Amd In 2005, Coming Out Of Intel'S Shadow

Background: AMD and Intel have remarkable differences in development, production, and marketing strategies. The price war between Intel and AMD has intensified and battle for market share dominance continues. AMD identified and exploited the weaknesses in Intel's strategy.

Issue: The discrepancy between the organizational strategies of two intense competitors in a single market. Intel was the strongest performer in the microchip market however; it made the mistake of assuming that its market dominance meant that its continued control of the market was assured. Intel further assumed that its strategic partnerships with other industry leaders in technology would sustain and even strengthen their grasp on the market. Because of this Intel was vulnerable to AMD's increasingly aggressive tactics to match and outperform Intel.

AMD Strategy: It is my opinion that AMD implemented a Differentiation Strategy against Intel to capture a larger share of the marketplace that Intel had been dominating. AMD did this by approaching the same partners Intel had cultivated and promised them a better product, AMD succeeded in stealing away at least a portion of the market, and a valuable one. From a R&D perspective, AMD recognized that Intel's next generation of microchip processors demanded too much of the consumer, whose software had to be rewritten, and they worked on circumventing the problem in their own product. This Focused Differentiation Strategy was successful in bringing AMD closer to Intel's position in the market. Perhaps AMD did not forecast appropriately or think about how to manage exponential growth. As a result, the gains it enjoyed in the late 90s and the first half of the present decade began to falter by 2005.

The competitive positioning of the Opteron chip by AMD represents a business-unit level Differentiation Startegy. AMD had to prove, especially to companies that were previously partnered with Intel,