Wednesday, November 27, 2019
Am a Customer Centric Approach to Innovation Essay Example
Am: a Customer Centric Approach to Innovation Essay AMDà : A Customer-Centric Approach to Innovation ISEG ââ¬â ISM MBA Program September 30, 2010 Professional Management Skills Assessment Word Count: 2600 This case analyzes the strategy of AMD, a microprocessor manufacturer which is a direct competitor of another microprocessor company, Intel. Between the two companies the competition has never been really balanced because of Intelââ¬â¢s much more Important Size and budget. AMD has found itself in a bad shape several times but has always success in overcoming difficulties resulting from its far smaller market shares and ââ¬â over the years ââ¬â has built a strategy to survive and strengthen its position against its giant competitor Intel. What would it take for AMD to see significant increase in its market share in processors used in corporate desktops and notebooks? How can the success of Opteron in the server segment be leveraged to other segments? It would take a lot for AMD to catch up with Intel as the gap in terms of market share between the two companies is huge. We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Except in very specialized niche markets, Intel has kept a significant leadership in every segments, including the server microprocessor market where AMD best performed. Still in the second quarter of 2010, the domination of Intel over the market was undeniable with 86. 1% market share against 13. 7% for AMD on the pc processor segment, 72. 2% against 27. 5% on the desktop microprocessor market and a 93. 5% market share against 6. 5% on the x 86 server microprocessor segment. (Michelle Maisto citing IDC, 2010). Moreover as mentioned by Ofek and Barley ââ¬Å"Intelââ¬â¢s dominant market position could limit AMDââ¬â¢s ability to make inroads to key market segments beyond servers, such as corporate desktops and notebooks. â⬠In order to gain significant market share in processor used in corporate desktops and notebooks, AMD should, in my opinion, focus on differentiating its products by giving them an added value that would be valuable to end users. Thatââ¬â¢s what, so far, the company couldnââ¬â¢t achieve for the desktops and notebooks ranges of microprocessors. Indeed, their price/performance ratio is not as interesting as the performance of their ange of serversââ¬â¢ microprocessors. (Ofek amp; Barley p. 11) To not have a value added on those microprocessors, that would differentiate them from Intelââ¬â¢s microprocessors, is definitely a big issue for opening significant inroads into this market. The product differentiation is one solution. By improving the quality an d the number of features of its desktops and notebooks microprocessors, AMD can get a competitive advantage over Intelââ¬â¢s product. Though, since Intelââ¬â¢s Ramp;D funds are much higher (Ofek amp; Barley p. 19), one good way to overtake Intel would be to perpetuate the ââ¬Å"virtual Gorillaâ⬠Strategy presented by Ofek amp; Barley p. . Technology partnership would indeed accelerate the improvement of AMD products and would create synergies with partners that, in the case of AMD, often are potential customers too. The second solution for AMD is to differentiate its product by conceptualizing new ways of using products based on their assets. The example given on the paper is a perfect illustration of what could have been done to create a new way of using corporate desktop by ââ¬Å"reinventing the commercial clientâ⬠with the ââ¬Å"Server based computing. â⬠(Ofek amp; Barley p. 12). The idea was great; it was about selling to clients a computing system based on the best asset of AMD which was the serverââ¬â¢s microprocessors. Finally the ââ¬Å"customer centric approachâ⬠set by AMD to improve and develop its products in a way that serves the best end users is a good idea to explore. It first allows the company to create products with features that are supposed to be very close to customersââ¬â¢ expectations. On the other hand this perpetual communication and mutual feedback introduced between AMD and the end users contribute to build a relationship based on trust that might turn to be a long term relationship. However, even though AMD had the best microprocessor for desktops and notebooks computers, would that be enough? Indeed, to have the best product is one thing, but to convince potential customer and end users that your product is the best is another story. A great part relies in how AMD will market its desktops and notebooks microprocessors. Here the success of Opteron in the server microprocessor segment can be leveraged by using the notoriety AMD gained through the success of this product. AMD has to use this arguments to progressively gain the credibility