Intel Tetra Framework

Analysis
Umang Patel 129
Rohan Pradhan 131
Sagar Shah 145
Nilesh Vaghela 155
Introduction
Intel was formed in 1968 by Robert Noyce and Gordon Moore, both of
whom were senior executives at Fairchild Semiconductors.
From Intel's beginning in 1968, the company strategy was to "push the
envelope of product design and to be the first to market with the newest
devices."
By 1973, the company had the world's best selling semiconductor product
(1103 DRAM chip).
For the most part, Intel's success had been due to its microprocessors.

Intels Microprocessor marketshare
Tetra Threat Framework
HOLDUP SLACK
SUBSTITUTION IMITATION
ADDED VALUE
VALUE APPROPRIATED
Threats
The various threats are

1. Threat of Imitation
2. Threat of Substitution
3. Threat of Hold up
4. Threat of Slack.
Threat of Imitation:

By early 1990s Intel faced credible threats from a number of rivals including
AMD
Texas Instruments and
Cyrix
which could produce microprocessors compatible with Microsofts MS-DOS Operating System.
Intels Actions:
Intellectual Property Protection (IPP) - Intel was able to litigate against competitors like AMD by protecting their
microprocessor code with patents.
Intel Inside campaign
The campaign was a result of Intel's desire for the end-users ability to differentiate Intel's microprocessors. It was
designed to create brand recognition among the PC users.
Maintained strong relationship with its complementors like Microsoft which helped them to provide the
customers best service which prevented customers from switching to another company.
From time to time it kept on upgrading its product with next generation microprocessors which made it difficult
to copy.
It started project CRUSH and introduced more than 2000 designs for the customers which show its scope
economies strategy for reducing threat to imitation
High switching cost. It allowed dual sources of critical pieces of production equipment.


Threat of Holdup
It is a threat to the appropriation or capture of sustainable added value that
is often rooted in resource of co specialization
Intel entered in market by having contracts with the suppliers for mass
production of parts. Thus it hold-up its suppliers.
It has made a strong trust relationship with its complementors and suppliers.
The processors which it made were used so commonly that the
complementary products were valued very high along with this.
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.
Complementors and suppliers are highly dependent on Intels product.

Threat of Substitution
Threats
The RISC threat, introduction of alternate architectures. In 1989, when Intel
launched its 4
th
generation microprocessor it faced a potential competitive
threat from alternate RISC architecture. Intel used CISC. RISC was having
speed and cost advantages over CISC.
IBM decided not to sell any 386 based computers until it could develop a
new architecture that used IBMs own proprietary components.
Microsoft moved towards operating systems that were not tied to the
x86 architecture (Windows NT, CE). This allowed Microsoft to extract more
of the total surplus generated.
Sun Microsystems motto, "The Network is the Computer."

Intels Actions
Intel hedged against the adoption of the RISC architecture by releasing the
i-860. At the same time, they developed the technology for the Pentium.
Intel found a new customer in Compaq.
Intel backed operating systems other than Windows. Microprocessors for
Linux - Red Hat
Partnered with OEMs through programs like Intel Inside to promote not
only the microprocessor, but the PC as well. Hedged by getting into servers
like the 32-bit Xeon processor in 1998.