What strategy did Intel use to gain a competitive advantage in microprocessors? In order to get a competitive advantage Intel manages three classes of players: Competitors, Buyers and suppliers. The (Reduced Instruction set computing) RISC threat
In 1989, Intel faced with a potential competitive threat from an alternative microprocessor architecture while launching its fourth generation of 80486 microprocessor. Four key decisions led Intel to have a competitive advantage in this market. First, Intel realized, as did Motorola, that IBM's power would give it much greater strength than Apple to set standards in the industry. Intel launched two sales campaigns to secure design awards that would set the standards for chips in IBM PCs. Second, Intel continued to pursue its product leadership strategy with the 386 chip. When IBM decided to slow the development of the next generation chips after the 286, Intel worked with Compaq to push the next generation chip, the 386, to market. By getting these machines to market, Intel with Compaq set many of the standards for the design of PCs without IBM's involvement. This was an important step for Intel to establish that the producer of the machines would not the set the standards, but rather the operating system and microchip producers would set the standards for the PC. Third, Intel committed heavy resources to meet expected demand for the 386 to help ensure it would become a standard. Intel spent nearly $800 million to develop the capabilities to meet customer demand for the chips. As the 386 chips hit the market, they became a standard that other would have to follow. Intel aggressively committed resource to take advantage of network effects that exist for technology products. Commenting on the level of commitment Intel made, Grove stated, "We had to commit to supplying the entire needs of the industry… We made major commitments to production ramps, and we didn't hedge."
What threats has Intel faced in sustaining its...
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