Pannasastra University of Cambodia

Contents
I.
II.
III.

IV.
V.

Intels background
Intels CEOs
Leadership and Management Style Visionary
Visionary
Paranoia in Business
Compete Patiently
Think Out of the Box
Truth-Telling
The Weaknesses of Intel & Recommendations
Bibliography

Intel Corporation
I.

Intels background

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Intel Corporation is an American multinational corporation headquartered in Santa Clara,

California. Intel Corporation is one of the world largest and highest valued semiconductor chip makers,
based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most
personal computers.
On July 18, 1968 Intel Corporation was founded by semiconductor pioneers Robert
Noyce and Gordon Moore and widely associated with the executive leadership and vision of Andrew
Grove, Intel combines advanced chip design capability with a leading-edge manufacturing
capability. Intel
circuits, flash

also

makes motherboard chipsets, network

memory, graphic

chips, embedded

interface

processors and

controllers and integrated

other

devices

related

to

communications and computing though Intel was originally known primarily to engineers and
technologists, its "Intel Inside" advertising campaign of the 1990s made it a household name, along with
its Pentium processors, and it is also a portmanteau of Integrated Electronics as the fact that Intel is the
term for intelligence information also made the name appropriate.
Intel was an early developer of SRAM and DRAM memory chips, and this represented the
majority of its business until 1981. In 1981 the American computer manufacturer International Business
Machines (IBM) chose Intels 16-bit 8088 to be the CPU in its first mass-produced personal
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computer (PC). Intel also provided its microprocessors to other manufacturers that were compatible with
IBMs product.
Although Intel created the world's first commercial microprocessor chip in 1971, it was not until
the success of the personal computer (PC) that this became its primary business. During the 1990s, Intel
invested heavily in new microprocessor designs fostering the rapid growth of the computer industry.
Intel has also begun research into electrical transmission and generation. Intel has recently introduced a
3-D transistor that improves performance and energy efficiency. Intel has begun mass-producing this 3D transistor, named the Tri-Gate transistor, with their 22 nm process, which is currently used in their 3rd
generation core processors initially released on April 29, 2012.
II.

Intels CEOs

According to the research, since Intel was founded on July 18, 1968, there were only three
people have led Intel Corporation. The first two CEOs were company founders and the third was a
participant from day one. The first one is Robert Noyce who is the founder of Intel in 1968. He was
known as the Major of Silicon Valley, Younger entrepreneurs in Silicon Valley. He went off and did
something wonderful mantra still graces the walls of Intel facilities today. And he also held 16
semiconductor-related patents and was awarded the National Medal of Science in 1979 and the National
Medal of Technology in 1987. Robert Noyce died in 1990, served as Intel CEO from 1968 to 1975. After
then Gordon Moore, the founder of Intel became the second CEO from 1975 to 1987. And he is also the
author of Moores Law the guiding principle of the semiconductor industry for 40-plus years and
counting. Moore was born in San Francisco in 1929 and he earned a bachelors degree in chemistry from
UC Berkeley and a Ph.D. in physics and chemistry from Cal Tech. He completed post-doctoral work at
Johns Hopkins University Applied Physics Laboratory before joining Shockley Labs in 1956 where he

