Assignment: 03

MN4050: Technology Management & Application

Name: Index No: Field:

N. M. Ellawala 070120F ENTC

Date of Sub: 21st Dec 2010

Table of Contents
Introduction ................................................................................................................................................... 3

(b) The Generic Business Level Strategy the Intel Corporation has adopted ............................................... 5

(c) The Aligning of Technology Strategy to support the Business Strategy identified in part (b) ............... 6

(d) Knowledge Management and Intellectual Property Right practices used in the Intel Corporation ........ 7

(e) Suggestions /Recommendations for Improvement in Management of Technology.............................. 10

References ................................................................................................................................................... 11

Introduction
I have chosen Intel Corporation, which is an American global technology company, to analyze the technology management aspect of that company for this report. It is the largest semiconductor chip maker in the world and it has also invented many related product including the x86 series of microprocessors, which are used in most of the personal computers nowadays. This company was founded on July 18, 1968 and has come through a successful path as an innovative company. Today this company also makes graphic chips, motherboard chipsets, embedded processors, network interface controllers, integrated circuits, flash memory and other devices related to communications and computing.

(a) The Characteristics of an Innovative Organization Presence in Intel Corporation

Innovation is the development of new idea as commercially useful product, service or production process. Organizations need to be innovative to gain sustainable competitive advantage over its competitors. In that context, Intel Corporation is one organization that has achieved that advantage successfully. As I mention before Intel Corporation is being an innovative company throughout its life time. In this year, based on the BusinessWeek, Intel Corporation is the 12th innovative company in the world. It has all most all the characteristics that Innovative Company should have. Some of the main characteristics can be identified as follows. Encourage the individual employees for innovation and appreciate their effort that can bring benefits for organization.

Intel Corporation motivates all their employees to come up with new ideas. It values each persons assigned work while providing necessary support for their innovative activities. When someone comes up with innovative idea, it gives all support to implement it without considering the fact that from where that idea comes from. Then Intel encourage that employee by giving appropriate portion of the benefits by providing advertising, promotions and basic salary increments etc. As an example, in September 2009, Ajay Bhatt an employee of Intel Corporation has come up with new idea that changes the shape of the mobile computer. Intel give him chance percent his idea, that is, how mobile processor power/performance continues to improve with every generation of process technology and how the revolution in the mobile platform enables thinner, lighter notebook PCs with longer battery life that are indispensible in our day-to-day lives. Give clear picture about Companys mission and vision to all the employees.

Every employee in this company knows the organizations mission and vision, and also has understood the idea behind that. This culture helps them to involve in strategic thinking.

Therefore they can come up with new ideas that are closer to Companys vision and helps to achieve Companys mission. Intel Corporations mission is Delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live. Other than vision and mission the employees also aware of the companys values and objectives, so that they can give their effort to the development of company in a way that company want. The valves of this company are customer orientation, results orientation, risk taking, quality and discipline. And the objectives of this company are extending silicon technology, manufacturing leadership, deliver unrivaled microprocessors and platforms, grow profitability worldwide, excel in customer orientation. Give the knowledge about market conditions to all the employees.

Everyone worker in an innovative organization knows the market conditions related to that Company. In Intel Corporation the staff members all the departments knows about organizations target markets, their customers and customers needs, and their competitors. They know the organizations products and the competitiveness of their products. So employees can come up with innovative ideas to compete with competitors in correct time. In semiconductor market, the only major competitor to the Intel is the Advanced Micro Devices (AMD) Company. Therefore when workers come up with ideas, they must have that before AMD getting that idea. Because of economic recession the overall chip sales in Intel has gone down for the first time after many years. But Intel allocates more than $4 billion into R&D activities this year also, for the reason that the recessions are a great time to increase market share over competitors. Since employees aware of this situation, they do not reduce the effort in the recession period, so the company remains innovative continuously. Celebrate the Successfulness

This company celebrates their success regularly so that the workers get inspiration from that. Next year they are planning to celebrate the 40th anniversary for introducing the first commercially available microprocessor (Intel 4004) in 1971. Make employees aware about the history of the company

Intel makes sure that all its employees know about companys bright history, so that they get motivated to be more innovative. Intel Corporation even has a museum that anyone can visit and learn its history.

