Case Study: Chipping Away at Intel

Case Study: Chipping Away at Intel

Introduction

It has been fateful for Barrett that Intel appeared to be in a poor shape throughout his entire tenure in the company as the CEO. He had a difficult time, implementing changes to deal with numerous internal as well as external pressures, demands and challenges that were likely to affect the performance of the company. Intel's quality lacking in quality, proper scheduling, excess supply, and reasonable rates, contributed as the most important pressures for Barrett. These were compounded by several other factors that served the same cause; shares going down, slowing global chip demand, slowing economy under impact of September 11, 2011 as a result of which Intel's rivals became much stronger (Clark, Tim., 1992). Thus, it was a very difficult phase for Intel and at the same time a great challenge for Barrett so as to maintain the company's standing.

Different Changes at Intel over the First Three Years of Barrett's Tenure

Barrett entered Intel with the ideology of making effort to double micro-processor performance every 18 months while at the same time making it progressively cheaper. He headed Intel beyond chip making for PCs into the production of information and communication appliances as well as services related in the Internet. Intel withdrew from the production of network servers and routers after muddling through condemnation from Dell and CISCO that were its biggest customers for its chips, for directly competing with them in these other markets. Further, iCat was also closed down that was an e-commerce service for small businesses, that lead to Web broadcasting of shareholder meetings, and cutting back on Web-surfing applications worldwide. There were also weak demand and overcapacity in the semiconductor industry with some researchers expecting a 34 percent fall in global sales of chips. Moreover, long-time rival Advanced Micro Devices had produced its Athlon processor chip, which turned out to be faster than Intel's Pentium III chip. Intel's shares dropped down a great deal and remained only $20 (Corcoran, Elizabeth., 1999).

Barrett engaged in a series of reorganizations during his first three years. He created a new wireless unit that combined new acquisitions such as DSP Communications Inc. that is a chipset supplier for digital communications, with Intel's flash memory operations. In his second year, Barrett created the Architecture Group, which combined development and manufacturing of core processors (Santa Clara, Calif., 1984). In his third year, he reorganized the Architecture Group and created a new unit consisting of a merger of communications and networking operations. For Barrett, these reorganizations were needed to enable decentralization and delegation of decision making; all designed to make the company better coordinated and more nimble. But there was so much reorganization over these years, trying to get the structure to work, that a former general manager saw Intel as now “dabbling in everything and overwhelming nothing.”

Environmental Pressures Experienced by Intel

The environment pressures that Barrett and Intel faced included declining markets, at the entire industry had been adversely affected by September 11, the ...