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met Robert Noyce. He was awarded the National Medal of Technology in 1990 and in 2002 the Medal
of Freedom, the nations highest civilian honor. The third CEO is Andy Grove, Intel CEO from 1987 to
1998 that was a participant from the beginning of Intels co-founder with Robert Noyce and Gordon
Moore. On Groves visionary, Intel became one of the most valuable companies in the world. Its stock
price rose 31.6 percent a year and revenues grew from $1.9 billion to $25.1 billion. Most of the
companys revenues were reinvested in research, development and building new manufacturing
facilities. Grove, who worked in a cubicle similar to other employees, was known for a management
style that encouraged innovation, risk taking and open communication. His mantra, only the paranoid
survive became the title of a best-selling management book he authored. After Andy Grove retired,
Craig Barrett became fourth CEO from 1998-2005. Craig Barrett joined Intel in 1974 and built his
reputation in the companys core semiconductor manufacturing business. In the 1980s he led the
implementation of the companys strategy that called for engineers to first perfect a manufacturing
process in one fabrication plant and then duplicate it in other factories, thereby avoiding inconsistencies
or costly flaws in the production process. Intel continues to use the philosophy in its factories today.
Barrett became CEO during a period of rapid growth and exuberance across the tech industry, when the
Internet was beginning to usher in massive changes in e-commerce and consumer behavior. Networks
and networking loomed large, and Intel acquired several companies to grow its business at an
unprecedented pace while also moving into PC peripherals and even data hosting. With the dot-com
collapse, some of those acquisitions soured, but Barrett continued investing heavily in manufacturing
and process technology during the downturn. And then On May 18, 2005, Barrett handed the reins of the
company over to Paul Otellini, who previously was the company president and COO and who was
responsible for Intel's design win in the original IBM PC. The board of directors elected Otellini as
President and CEO, and Barrett replaced Grove as Chairman of the Board. Grove stepped down as

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chairman, but is retained as a special adviser. In November 2012, president and CEO Paul Otellini
announced that he would step down in May 2013 at the age of 62, three years before the company's
mandatory retirement age. During that time financial results revealed that the Intel's revenue increased
by 55.8 percent (US$34.2 to 53.3 billion), while Intels net income increased by 46.7% from US$7.5
billion to 11 billion. On May 2, 2013, Executive Vice President and COO Brian Krzanich was elected as
Intel's sixth CEO, a selection became effective on May 16, 2013 at the company's annual meeting.
Reportedly, the board concluded that an insider could proceed with the role and exert an impact more
quickly, without the need to learn Intel's processes, and Krzanich was selected on such a basis.
III.

Leadership and Management Style

Visionary

Since the 1960s, Grove has repeatedly made fundamental contributions to semiconductor devices
and technology. His early research helped create stable MOS devices, and improved the reliability of all
silicon semiconductor devices, which touched off the explosion of the MOS-based IC industry.
Throughout that industry's dramatic growth, Grove has demonstrated uncommon leadership and
vision, especially in his many roles at the helm of the Intel Corporation. His responsibilities have ranged
from overseeing technology and product development to steering Intel deftly into new areas, making it
one of the largest and most successful businesses in the world. He is recognized worldwide as an expert
of both technology and management.
Grove has written over 40 technical papers and holds several patents on semiconductor devices
and technology. His four books have all been very well received, and his 1967 Physics and Technology
of Semiconductor Devices are considered the seminal work in the field.

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Grove has lectured at universities all over the world, and has been a featured speaker at virtually
every major electronics conference. For six years he taught a course in semiconductor device physics at
the University of California, Berkeley, and he lectures currently at the Stanford University Graduate
School of Business.
Paranoia in Business

Grove makes a strong case for the value of paranoia in business: "Business success contains the
seeds of its own destruction. The more successful you are, the more people want a chunk of your
business and then another chunk and then another until there is nothing left. I believe that the prime
responsibility of a manager is to guard constantly against other people's attacks and to inculcate this
guardian attitude in the people under his or her management."
He's not referring just to top execs, but to middle managers as well. In the revised edition
of High Output Management, he stresses: "Middle managers are the muscle and bone of every sizable
organization, no matter how loose or 'flattened' the hierarchy, but they are largely ignored despite their
immense importance to our society and economy." He urges middle managers to think like CEOs and
not wait for the principles and practices they find appealing to be imposed from the top.
Grove also acknowledges the importance of another group -- professionals who may not hold
supervisory positions but "who, even without strict organizational authority, affect and influence the
work of others. These know-how managers are sources of knowledge, skills, and understanding to
people around them in an organization." And they, too, play key roles in guarding against competitive
assaults.

