You are on page 1of 7

Tetra Threat Framework

Sunil 36 - Marketing
Krishna 34 -Marketing
Pallavi 55 - Marketing
Pranav 56 - Operations
Group Members
Slide 1
About Intel
World leader in Silicon innovation, develops technologies, products, and
initiatives to continually advance how people work and live
Founded in 1968 to build semiconductor memory products
Intel introduced the worlds first microprocessor in 1971
Slide 2
Tetra Threat Framework
Added Value
Appropriate Value
Response to
Threat of
Response to
Threat of
Response to
Threat of
Hold up
Response to
Threat of
Slide 3
Response to Threat of Imitation
When producing DRAM it tried to get to economies of scales by its capacity power and
also by licensing and contracts to other people for producing DRAM for mass market.

When Intel started with project CRUSH, it introduced more than 2000 designs for the
customers which shows its scope economies strategy for reducing threat to imitation

When AMD and Cyrix imitated Intels microprocessor. Intel responded with
intellectual property protection

It also launched Intel Inside campaign

As there was increase in market size, there was a shift toward Cyrix and AMD Intel
increase the capacity of microprocessor and produced even cheaper microprocessor

As the product life cycle of microprocessor was shrinking Intel believed in continuous up
gradation and innovation, which helped the company to charge higher price and generate
profits in the early life cycle of the new product

Intel was the largest purchaser of semiconductor, so to achieve standardization; it relied on
best in breed sole supplier and tried to maintain healthy relationship because of high

Also they tried to maintain a good relationship with its complementors i.e Microsoft- Due
to which the end consumer of its product found it difficult to switch over, creating high
switching cost for its product
Slide 4
Response to Threat of Substitution
During 1980s the pace at which Japanese firm producing new products with better
capacity and higher volume gave them cost advantage. They also invested heavily in new
plant and equipment as compared to Intel , which did not respond to this pace of
Japanese firm and finally had to lose significant market share

Initially Intel was reluctant to exit memory business even after declining revenue from
this business. It continued with both microprocessor and DRAM - Only after
independence shown by middle management that it switched entirely to microprocessor

When Microsoft moved to operating system that was not tied to x86 architecture, Intel
responded by backing operating software other than windows, like Linux

Slide 5
Response to Threat of Hold-Up
Contracting Intel tried to enter in the market with scale economies due to which it
had many contracts with its suppliers to provide the parts to mass production

When buyers were more inclined towards RISC architecture, Intel hedged against
adoption of RISC by releasing i-860. It tried to reduce bargaining power through Intel
Inside campaign, which made the industry dependent upon CISC architecture

It also decreased the bargaining power of buyer by building a motherboard through
forward integration, and sold to number of OEMs, including Dell, HP, Gateway, and

Intel also reduced the bargaining power of suppliers by not only focusing on long term
contract but also on standard solution, rather than custom solution

Intel also tried to build trust and relationship with all complementors and supplier, i.e
whole value chain. All the complementors were quite dependent on the other for their