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CASE : INTEL STRATEGY TAKES A CHANCE
Andy Grove is taking a big risk. The CEO of Intel, maker of microprocessor chips, is basing his business strategy on an assumption. Grove guesses that AT&T, IBM, Matsushita, Motorola, Philips, Sega, and Sony can`t keep up with his firm. He`s sure enough that he`s gambling nearly a third of Intel`s revenues, $3-5 billion in 1994, that the company will dominate a slew of, businesses in which it has no experience.
Such aggressiveness has worked in the past. The so-called "Mad Hungariarf poured money into product development and factories to establish the Santa Clara, California, company as the hardware companion of Bill Gates`s software champ. Microsoft. Today, Intel supplies the, microprocessors in about three-quarters of all PCs sold. Its gross profit margin is 58 percent; net earnings last year were $2-3 billion on sales of $8-8 billion, making Intel the most profitable company of its size in the world. Its size is fluid, however; Intel is growing so fast, it doubles in size roughly every two years.
So, Grove might ask, what is the risk in his gamble `?
The firm faces growing competition from other chip makers, notably the RISC chip, an inexpensive, ultra fast microprocessor developed by IBM, Motorola, and Apple Computer and featured in Apple`s PowerPC series. Also clone makers have scored a crucial victory in a lawsuit affirming their right to copy Intel codes governing the behavior of microprocessors.
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Questions :
1. What is Grove`s vision for Intel ? What is Intel`s mission ?
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2. How effectively do Intel`s organizations objectives define and fulfill its mission ?
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3. What is the purpose of the fortune cookie slips ?
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4. How well do Grove`s objectives for Intel Contribute to the objective of Profitability ?
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