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Creating a culture in which innovation flourishes is also an important challenge for managers at
all levels. As CEO, one way that Grove does this is by encouraging experimentation -- and doing it
before a strategic inflection point arrives, so that much of the spadework has been done to develop
alternative products and strategies. (In fact, Intel researchers and operations managers had made
significant strides in the microprocessor field well before the company made the critical strategic
decision in the mid-1980s to shift its emphasis from producing memory chips to producing
microprocessors.)
But when he talks about encouraging experimentation, Grove quickly points out that he means
more than technological experimentation. "I am sufficiently removed from the real-life technology and
technological innovation today that I don't think I have much influence on that anymore," he tells IW. "I
think the experimentation that I am in a position to influence is business innovation -- trying to introduce
certain products for which there is no market [yet], or trying to determine the market's reaction to a
product."
One chapter of Only the Paranoid Survive is entitled, "Let Chaos Reign." In it, Grove urges
senior executives to loosen up their control of the organization and allow people to experiment with new
techniques, new products, new sales channels, and new customers. "The old order," he stresses, "won't
give way to the new without a phase of experimentation and chaos in between. . . . The dilemma is that
you can't suddenly start experimenting when you realize you're in trouble unless you've been
experimenting all along. It's too late to do it once things have changed in your core business."
In his interview with IW, he stressed that his comments about permitting "chaos" were primarily
directed to the difficult transition periods associated with major strategic change. "At times of
uncertainty -- during times of change -- the managerial tendency will be to pull in the reins tighter, to
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take control. But at times like that, the manager will know less about what he needs to know than at
other times, because things are changing too fast. . . . You have to overcome the tendency to think,
'Things are changing too fast; let me pull everything in.' In reality, when things start moving too fast,
you should let go of things -- but carefully watch what the hell is going on."
During more normal times, some chaos and experimentation are necessary -- to allow room for
"accidental discovery," he notes. But once a company has traversed a major transitional period -- Grove
refers to it as the "valley of death" -- the level of chaos must be reduced in order to provide "clarity of
direction."
"You only get out of the valley of death," he says in his book, "by outrunning the people who are
after you. And you can only outrun them if you commit yourself to a particular direction and go as fast
as you can. . . . Hedging is expensive and dilutes commitment. Without exquisite focus, the resources
and energy of the organization will be spread a mile wide -- and they will be an inch deep."
Compete Patiently

As Intels brand is internationally recognized, many people wonder whether it might face
pressure from antitrust regulators. In many ways, its market dominance is the same as another IT giant
that had prospered with the proliferation of personal computers, Microsoft. To be sure, from time to time
Intel did face antitrust inquiries, but these never assumed the enormous proportions faced by Microsoft.
Grove was aware of this potential danger. When the company was planning to introduce the 386
microprocessor, the executives in Intels legal department say to him that Intel might potentially be
heading into a monopoly situation. Grove and his colleagues had two examples before them of the
consequences of antitrust actions. The first example was AT&T, and this was two or three years after the

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modified final judgment that close the company. The second was IBM, which had been in litigation
forever. Grove decided the way Intel would approach the issue was not pushing it to the line. That meant
that even though they may be in trouble, they could avoid going down the AT&T path. Andy Grove
knew that one reason why Microsoft in 2004 faced antitrust problems in Europe was because of its
decision to bundle software for audio and video formats with its Windows operating system. Intel,
however, under Groves direction, resisted going down that path. We left a lot of money on the table,
Grove says. Generally, we are very conservative in our business philosophy. We never push it to that
last ounce. That philosophy continues.
Groves guarded approach to the antitrust issue explains in part why Intel, while it was blasted in
the media during the Pentium crisis, still has generally not faced the kind of hostility that has hounded
Microsoft. It also says a lot about Groves attitude toward managing risk. I am a very cautious risk
taker, Grove says. And I mitigate. I push, but I mitigate the risk by over-preparation. Push, but
mitigate. Its like trust, but verify. I am comfortable with risks that I am prepared for. Andy grove
believed that patience and carefulness are keys to build a sustainable Intel in the very competitive
market.
Think Out of the Box

