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Title: Sample


1
Sample Presentation
2
Who is Intel?
  • Worlds largest producer of semiconductor
    microprocessors
  • Tremendous growth under Andy Grove as CEO
  • Craig Barrett became CEO in 1997

3
Latest Annual Revenue
Intel Its Competitors
1, 3, 5, 10 yr. Growth in Revenues
4
PC Components
  • 84 market in PC processors
  • 100 of profits
  • 90 of revenues
  • Growth in Processor
  • market slowing Down

5
Intel 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

6
Transition-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

7
PC 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

8
Changing 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
9
The Creosote Bush
  • Drips poisonous oil, kills everything around
    it
  • Dominant microprocessor strategy was Intels
    creosote bush
  • No other businesses could sprout around it

10
Microprocessors
Intel at Crossroads, Again??
Business Goes To New Heights
Inflection Point
Valley of Death
Memory Chip Business
Business Declines
1985
11
Internet appliances
Intel at Crossroads, Again??
Business Goes To New Heights
Inflection Point
Valley of Death
Microprocessors
Business Declines
1999
12
Responses to Crisis
  • Copy Exactly
  • segment the microprocessor market
  • reorganize
  • Think big, broaden the pond,
  • 10X Rule

13
Objectives
  • Growth Rate 15-20 a year
  • New businesses to be No.1 or No. 2
  • Grow faster than the industry
  • Technology leader
  • Profitable

14
Copy Exactly
  • Every plant is identical Down
  • to the colors of paint
  • easy to roll-out new
  • production Techniques
  • dramatic Boost in
  • productivity Quality

15
Segment 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
16
Reorganize
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

17
Think 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
18
Develop and Nurture an Entrepreneurial Spirit
Thinking Green figure out how to grow new
businesses in the shadow of the creosote bush
OLD
NEW
19
Disruptive 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
20
Digital 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

21
Business 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

22
Think 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

23
Think 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

24
Think 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

25
2a. 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

26
Web War
New Competitors
Unfamiliar Territory
VS.
27
Think Big, Broaden the Pond, 10X Rule
3. Information Appliances
Move Intel into the home, somehow Screen
phones E-mail terminals TV set-top boxes

28
Think 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

29
Think Big, Broaden the Pond, 10X Rule
  • Networking Chips
  • 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)

30
The Future of Intel
  • Many skeptics
  • The creosote bush is no longer thriving at
    Intel
  • Enormous potential for
  • growth
  • Moving in the Right Direction??
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