- Strategic Leadership - Case Study Example

Intel’s strategy in dynamic random access memory (DRAMS) was to capitalise on product design whereby it will be seen as the first to market newest products in the market. Its products were unique in that they were very complex in the technology that was used in their manufacturing. The organisation triumphed on introducing devices and process technology that was ahead of competition and would attract premium prices. The dramatic decline in Intel’s market share in DRAM market from 1974 to 1984 can be attributed to the emergency of Japanese competitors who rapidly introduced products against the backdrop of the shrinking product life cycle for DRAMS. The Japanese manufacturers of DRAMS had a strategy of investing in manufacturing which gave them a manufacturing cost advantage compared to Intel. Japanese competitors were much faster in developing process technologies and improving yields as compared to Intel and this significantly contributed to its dramatic decline in market share in the DRAM market during the period mentioned above. 2. As an executive leading a DRAMS producer between 1974 and 1984, I would certainly take certain steps as going to be outlined below in response to the changing trends in the industry. First and foremost, I would embark on a drive to combine both memory capacity and single power feature as one entity of the DRAM. The emergency of the Japanese competitors heralded a new trend whereby their DRAMS had a larger memory capacity compared to Intel which gave them a competitive advantage over Intel. However, Intel had a unique single power feature which could not be found on products produced by the other competitors. Against this background, I would strive to combine these two features into one component so as to appeal to many customers. This would make the DRAMs manufactured by the company I would be heading more unique compared to the others produced by the Japanese competitors. In order to gain competitive advantage, uniqueness is a virtue whereby an organisation is assured of appealing to more customers. In most cases, a product that is unique stands better chances of succeeding in the market because it will be different from the other offerings of the same nature in the market. 3. Given that I am the executive leading Intel, I would follow the following steps discussed below in response to the Japanese given that I was committed to stay in DRAMs. First and foremost, I would embark on market research so as to be better positioned to stay abreast with all the changes taking place in the market. Indeed, the environment in which business operates is dynamic and is subject to change hence I will prioritise market research so as to stay ahead and better positioned to know the changing tastes of the customers. Through conducting market research, I will be better positioned to anticipate the needs of the customers hence manage product development with full knowledge of what will appeal to the customers from different market segments. I will also embark on a drive to improve on production while at the same time retaining uniqueness of the products offered. I would seek to gain a cost advantage through devising means of production that will lower the production costs. Lowering the production cost will greatly help in increasing the revenue generated for the organisation as this will entail that less money will go towards production costs. I will also emphasize on maintaining of uniqueness of the products offered so as to appeal to a wide number of customers. This will enable me to lead the organisation to be a low cost producer with high value option. 4. I would definitely pursue branding strategy in DRAMs for different marketing purposes. Basically, branding is mainly concerned with creation of an identity of the product that will distinguish it from the other products offered in the market. In DRAMs, this strategy will definitely give a competitive advantage given that there are many players in the industry and as noted above, the competition is stiff. A brand strategy that is effective is always advantageous in that it will give and organisation a competitive edge over the other rival competitors in the industry. Branding itself is advantageous in that it not only distinguish itself from the other brands but speaks volumes about the promises made to the customers which will certainly create a particular perception about the organisation and its products compared to the others. Through branding, it is equally easy to create brand loyalty among the customers and this gives the organisation a competitive advantage over the other players. Having created this loyalty among the customers, it becomes apparently easy to charge for more on BRAMs since the customers will be able to identify with a particular brand. 5. Intel gained a competitive advantage in microprocessors through aggressive marketing campaigns to secure design wins that included the IBM contract. This enabled the organisation to gain a competitive edge over Motorola which was the rival competitor. The organisation ended up licensing only IBM to manufacture the chips that were used in manufacturing PCs and this contract was big which was advantageous for the organisation. The organisation was also able to improve on manufacturing performance which gave it an advantage in that it was able to meet the demand. The organisation’s 386 production became an instant hit with Compaq compared to the cheap 286. However, the threats that faced Intel include the following: the 386 production was not compatible with the software since it was offering important technological advances which were not supported by the existing versions of MS-DOS (Microsoft Disk operating system). This 386 gave Intel’s major competitive advantage. Intel faced another threat when it launched its generation 80486 from an alternative microprocessor architecture RISC (Reduced Instruction Set Computing). This was seen as having speed and cost advantage over the CISC (Complex instruction Computing) which was Intel’s X86 line. Intel sustained its competitive advantage in that it had its own powerful RISC microprocessor, i860. The company was mainly concerned with producing products that were compatible with the x86 software. The threat of RISC led the company to develop the Pentium which was the next generation after 486. Intel also faced a problem of cloning whereby it sought to protect its property rights but it was difficult to block entry into microprocessors. Intel also faced a threat of competitors such as the entry of ABM. However, it countered these threats through continuous innovation such as the Pentium 5 and Pentium 6 pro. Intel has been able to sustain its advantage in microprocessors than BRAMs mainly as a result of the fact that it was able to stay ahead with new technological developments. It also managed to sustain its advantage in microprocessor through aggressive branding such as the Intel inside which was an advertising campaign meant to appeal to the interests of the customers. 6. As a result of the growing competition in the industry related to computer technology, it can be seen that its future hinges on its ability to be continually innovative whereby it will be able to meet the ever changing developments in the market. If Intel stays ahead and continues to offer products that are compatible with the type of machines being manufactured, it will stand better chances of remaining a leader in production of especially microprocessors. However, the main challenge it is facing now is the rapid expansion of the internet as it may fail to keep pace with the latest development with regards to securing information by the users. Connectivity through the internet is made very easy and this may be challenging for the organisation to secure information from the third parties. From an investor’s perspective, I am of the opinion that Intel should continue investing in product design and development so as to be able to keep pace with the ever changing technological advancements obtaining on the ground. Besides investing in technological development alone, Intel should also invest in marketing research so as to be better positioned to anticipate and meet the needs of the customers. Read More