Tetra Threat Framework

Sunil 36 - Marketing

Krishna 34 -Marketing

Pallavi 55 - Marketing

Pranav 56 - Operations

Group Members

Slide 1

About Intel

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

Slide 2

Tetra Threat Framework

Added Value

Appropriate Value

Response to Threat of

Imitation

Response to Threat

of Substitutio

n

Response to Threat of Hold up

Response to Threat of

Slack

Slide 3

Response to Threat of Imitation

When producing DRAM it tried to get to economies of scales by its capacity power and also by licensing and contracts to other people for producing DRAM for mass market.

When Intel started with project CRUSH, it introduced more than 2000 designs for the customers which shows its scope economies strategy for reducing threat to imitation

When AMD and Cyrix imitated Intel’s microprocessor. Intel responded with intellectual property protection

It also launched Intel Inside campaign

As there was increase in market size, there was a shift toward Cyrix and AMD – Intel increase the capacity of microprocessor and produced even cheaper microprocessor

As the product life cycle of microprocessor was shrinking – Intel believed in continuous up gradation and innovation, which helped the company to charge higher price and generate profits in the early life cycle of the new product

Intel was the largest purchaser of semiconductor, so to achieve standardization; it relied on best in breed sole supplier and tried to maintain healthy relationship because of high dependency

Also they tried to maintain a good relationship with its complementors i.e Microsoft- Due to which the end consumer of its product found it difficult to switch over, creating high switching cost for its product

Slide 4

Response to Threat of Substitution

During 1980s the pace at which Japanese firm producing new products with better capacity and higher volume gave them cost advantage. They also invested heavily in new plant and equipment as compared to Intel , which did not respond to this pace of Japanese firm and finally had to lose significant market share

Initially Intel was reluctant to exit memory business even after declining revenue from this business. It continued with both microprocessor and DRAM - Only after independence shown by middle management that it switched entirely to microprocessor technology

When Microsoft moved to operating system that was not tied to x86 architecture, Intel responded by backing operating software other than windows, like Linux

Slide 5

Response to Threat of Hold-Up

Contracting – Intel tried to enter in the market with scale economies due to which it had many contracts with its suppliers to provide the parts to mass production

When buyers were more inclined towards RISC architecture, Intel hedged against adoption of RISC by releasing i-860. It tried to reduce bargaining power through ‘Intel Inside’ campaign, which made the industry dependent upon CISC architecture

It also decreased the bargaining power of buyer by building a motherboard through forward integration, and sold to number of OEMs, including Dell, HP, Gateway, and Zeos

Intel also reduced the bargaining power of suppliers by not only focusing on long term contract but also on standard solution, rather than custom solution

Intel also tried to build trust and relationship with all complementors and supplier, i.e whole value chain. All the complementors were quite dependent on the other for their product