Title: Sample
1Sample Presentation
2Who is Intel?
- Worlds largest producer of semiconductor
microprocessors - Tremendous growth under Andy Grove as CEO
- Craig Barrett became CEO in 1997
3Latest Annual Revenue
Intel Its Competitors
1, 3, 5, 10 yr. Growth in Revenues
4PC Components
-
- 84 market in PC processors
- 100 of profits
- 90 of revenues
- Growth in Processor
- market slowing Down
-
5Intel the Changing Landscape
- PC at the center of computing universe in
- the 90s
- Next decade INTERNET IS IT!
- Implications Old rules of Computerdom
- no longer hold
6Transition-Related Bumps
- 8 compound growth rate over the past two years
- Revenue growth slowed to 5 from 30 Blunders in
1999 - chipsets delivered months late
- embarrassing design bugs
- supply shortages
7PC Pothole
- Earnings declined for the 1st time in a decade
- Low Cost PCs
- Stock down 30
- and off its peak for
- most of 1998
- Industry Consolidation
8Changing PC Dynamics Intel
Intel Assumption Customers would clamor for
more power to run fatter software
programs Reality Customers wanted cheap
PCs to go online. Competitors grabbed 20 of
the market share in 1997 (highest in half a
decade) Previous Corporate Mission Leading
Purveyor of PC technology Existing Corporate
Mission Provide Building Blocks for the
Entire Net Economy
9The Creosote Bush
- Drips poisonous oil, kills everything around
it - Dominant microprocessor strategy was Intels
creosote bush - No other businesses could sprout around it
10Microprocessors
Intel at Crossroads, Again??
Business Goes To New Heights
Inflection Point
Valley of Death
Memory Chip Business
Business Declines
1985
11Internet appliances
Intel at Crossroads, Again??
Business Goes To New Heights
Inflection Point
Valley of Death
Microprocessors
Business Declines
1999
12Responses to Crisis
- Copy Exactly
- segment the microprocessor market
- reorganize
- Think big, broaden the pond,
- 10X Rule
13Objectives
- Growth Rate 15-20 a year
- New businesses to be No.1 or No. 2
- Grow faster than the industry
- Technology leader
- Profitable
14Copy Exactly
- Every plant is identical Down
- to the colors of paint
- easy to roll-out new
- production Techniques
- dramatic Boost in
- productivity Quality
15Segment the Microprocessor Market
- Celeron Inexpensive PCs
- Pentium III Middle Tier of Market
- Xeon High-Powered Servers and Workstations
Results Celeron market share Up from 30 to
62 60 gross margins Revenues from Xeon chips
to double
16Reorganize
Dismantled previous centralized management
structure Break Intel into five groups and
the managers of these groups report directly to
him
- Networking Chips
- Communication Products
- Computer Processors
- Information Appliances
- New Business
17Think Big, Broaden the Pond, 10X Rule
Seminars for top 400 Managers Day 1 Develop
and nurture an entrepreneurial spirit Day 2
Disruptive Technologies Day 3 Business
Ecosystems
18Develop and Nurture an Entrepreneurial Spirit
Thinking Green figure out how to grow new
businesses in the shadow of the creosote bush
OLD
NEW
19Disruptive Technologies
Cheap steel reinforcing bars (rebars) Dismissed
as insignificant by industry giants Rebar
companies nibbled their way into the market for
higher value steel
PCs and mainframes Japanese automakers and small
cars
20Digital Rebar
- Cheap PCs could nibble up the high end
computers - Aggressive Celeron marketing even at the
risk of cannibalizing sales of pricier chips - Intel Capital
- Opening of the minds
21Business Ecosystems
- Construct new webs of relationships
- Help seed emerging business ecologies
- Invested 6 billion to acquire companies
- Providing seed money of more than
- 1.2 billion
22Think Big, Broaden the Pond, 10X Rule
1. Intel Capital
- Launched in 1991
- To invest in companies that created
- waves of excitement
- To expose the company to every facet
- of the Internet economy
23Think Big, Broaden the Pond, 10X Rule
1a. Intel Capital
- Fund has increased from 300 million
- in 1997 to 1.2 billion in 1999
- Has stakes in more than 350 software
- and internet companies
- Notable hits Red Hat, Inktomi, eToys
- Holdings valued at more than 8.2 billion
- 327 million in pretax income
24Think Big, Broaden the Pond, 10X Rule
2. New Business Group
- New rules for funding new projects
- No more tight budgets
- No more rigorous reviews of
- internal startups
- Similar to venture-capital financing
- Launched about 25 seed projects
- Spent more than 50 million on these projects
252a. New Business Group
- Web-hosting for clients (Citigroup)
- Vivonic digital handheld health
- planner
- PassEdge technology for protecting
- digital content
- Installing 3,000 information terminals on the
back - of seats of Madison Square Garden
- Equip doctors with secure Ids to encourage
- online medicine
26Web War
New Competitors
Unfamiliar Territory
VS.
27Think Big, Broaden the Pond, 10X Rule
3. Information Appliances
Move Intel into the home, somehow Screen
phones E-mail terminals TV set-top boxes
28Think Big, Broaden the Pond, 10X Rule
4. Communication Products
- Home Networking
- Broadband Modems
- PC-based Telephony
- Server Appliances
- Ethernet Hubs
- Small Networking Switches
- Specialized Servers for Web Traffic
- and speeding up e-commerce
29Think Big, Broaden the Pond, 10X Rule
- Fastest growing category among chips
- Used in modems, network
- interface cards, switches,
- and routers
- Acquired a lot of companies
- Level One Communications
- (2.2 billion)
- NetBoost (215 million)
- Softcom Microsystems (149 million)
30The Future of Intel
- Many skeptics
- The creosote bush is no longer thriving at
Intel - Enormous potential for
- growth
- Moving in the Right Direction??