it lacks on those segments. Then if AMD success to put itself as a credible alternative to Intelââ¬â¢s microprocessor over desktops and notebooks segments, they would have done half the way. The second half of the way relies on creating a change in OEMs minds, that is, to switch from to position of a ââ¬Å"credible alternative supplierâ⬠that they can use as a threat in their bargain with Intel to the supplier they want to buy from. And this shift on OEMs customers could likely come from Intelââ¬â¢s strategy itself. Indeed, in the recent year the microprocessor giant has widened its range of products and now offers a larger range of hardware as well as a significant range of software (John Stokes, June 2010). As a result, OEMââ¬â¢s could review their buying strategy as Intel becomes more and more a potential competitor for them. Thus, if they are a credible enough alternative, AMD could take advantage of this situation in order to gain market shares. The microprocessor company is even rumored to be in talks with Apple in order to supply microprocessors for the iMac. (John Stokes, May 2010). What do you make of AMDââ¬â¢s ââ¬Å"power Campaignâ⬠? Is the value proposition it highlights compelling to end users? Since AMD had an unquestionable competitive advantage over Intel regarding the performance per wattage of its microprocessors, and that, adopting AMD chips would likely result in energy savings as well as space savings for end users; which both lead to money savings. AMD was perfectly right to capitalize on this asset in order to run a powerful advertising campaign that would definitely hit Intelââ¬â¢s product notoriety or, at least strengthen the awareness of customers for AMDââ¬â¢s power efficient microprocessors. In my opinion the campaign was well thought and it brought end users to either realize or think about the potential savings they could do by switching from an Intel based CPU to an AMD one. However, the efficiency of this campaign has been affected by external parameters that AMD canââ¬â¢t totally control. First of all, as mentioned by Ofek and Barley in their paper, ââ¬Å"there are some customers that focus less on technology and more on the corporate brand when making their purchase decision. Today it is easy (for us) to win the hearts and minds of the CIO and IT managers, but the CFOs and CEOs have to be willing to engage (with us)â⬠. Some people will thus continue to buy from Intel because of the awareness they have toward this brand and not on the basis of an objective comparison of both technologies. Then we can remind that unfortunately at the time of this advertising campaign, the range of AMD based servers proposed by OEM was relatively restricted compared to the range of Intel based servers. Once again this wasnââ¬â¢t due to a performance matter, but to the fact that most OEMs were literally scared of giving more room to AMD based product in their offer as they feared Intelââ¬â¢s future reaction. Ofek amp; Barley p. 11). Finally, the timing of the campaign could have been debated has it came just before the announcement by Intel to launch a ââ¬Å"new core architectureâ⬠that would be more energy efficient and with a better performance than any AMD chip (Ofek amp; Barley p. 14). Intelââ¬â¢s awareness being much bigger than AMD, this announcement might have locked AMDââ¬â¢s message out of th e customersââ¬â¢ mind. The value proposition highlighted in the power campaign is quite attracting to end users as it would allow companies to cut cost significantly by saving energy. This is confirmed as well by the result of a Ziff-Davis Media Survey mentioned in the paper which says that ââ¬Å" power consumption and cooling in data centers were significant concernsâ⬠for data center decision-makers (Ofek amp; Barley p. 12). But on the meantime, the same survey relates that real investment decision makers didnââ¬â¢t ââ¬Å"sought to lower operating costs by targeting data center power consumption and coolingâ⬠. In my opinion the value proposition highlighted ââ¬â even though it was attracting- wasnââ¬â¢t totally compelling to end users. Indeed for most of the companies a change in the technology would probably require a big investment that would weight in the company expenses and that would turn to be profitable over the medium or long term thanks to energy savings. But why many company would choose this option since Intel announced they would launch soon a chip that would save energy too and that would be more efficient than AMDââ¬â¢s chips? Many companies would thus prefer to upgrade their Intel chip as it would probably be cheaper and not less efficient. How concerned should AMD be about Intelââ¬â¢s imminent new product plans? Will they hamper AMDââ¬â¢s growth plans? AMD should obviously be strongly concerned