Amd

Case - AMD in 2005

1) In which industry does AMD compete?

2) What are the dominant industry characteristics?

3) Apply Porter's Five Forces Model to the industry. Is this an attractive industry?

4) What factors are critical for success of AMD given the competitive environment - i.e., AMD's primary competitors, their strategies, capabilities, competencies, and competitive response profiles?

5) What do you see as the biggest problem or issue in this case?

Advances Micro Devices (AMD) is a global semiconductor company. It provides processing solutions for the computing, graphics and consumer electronic markets. The company designs and produces a range of microprocessors; and graphics and media solutions.

The industry is an environment where research and development costs are very high. It is recognized as a key driver for economic growth and is a technology enabler. It has continuous growth but in a cyclical pattern with high volatility. You need to be able to be flexible and with innovation to constantly adjust with the market. Many products have a very short life cycle.

Strengths Ð'-

Ð'* AMD is a strong player in microprocessors; it is the second largest player after Intel in the PC and server microprocessors.

Ð'* AMD has strong brands. It is one of the leading global providers of processing solutions for computing, graphics and consumer electronics markets.

Ð'* AMD has a broad product portfolio. It provides products and services through four business divisions: computation products, embedded products, graphics and chipsets, consumer electronics.

Weaknesses-

Ð'* Declining revenues in Japan for 2006 a decrease of 80.6% from 2005.

Ð'* AMD depends heavily on computation products which is 90.3% of its total revenues for 2006.

Ð'* AMD has recorded weak returns in recent years; its return on equity has declined to -1.3%