AMDvs.Intel Case Notes - AMD vs Intel Competitive...

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AMD vs. Intel: Competitive Challenges CASE ASSIGNMENT Hector Ruiz, Chairperson and CEO of AMD, has asked you to lead a strategic training session for mid-level managers. The goal of the program is to emphasize the impact of competitive dynamics on strategy formulation and implementation. You have agreed to present and discuss the following topics: I. The Hypercompetitive Environment of the Chip Industry II. Technology Diffusion and Disruptive Technologies III. Competitive Rivalry in the Industry A. Using the Competitive Rivalry Model B. Interpreting the Competitive Rivalry Model C. Predicting Competitor Behavior Based on the Analysis IV. Innovation A. Internal Innovation B. Innovation Through Strategic Alliances C. Innovation Through Acquisitions V. Recommendations to Achieve Strategic Success and Profitability You should prepare overview PowerPoint slides for the group, and summarize your material in a written report for Ruiz to share with the board of directors. The content of your program should be based on the most current thoughts in the field of strategic management. 44
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AMD vs. Intel: Competitive Challenges STRATEGIC MANAGEMENT INPUTS I. The Hypercompetitive Environment of the Chip Industry The fundamental nature of competition in many of the world’s industries is changing. The pace of this change is relentless and increasing. Conventional sources of competitive advantage such as economies of scale and huge advertising budgets are not as effective as they once were. Moreover, the traditional managerial mind-set is unlikely to lead a firm to strategic competitiveness. Managers must adopt a new mind-set that values flexibility, speed, innovation, integration, and the challenges that evolve from constantly changing conditions. The conditions of the competitive landscape result in a perilous business world, one where the investments required to compete on a global scale are enormous and the consequences of failure are severe. The chip industry is intensely competitive, particularly between the two largest chip manufacturers - Intel (who holds the industry's top position and sets desktop processor standards) and AMD (who is beginning to successfully challenge Intel's leadership position). Contracts with major computer manufacturers and other significant customers can cause an immediate swing in the chip makers' market shares. Growing demand for electronics and rapid technological advancements characterize this industry that obliterates the company that stands still. Hypercompetition describes the realities of the competitive landscape for semiconductor producers. In this industry, the notion of market stability is replaced by an assumption of inherent instability and change. Hypercompetition results from the dynamics of constant strategic maneuvering among innovative, global combatants. Rapidly escalating competition results from price-quality positioning, the frantic race to beat competitors to the market with innovative products and technology to establish a first-mover advantage
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AMDvs.Intel Case Notes - AMD vs Intel Competitive...

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