During his period, Andy Grove has achieved a lot of things throw out the difficulty and drastic
change. He understands the necessity of the creating enterprise that was strong enough and resilient
enough to be able to recover after the downturns of the company. His perspective is that only the
paranoid survive. He explained that "Success breeds complacency. Complacency breeds failure
Also, Andy Grove is the thought leader who can outthink and outsmart with the competitors
through his persistent and innovative ideas. He looks at problem from different angles to solve the
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problem in the company. In the early 1980s, Intel meet a serious problem what they call Intel gets
beaten at its own game because of new competitor, Japanese, can produce the chips that were not only
superior in quality, but also lower in cost. The company was losing money hand over fist as demand for
Intels memory chips was in free fall. Andy Grove discusses with his coworker and asks him that If we
got kicked out and the board brought in a new CEO, what do you think he would do? The problem put
a lot pressure on Grove, but he never give up. He is the thought leader that can thing out of the box.
Finally, Grove made hardest decisions to change his main business from memory chips to the
microprocessor. He put much of the resources into a new technology: microprocessors. He thought that
memory chips just only stored memory but microprocessors were the thinking part of a computer which
is the part that actually performed calculations.
Truth-Telling

In 1994, when Intel faced with the biggest challenge at that time called The Pentium Flaw
Debacle which according to Grove, the design error caused a rounding error in division once every
nine billion times. This meant that an average spreadsheet user would run into the problem only once
every 27,000 years of spreadsheet use. At that time, starting from online discussion through media like
CNN, and spreading to other publication in U.S including The New Times also mentioned about this
matter, Grove took into action by set the record straight. He wrote a memo and posted it on the internet,
identifying himself as the CEO of Intel, and pointing out that while the floating-point unit did have an
error. Conversely, much to his amazement, not only did people pooh-pooh his argument about the
Pentium flaw, but they also did not believe that he had written it.
IV.

The Weaknesses of Intel & Recommendations

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Although Intel has shown their solid strengths in modern technologies industry, it still left out some
weaknesses behind including internal and external ones. Among those, Competition has been one of the
threats that made some impacts in Intel business. To be considered as the leader of the industry, Intel has
faced a never-ending battle of other competitors trying to take its spot at the top. Competition is only
going to get fiercer especially in the microprocessor market. In the memory market, companies like
Samsung have overtaken Intel in some product categories like flash memory. For this point, some
researchers have made a similar Recommendation: Since AMD has no longer played catch-up to Intel.
Instead with the release of the 64-bit processor, AMD has put Intel in a defensive position. The future of
Intel depends on how it reacts to these challenges. Besides this, Instability of the Industry has also been
countered as another weakness for Intel group. Having known that the PC industry overall is very
cyclical. The general shape of the economy dictates demand for PC components. An unexpected
recession could have extremely negative effects on Intel if the company does not position itself well. To
response to this point, one of the potential Recommendations states that: Intel need to strengthen their
position stability in the globe market especially be prepared for the next unexpected recession.
Moreover, Loss of Focus has been seen as a concern points for the management team. As Intel tries to
expand its customer base by venturing into other products like wireless chipsets and communications, it
is important for the company to remain focused. Most of Intels revenue still comes from microprocessor
and motherboard products. However, related Recommendation is also raised up for feedback by saying
that the company must avoid overextending itself over too many products markets. Furthermore, another
bad image behind the success of Intel, Downside trends of PC sales is functionally pointed as a failure of
this microprocessor company. It has been illustrated that Intel's major weakness is shortcoming trends of
PC sales in the recent years and this weakness is irreparable. The company expects that PC shipments
will decline slightly in 2014. But, we still have a suitable Recommendation regarding to this

