Intel's Strategy Change over the Decade

Intel changed its products and marketing strategy over the period of time. The company has been innovation driven both in its products and marketing strategy. Its value added changed with its innovative leading edge technology product.

In early 1970s Intel entered into the MOS DRAM market by inventing the 1103, the world’s first 1-kilobit DRAM. This was it first major breakthrough which laid the base for the company. At this time, Intel added a lot of value to the industry as this product out beat and eventually replaced the traditional magnetic core memory chips. It generated huge cash flow for Intel. But Intel could not capitalize on this market dominance because of the huge fixed cost associated with semiconductor products and the poor manufacturing process. Moreover they lacked behind on the latest designs and versions of the DRAM and eventually had to exit from the DRAM industry in 1985.

In late 1970 Intel came up with its next big innovation EPROM. The manufacturing of this product was easier and faster. Intel applied a very different marketing strategy for this product. Unlike before, this time they implemented a very systematic and quiet approach in positioning EPROM and priced it very high. With this technology Intel was able to capture as much value as it created while there was no competition. However, after the competitors figured out the technology and entered the market, the EPROM’s price deceased significantly which resulted in decreasing the Intel’s added value. Later with introduction of the flash memory devices, Intel exited the EPROM market. The memory device Market as not dominated by a single player as the big players shared the market equally.

Intel’s most notable product is the microprocessor, which Intel is still considered as the leader. Although being the inventor of Microprocessor, Intel could not initially capture the market value generated from the microprocessor and lost Apple account to Motorola. But as the need of market changed and PC industry developed, Intel made advances and invested hugely in marketing itself. As a result they were able to make key strategic partnership with IBM, a growing company that pioneered the PC industry. Through this partnership, Intel was able to capture the value it created with the invention of the microprocessor. However, early on, IBM limited Intel’s profit by requiring Intel to provide licenses to multiple suppliers of microprocessors in order for supply to keep up with demand. Intel later ramped up production and cut the number of licenses and initiated another marketing campaign. This strategy helped Intel regain its market position.

Intel continued to innovate 2nd generation microprocessor and in 1985, released 80386, the first 32bit microprocessor. This innovation was at first not widely adopted by IBM. However, Compaq decided to adopt it and the 386 became an instant success to the market. Users were willing to pay an additional