What Was Intel’s Dram Strategy?

Intel, 1968-2003

What was Intel’s DRAM strategy?

Intel developed the first DRAM. Intel’s strategy was based on product design. Their strategy included pricing high in the beginning stages when the product first developed. Intel also chose a more futuristic approach; deciding to move to new generations when competitors offered substitutes.

Why did Intel’s Dram market share decline so dramatically from 1974 to 1984? To what extent is this decline attributable to strategy?

Intel’s DRAM market share declined when the Japanese entered the market. Intel was a small company competing against larger Japanese companies. The Japanese had a competitive advantage because of their supplier relationships. Apart of the Japanese strategy was to build close relationships with their suppliers which allowed them to develop and improve DRAM manufacturing machinery to increase results.

This decline is attributable to Intel’s strategy. Part of Intel’s strategy was to focus on product design so they paid less attention to process development. While firms who focused more on process development, such as the Japanese, had better manufacturing processes which gave them a competitive advantage. Also with Intel focusing on new generations, the DRAM was more complicated and complex to design and manufacturing the DRAM.

What was Intel’s microprocessor strategy? What threats has Intel faced in sustaining its competitive advantage?

Some threats that Intel Faced in sustaining competitive advantage was imitation, substitution, buyer power and also competition. Intel faced competition from AMD as they tried to imitate and copy Intel’s microprocessor. The establishment of RISC was considered a huge threat to Intel. RISC was an alternative architecture to Intel’s microprocessor, RISC also created buyer power as buyers wanted the RISC architecture instead of the microprocessor. To combat this Intel released the i-860 and introduced an improved version of x86. Another threat Intel faced was with their relationship with Microsoft, complementary software was significant and Microsoft often had bargaining power as Intel had to wait for Microsoft to produce in order to get a complementary system. Intel also had to compete with Microsoft as well.