(b) The Generic Business Level Strategy the Intel Corporation has adopted
Intel Corporation has been adopting Overall Differentiation Strategy as their Generic Business Level Strategy, from the beginning of their business. That means this company tries to produce unique products for a broad range of industry segment. For example, most of times Intel comes up with new revolutionary CPU architectures like Intel x86 and Core i7 which provides unique features to customers. Because of the uniqueness of the Intel's products, they can always charge premium prices form the customers. Most of these CPUs are general purpose processors, so those can be used in many applications and in various types of computers like Laptops, Notebooks, Desktops and Server Computers. Other than these processors they also produce Smart TVs, Flash memory, Motherboard Chipsets and Network Devices like Network Interface Cards. From these products they target the corporate customers who manufacture computers as well as household customers. Therefore their target market can be considered as Broad Target Market. And they also put their effort to be the Technological Leaders in the market with the Overall Differentiation Strategy, by introducing unique products with latest features to the customers. The earliest example for this factor is their first commercially available microprocessor Intel 4004, introduced in 1971. After that they have come up with many innovative products like Pentium processors, supercomputer systems such as Intel iPSC/1 and new architectures like x86 architecture that definitely categorize as Technological Leaders. To follow the differentiation strategy Intel concentrate mainly on product innovation and developing product features that customers value rather than on maintaining the lowest competitive price. They use number of ways to standardize their products so that they can maintain the differentiation strategy. Some of them are superior quality, unique features, rapid product innovation, advanced technological features and engineering design. As a company which uses differentiation business strategy, they need to meet the buyers needs and requirements more completely, compared to competitors offerings. Therefore they provide buyers greater reliability, durability, convenience, or ease of use. When talking about customers even though they have broad target market, other than household customers, they have small number of large corporate customers like Hewlett-Packard, Dell and Microsoft. Because of the uniqueness of processors and their features, Apple also has started to use Intel processors on their computers recently. In January 2006, the first Macintosh computers containing Intel CPUs were announced, and Apple had its entire line of consumer Macs running on Intel processors by early August 2006.

(c) The Aligning of Technology Strategy to support the Business Strategy identified in part (b)
Technology strategy is the task of building, maintaining and exploiting an organization's technological assets. The linkage of corporate business strategy and technology strategy plays an important role in firms success. Intel Corporation has successfully aligned their technology strategy with the differentiation business strategy. We can analyze this using the BMW framework which contain Competitive strategy stance, Value chain stance, Resource commitment stance, Management stance. Competitive strategy stance

To support differentiation business strategy this company should choose suitable technology in appropriate time to produce unique products. For that they target the new technologies that are capable of fulfilling necessary needs. Targeted technologies development may range from minor improvement to employment of emerging technologies in a first new product in new market. To find and develop the target technologies Intel Corporation allocate large amount of money every year as Research and Development (R&D) in their annual budgets. In 2009 they have allocated 5.7 billion dollars for the R&D activities. This is because the selection of the target technology as well as the entry time of that technology is very important to get obtain the Technology leadership in the semiconductor market. Since their only major competitor is AMD, they have to come up with new emerging technology before AMD get it, so that Intel can claim the licensing for that. In past Intel has successful in gaining technology licensing, because of their suitable technological strategies. For example since Intel was able to invent x86 architecture that has many advantages over other processor architectures, as technology leaders they have got lots of advantages. On June 6, 2005, Apple announced that they would be transitioning from its long favored PowerPC architecture to the Intel x86 architecture, because the future PowerPC s was unable to satisfy Apple's needs. This opened new market to a large customer. Value Chain Stance

Implementing and maintaining the Differentiation strategy successfully means that a company must consider its value chain of primary and secondary activities and effectively link those activities. The company's focus throughout its primary and secondary value-creating activities is on establishing the importance of quality, accuracy, speed, and responsiveness. The focus is also on understanding and meeting customers' unique preferences and monitoring the speed,

reliability, and quality of activities provided by others that interface with the company's inbound and outbound logistics. Since the technology embodied in the final product is not the only fact that helps to gain the competitive advantage, all the technologies used within the entire value chain must select carefully. Therefore when changing the technologies, Intel is considering the product technologies as well as process technologies. Resources commitment Stance

The amount of resources committed to innovation and other activities related to develop technological capabilities is a critical aspect of technological strategy, which defines the depth of companys strategy. Like most of innovative companies, as I mention above, Intel also allocate billions of dollars every year for Research and development activities. This large amount of money spending helps to increase the number of technological options that available to the firm and to increase firms capacity to anticipate technological developments in particular areas before the competitors. This will ultimately helps to come up with unique products, which helps for better Differentiation business strategy. Management Stance

Firms that can organize themselves to meet the organizational requirements flowing from their competitive, value chain and resource commitment stances are more likely to have an effective technology strategy. Therefore Intel Corporation also has well defined organizational management system that support to technology strategy and business strategies.

