CASE ANALYSIS: INTEL CORPORATION, 1992
1. What is driving the changing competitive structure of the microprocessor market?
Change in the competitive structure of the microprocessor market at the beginning of 1992 was being driven primarily by Intel's own success in that market, which in turn was the outcome of the combination of Intel innovation, IBM's personal computer product strategy, and incredible strategic blunders by Apple Computer. Intel designed a microprocessor for use in personal computers, and then continued to improve the product through technological innovation. IBM selected to Intel microprocessor for use in its own personal computers and adopted a product strategy that not only allowed but encouraged third-party vendors to develop and market hardware and software to support the IBM personal computer. By contrast, Apple Computer, the early leader in the microcomputer market, maintained a proprietary strategy that prohibited major efforts by third-party hardware vendors and operating system developers. One outcome of this combination of events was the rapid dominance of the personal computer market by machines driven by Intel microprocessors. The IBM product strategy created opportunities for third-party hardware manufacturers to produce clones of the IBM PC, and activity that increased the market share of Intel-based machines and, in turn, Intel's own sales. The massive market for Intel microprocessors that developed attracted competition for the development of microprocessors that essentially were clones of the Intel microprocessor.
2. What role, if any, do Intel's cash management and financial slack have in its competitive strategy?
By the beginning of 1992, the personal computer market was being driven by continuing technological innovation. Intel's strategic mission was to be the technological leader as well as the sales leader in the microprocessor market. If fact, by 1992, sales leadership in ...