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downstream point by: To reduce the impact of the slowdown in the PC market, Intel needs to enter and
expand into adjacent market segments, such as smart-phones and tablets. However, the success into new
markets depends upon several factors, such as the introduction of new products, distribution and
marketing strategies, and competition. The company can only succeed in new markets by differentiating
itself in technology and cost. In addition to the previous bad impacts of Intel, Underutilized capacity also
affects the productive chain in this industry. Due to the declining PC sales, the company has not been
manufacturing much as in the past, and it has left them with a lot of capacity that is wasted spaced. One
considerably Recommendation from outside sources state that Intel has to invest for the large amount of
fixed cost that could be split up among more products if they had been manufacturing more products. If
they had done this, they could have improved the bottom line and been a more profitable company.
Then, Lack of directive strategic plans is also an unbelievable factor that people never thought that
would have happened in this well-known company. There is still a lack of directive strategic plans in
company where employees make their own strategies to work, which do not always bear successful
results. Thus, another suggested Recommendation is: Besides strategic plans, technical problems
occasionally have found within the products launched, so they need more careful consideration in
processing the supply chain because it can weakly derive the customers acceptance. The last but not
lease fragile thing in Intel Corporation is the gap between the working life and social life. It has been
said that there is lot of workload and burdens on the employees so they could not poise work life
simultaneously with social life. Moreover, the management also prefers those who do a lot of work
rather than those who are creative and competent. After all, there are some issues which can be stated as
Intel weaknesses as follows:
1. Intel sometime used divisive strategies in defense of its market position against its competitors.
2. After year 2000, Intels leading position in its core business was greatly lessened.

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3. By the end of the 2006, Intel proclaimed a reform that resulted in the dismissal of 10,500
employees or near 10 percent of its labor force by July 2006.
4. The company faced decreasing revenue in financial year 2008.
5. Intel has not achieved economies of scale and economies of scope throughout the long history.
6. Retail prices are higher as compared to the prices of competitors.
V.
Bibliography
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2014, from http://en.wikipedia.org/w/index.php?title=Andrew_Grove&oldid=629150282
Essays, UK. (November 2013). Company Analysis Of Intel Marketing Essay. Retrieved from
http://www.ukessays.com/essays/marketing/company-analysis-of-intel-marketing-essay.php?
cref=1
Hell, M. (2013, November 6). Intel corporation. Retrieved from
http://www.britannica.com/EBchecked/topic/289747/Intel-Corporation
IEEE Honors Ceremony Brochure. (2000). IEEE computer society awards: Andrew S. Grove1997
Computer Entrepreneur Award Recipient. Retrieved from
http://www.computer.org/portal/web/awards/grove
Intel. (2014, October 27). In Wikipedia, The Free Encyclopedia. Retrieved from
http://en.wikipedia.org/w/index.php?title=Intel&oldid=631287406
Intel Free Press Tech News. (2013, March 20). Intel CEOs: A look back. Retrieved from
http://krypton.mnsu.edu/~uw9842qe/sciviol1.html
Pandya, M., Brown, J., Junnarkar, S., Shell, R., & Warner, S. (2004, December 10).
Best of the best: inside Andy Grove's leadership at intel. Retrieved from
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Clara Valley Historical Association. (2008) Intel corporation.

http://teachinghistory.org/history-content/beyond-the-textbook/25484

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Sheridan, H.J., (1997). 1997 Technology leader of the year: Andy Grove building an information age
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Grove created a culture within Intel that allowed innovation to flourish. As CEO, he wanted his managers to
always encourage experimentation and prepare for changes, making a case for the value of
paranoia in business. He became known for his guiding motto: "Only the paranoid survive," and
wrote a management book with the same title.[12]According to Grove, "Business success contains the
seeds of its own destruction,"[9] explaining that "Success breeds complacency. Complacency breeds
failure. Only the paranoid survive."[12] As a result, he urges senior executives to allow people to test

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new techniques, new products, new sales channels, and new customers, to be ready for unexpected
shifts in business or technology.[9] Biographer Jeremy Byman observes that Grove "was the one
person at Intel who refused to let the company rest on its laurels."[13] Grove explains his reasoning:

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