Essay Strategic Management

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Intel and Maxim – Strategic Scanning The semiconductor industry for the last few decades has been dominated by Intel with their advanced processors, marketing campaigns, and capitalizing on new markets and technology with their effective environmental scanning. Where as Maxim Integrated who has also been effective in turning a profit has mostly ran under the radar. The difference is the approach each company takes in the semiconductor industry, who they sell to, what they sell, and what type of company they are. As a vendor for both companies Intel is considered a strategic partner and our success is based on their success since they are our largest and most profitable customer. Maxim Integrated on the other hand is our smallest and least profitable customer, yet in the semiconductor industry over the last year their business approach and strategy is getting Intel’s attention. As mentioned in this weeks lecture, “there are tremendous obstacles to strategic innovation, and often the more successful a company already is, the more stubborn those obstacles get. After all, why risk what you have for the unknown? The answer is that the world is not standing still. Without a continuous process of strategic innovation, the Goliaths become very vulnerable to all the new David’s running around (Markides, 2000)”. Internally Intel and Maxim and two completely different companies yet their external environments are similar since they are both in the technology and semiconductor industry’s where everyone is trying to increase their processing power, decrease their power consumption, increase yield, and increase profits through gaining more market share. Previously Intel has been unchallenged in the semiconductor industry, dominating in both profits and technology. Today they still generate more profit and are far ahead with their technological advantage, yet they are struggling to find success in the mobile markets which is where industry experts the majority of sales to be in the future. Intel’s problem is how they approached the questions about who, what, and how they would continue to compete. Intel is a technology leader, always on the edge of the industry and invests heavily in research and development that used to guarantee their success. Today however, the who, what and how have changed. It used to be that customers in the semiconductor industry wanted the fastest processor, the most memory, and the smallest chip. Although this remains true today, it has emerged to also include increased battery life, low heat output, and cheap prices. This is where Intel failed in their external environmental scanning. Internally Intel has continued to meet their goals through reengineering, restructuring, inproving quality control, making process improvements, and a significant investment in research and development. However, even though they have the best chips on the market they failed externally by not recognizing the shift in the consumer markets away from high powered PC’s, massive computer servers, and even laptops are declining steadily. Before this shift, and the introduction of tablet computers and smart phones, Intel was where the money was. Lower end processors and older generation products were not nearly as profitable, which was the market that Maxim was selling to. Intel is different from their competition in the products they manufacture, yet they are loosing customers to sell them too. So where as before they were the industry giant and every company almost had to come to them for their processors if they wanted what was considered a quality product, this was their competitive advantage, their brand name. Once Intel came to grips with the reality of the situation they tried to break into the mobile chip market but failed, not because their chips weren’t better, but because they were so good, they consumed too much power and generated too much
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