Am: a Customer Centric Approach to Innovation
AMD : A Customer-Centric Approach to Innovation
ISEG – ISM MBA Program
September 30, 2010
Professional Management Skills Assessment
Word Count: 2600
This case analyzes the strategy of AMD, a microprocessor manufacturer which is a direct competitor of another microprocessor company, Intel. Between the two companies the competition has never been really balanced because of Intel’s much more Important Size and budget. AMD has found itself in a bad shape several times but has always success in overcoming difficulties resulting from its far smaller market shares and – over the years – has built a strategy to survive and strengthen its position against its giant competitor Intel. What would it take for AMD to see significant increase in its market share in processors used in corporate desktops and notebooks? How can the success of Opteron in the server segment be leveraged to other segments?
It would take a lot for AMD to catch up with Intel as the gap in terms of market share between the two companies is huge. Except in very specialized niche markets, Intel has kept a significant leadership in every segments, including the server microprocessor market where AMD best performed. Still in the second quarter of 2010, the domination of Intel over the market was undeniable with 86.1% market share against 13.7% for AMD on the pc processor segment, 72.2% against 27.5% on the desktop microprocessor market and a 93.5% market share against 6.5% on the x 86 server microprocessor segment. (Michelle Maisto citing IDC, 2010). Moreover as mentioned by Ofek and Barley “Intel’s dominant market position could limit AMD’s ability to make inroads to key market segments beyond servers, such as corporate desktops and notebooks.”
In order to gain significant market share in processor used in corporate desktops and notebooks, AMD should, in my opinion, focus on differentiating its products by giving them an added value that would be valuable to end users. That’s what, so far,
ISEG – ISM MBA Program
September 30, 2010
Professional Management Skills Assessment
Word Count: 2600
This case analyzes the strategy of AMD, a microprocessor manufacturer which is a direct competitor of another microprocessor company, Intel. Between the two companies the competition has never been really balanced because of Intel’s much more Important Size and budget. AMD has found itself in a bad shape several times but has always success in overcoming difficulties resulting from its far smaller market shares and – over the years – has built a strategy to survive and strengthen its position against its giant competitor Intel. What would it take for AMD to see significant increase in its market share in processors used in corporate desktops and notebooks? How can the success of Opteron in the server segment be leveraged to other segments?
It would take a lot for AMD to catch up with Intel as the gap in terms of market share between the two companies is huge. Except in very specialized niche markets, Intel has kept a significant leadership in every segments, including the server microprocessor market where AMD best performed. Still in the second quarter of 2010, the domination of Intel over the market was undeniable with 86.1% market share against 13.7% for AMD on the pc processor segment, 72.2% against 27.5% on the desktop microprocessor market and a 93.5% market share against 6.5% on the x 86 server microprocessor segment. (Michelle Maisto citing IDC, 2010). Moreover as mentioned by Ofek and Barley “Intel’s dominant market position could limit AMD’s ability to make inroads to key market segments beyond servers, such as corporate desktops and notebooks.”
In order to gain significant market share in processor used in corporate desktops and notebooks, AMD should, in my opinion, focus on differentiating its products by giving them an added value that would be valuable to end users. That’s what, so far,
Bibliography: Maisto, Michel. "Intel, AMD Lead a Rejuvenated Chip Market: IDC - Desktops and Notebooks from EWeek." Technology News, Tech Product Reviews, Research and Enterprise Analysis - EWeek. 19 Aug. 2010. Web. 05 Oct. 2010. <http://www.eweek.com/c/a/Desktops-and-Notebooks/Intel-AMD-Lead-a-Rejuvenated-Chip-Market-IDC-848326/>. Ofek, Elie, and Lauren Barley. AMD: A Customer-centric Approach to Innovation. Working paper no. 9-507-037. (Boston): Harvard Business School UP, 2007. Print. Stokes, Jon. "Intel 's Big Strategy Shift and AMD 's Opportunity." Ars Technica. Ars Technica © 2010 Condé Nast Digital., June 2010. Web. 05 Oct. 2010. <http://arstechnica.com/business/news/2010/05/intels-big-strategy-shift-and-amds-opportunity.ars>.