain market losses and regain its lost glory, Intel implemented extensive changes including restructuring and re-branding. Meanwhile, AMD was also trying to build on its previous successes and depose Intel from its leadership position in the microprocessor industry.

Pedagogical Objectives:

• To identify and analyse the strategic inflection points in the microprocessor industry
• To discuss the growth strategies of Intel and AMD over the years
• To discuss the reasons underlying Intel's failure in anticipating the threat from AMD
• To discuss the strategies implemented by AMD to gain a competitive edge over Intel
• To discuss whether the new initiatives taken up by Intel and AMD respectively will enable them to gain a sustainable competitive advantage over the other
• To discuss, what strategies Intel and AMD must adopt, in the light of changing market dynamics.

Keywords : Intel AMD; Semiconductor industry; Microprocessor market; Strategic inflection points; Competitive Strategies Case Study; Growth strategy; Competitive strategy; Branding Restructuring; Competitive advantage Market share; Gordon Moore,Robert Noyce; Andrew Grove,Paul Otellini; Jerry Sanders, Hector Ruiz; Intel Pentium, Itanium, Xeon, Centrino; AMD Opteron Athlon Dual Core; Dell HP Sun Microsystems; Platform strategy

Contents : 
The Semiconductor Industry: Growth of Intel and AMD
Total Semiconductor World Market Sales & Shares
Intel vs AMD: The War for Market Dominance
Offensive and Counter-offensive
Business Groups at Intel after Restructuring
Intel’s Brand Evolution
Intel’s New Brand Architecture