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Intel Microprocessors Case Study-Solution: Response To Threat of Imitation

The document discusses Intel's strategy for sustaining its competitive advantage in microprocessors using the tetra threat framework. The four threats are imitation, substitution, hold-up, and slack. To address imitation, Intel maintained strong relationships with complementors like Microsoft, frequently upgraded products, and pursued economies of scale. For hold-up, Intel entered long-term contracts with suppliers and cultivated trust with partners. To reduce substitution threats, Intel charged high initial prices on new products and competed aggressively with rivals.

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100 views2 pages

Intel Microprocessors Case Study-Solution: Response To Threat of Imitation

The document discusses Intel's strategy for sustaining its competitive advantage in microprocessors using the tetra threat framework. The four threats are imitation, substitution, hold-up, and slack. To address imitation, Intel maintained strong relationships with complementors like Microsoft, frequently upgraded products, and pursued economies of scale. For hold-up, Intel entered long-term contracts with suppliers and cultivated trust with partners. To reduce substitution threats, Intel charged high initial prices on new products and competed aggressively with rivals.

Uploaded by

saherhcc4686
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INTEL MICROPROCESSORS CASE STUDY-Solution

 Apply the tetra threat framework in analyzing Intel’s strategy to sustain


competitive advantage in microprocessors.
 Intel, the world leader in silicon innovation, develops technologies, products,
and initiatives to continually advance how people work and live. Founded in
1968 to build semiconductor memory products, Intel introduced the world's
first microprocessor in 1971.
 We are now using tetra threat framework to show how Intel sustain competitive
advantage in microprocessors The various threats are-
o Threat of Imitation
o Threat of Substitution
o Threat of Hold up
o Threat of Slack.
 Added Value Appropriated value Response to Threat of Imitation Response to
Threat of Substitution Response to Threat of Hold up Response to Threat of Slack
Tetra-Threat Framework 
 
RESPONSE TO THREAT OF IMITATION:
1. Maintained strong relationship with its complementary like Microsoft
which helped them to provide the customers best service which prevented
customer’s from switching to another company.
2. From time to time it kept on upgrading its product with next generation
microprocessors which made it difficult to copy.
3. It started project CRUSH and introduced more than 2000 designs for the
customers which show its scope economies strategy for reducing threat to
imitation
4. High switching cost. It allowed dual sources of critical pieces of production
equipment.
5. Its major competitor was AMD and Intel does not patent its processors. The
reason was it helped them to improve the performance from time to time
as the processors become obsolete after some time.
 
RESPONSE TO HOLD-UP:
1. It is a threat to the appropriation or capture of sustainable added value that
is often rooted in resource of co specialization
2. Intel entered in market by having contracts with the suppliers for mass
production of parts. Thus it hold-up its suppliers.
3. It has made a strong trust relationship with its complementors and
suppliers.
4. The processors which it made were used so commonly that the
complementary products were valued very high along with this.

5. Intel started its Intel Inside decreased the threats of Hold up as the demand
of this product increases in the market and complementors were forced to
use this product.
6. Complementors and suppliers are highly dependent on Intel’s product.
 
RESPONSE TO THREAT OF SUBSTITUTION:
1. It is an indirect to sustainability. These are even harder to address than
threats of imitation
2. The life of the microprocessor became very short so they charged a heavy
price for the new products initially and then reduced the price.
3. After the evolution of internet, competitor’s complementors also became
the complementors of Intel due to their production of unique products.
4. It always tried hard to fight strongly with its competitors.
5. It reduced the number of chips to be produced by licensing companies
which reduced the threat of substitution and also increased their revenue
from 30% to 75%.
6. It perform short term straddling by strongly competed with Motorola in
RISC keeping its CISC microprocessors

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