(d) Knowledge Management and Intellectual Property Right practices used in the Intel Corporation
Knowledge Management practices: Knowledge Management consist a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences which may either embodied in individuals or embedded in organizational processes or practice. Knowledge Management practices used by Intel Corporation can be briefly explained as follows. Intel enters new markets by systematically collecting information, subsequently developing it into knowledge, both technical and commercial, that is used to define and market new products. This reflects the central characteristics of Intel's business strategy. That is, need to grow in high volume and high margin markets, the knowledge that new technology was going to arrive defines the semiconductor business ("Moore's Law": The number of transistors per square mm of silicon doubles every 18 months), the knowledge that Intel had to displace either internally

sourced components or components supplied by its competitors, Intel's need to grow in unfamiliar large established markets because of the continually rapidly declining prices of existing products in existing markets. This reflects the technical strategy of integrating upwards from components to subsystems whilst also increasing the overall capability of the system and reducing its cost. In the Knowledge Management process Intels develop Product Definition Approach and Target Customer Engagement Plan and the Engagement Plan for the target industry. The main steps of these plans are shown below. Product Definition Approach and Target Customer Engagement Plan: 1. Hire a highly knowledgeable, highly credible person from the target industry. Add these people to a team consisting of a Market Manager, a leading Intel IC design/applications engineer, and a Market Planner/Market Researcher. 2. Perform a detailed technical and business analysis of the products produced by the industry and of the structure of the industry, its customers and suppliers. 3. Outline potential Intel products to serve the target industry. Analyze the market size and competitive impact, project profits and product life, development path etc. 4. Conceptual design starts. The objective is to solve the central problems presented in designing the new products. The Target Industry Engagement Plan: 1. 2. 3. 4. Identify and analyze all the players in the target market. Build a picture of the organizational structure in these businesses. Develop outline product specifications datasheets Develop a tri-level customer presentation, with the following target audiences and content: An Engineering Presentation A Mid-Management Presentation An Executive (President and VP) Presentation 5. Develop a Roadshow. This Roadshow is a multi-level series of visits to a carefully sequenced list of the various companies in the industry. Intel contacts people at all levels in target companies, using members of the team and various levels of more senior people in Intel to gain access. Other than these procedures, Intel Corporate has several Knowledge Management practices to develop, share, retain and protect the knowledge inside the company. All these practices aid to improve the efficiency of knowledge management inside the company.

 IPR (Intellectual Property Right) practices: Intellectual Property (IP) is a creations of the mind for which property rights are recognized. Intellectual Property rights that are relate to Intels various products and services include patents, copyrights, trade secrets, trademarks, and mask work rights. They maintain a program to protect their investment in technology by attempting to ensure respect for their intellectual property rights. Since Intel Corporation is a worldwide company, the extent of the legal protection given to different types of intellectual property rights varies under different countries legal systems. They have filed and obtained a number of patents in the U.S. and other countries. They intend to license their intellectual property rights where they can obtain adequate consideration. For that they consider risk factors like, Changes in business and economic conditions including downturns in the semiconductor industry and the overall economy Changes in consumer confidence caused by changes in market conditions including changes in the credit market, expectations for inflation, and energy prices Changes in the level of customers components inventories Competitive pressures, including pricing pressures, from companies that have competing products, chip architectures, manufacturing technologies, and marketing programs Changes in customer product needs Strategic actions taken by their competitors Market acceptance of their products

While their patents are an important element of their success, their business as a whole is not significantly dependent on any one patent. They believe that the duration of the applicable patents that they are granted is adequate relative to the expected lives of our products. Because of the fast pace of innovation and product development, their products are often obsolete before the patents related to them expire, and sometimes are obsolete before the patents related to them are even granted. Established competitors in existing and new industries, as well as companies that purchase and enforce patents and other intellectual property, may already have patents covering similar products. There is no assurance that they will be able to obtain patents covering our own products, or that they will be able to obtain licenses from such companies on favorable terms or at all. The majority of the software that they distribute, including software embedded in their component and system-level products, is entitled to copyright protection. To distinguish Intel products from their competitors products, they have obtained certain trademarks and trade names for their products, and they maintain cooperative advertising

programs with certain customers to promote their brands and to identify products containing genuine Intel components. They also protect certain details about their processes, products, and strategies as trade secrets, keeping confidential the information that they believe provides them with a competitive advantage. They have ongoing programs designed to maintain the confidentiality of such information.

(e) Suggestions /Recommendations for Improvement in Management of Technology

Even though Intel is a successful company we can identify several facts that help to improve the Management of Technology and develop sustainable competitive advantage further. Although Intel has been the leading the semi-conductor industry for past few decades, it always has trouble building businesses outside of its core business. This is mainly because they do not have experience for other products. So they should contract with other organizations to share experience and knowledge base. The dramatic growth of mobile devices has produced huge opportunities in markets, but Intel has a limited presence in this market. Since this is related to the semi-conductor industry, if Intel analyze the situation and enter the market, it can gain many profits out of that. Technology providers are increasingly looking to advanced chips like FPGAs which is programmable, to enhance system performance. Many small companies that do not have financial and technological capabilities to produce their own processors use these chips. But Intel does not consider producing FPGAs yet. As a main point I can suggest that Intel should identify more emerging areas in technology market. It should not limit to micro processors. If they identify those appropriate new markets, they will be the most innovative organization in the world, while increasing their profits further.

References
http://www.businessweek.com/interactive_reports/innovative_companies_2010.html http://www.intel.com/corporate/europe/emea/eng/intel/index.htm?iid=hdr-UK+about http://en.wikipedia.org/wiki/Intel_Corporation