about Intelââ¬â¢s imminent new product line. The new chips Intel plans to launch are directly in competition with AMD products. Moreover, Intel not only plans to be competitive in the server market but in the desktops and mobile segments as well. Those new processors will, according to Intel, exceed everything AMD could launch in 2006â⬠(Ofek amp; Barley p. 14) in terms of performance and power efficiency. The launch of those microprocessors, if t turns to be true, is a big concern for AMD that has already not a dominant position over the market. More than simply locking AMD out from desktops and mobile segments, it could reverse the servers segment in favor of Intel. Of course this remains hypothetical and this reorganization of Intel could either hamper or benefit to AMDââ¬â¢s growth. I would explain this thou ght by the fact that Intelââ¬â¢s reorganization already planned to broaden the companyââ¬â¢s offer with software, wifi radio, chip-set and other features in order to give to Intel ââ¬Å"a greater share of wallet than a processor sale aloneâ⬠(Ofek amp; barley p. 5). But as said in the first question, this strategy might lead OEMs to consider Intel more as a direct competitor for some components and thus to partially review their business relationship with the chip maker at the benefit of AMD. Will AMDââ¬â¢s customer centric approach be a source of advantage over Intel? AMDââ¬â¢s goal to focus on customer needs could look at first as a common marketing behavior. Indeed, the goal of marketing is to assess the needs of customers in order to propose a product that fits the best their expectations. As said by Ruiz in the paper of Ofek amp; Barley (p. 13) ââ¬Å"It is very difficult to define what is customer centric, because everyone says they are customer focused these days. â⬠However, AMD strategy seems to go beyond the simple will to fulfill what is expected to be the need of an average customer in the industry. What AMD really intends to build is trust based, long term relationship with their customers. They want to listen carefully to their feedback and make developments that are the result of those feedbacks. AMD donââ¬â¢t want to make technology improvements based on what they guess is important for their customers but rather on the real accurate points that customers themselves said they should develop. To achieve this ambitious project the company has undertaken a big reshaping of their customer service processes by creating ââ¬Å"go to market groupsâ⬠such as the Commercial business group or the Commercial Channel Council which are really close from end users and brainstorm with them before reporting to technical teams, also called ââ¬Å"product groupâ⬠. (Ofek and Barley p. 3) This allows AMD to create a real added value around its product line by fulfilling end users needs as accurately as it can be. Here is definitely a source of advantage over Intel as this strategy really helps to assess customer preferences over the long term and to observe the evolution of market needs. Moreover, by doing so, AMD will likely satisfy its customers and then keep them as clients. Thi s synergy created between AMD and its customers will finally bring them to consider each other as real partners, willing to work together, and AMD wonââ¬â¢t be seen anymore as a simple technology provider. If Intel keeps imposing guideline to OEMs without assessing further their real needs, the AMD customer centric approach could, indeed, turn to be a very worthy competitive advantage for the company. Will it yield commercially viable innovations that are dramatically different than those Intel will develop? On the big picture, innovations in microprocessor technology will remain ââ¬â in my opinion ââ¬â merely the same between AMD and Intel. AMD isnââ¬â¢t powerful enough to create a revolution within the industry. However, AMDââ¬â¢s customer centric approach has chances to yield commercially viable innovations. By understanding better end users, the company can optimize the technology and adapt the productââ¬â¢s efficiency in order it fits the customerââ¬â¢s exact needs. Even though Intel and AMD are likely to have comparable technologies in terms of power efficiency and performances, AMD appear to be more willing to put themselves ââ¬Å"in the shoes of their customers. â⬠(Ofek amp; Barley, p. 13) With same performances the difference in the productââ¬â¢s choice can come from how well this product can perform within a special environment. With their customer centric approach AMD tries to understand their customerââ¬â¢s environments, challenges, etcâ⬠¦ and they build together ââ¬â thanks to mutual feedbacks ââ¬â ways to implement the microprocessorsââ¬â¢ technology at their maximum power. It results in a better efficiency thanks to a greater productââ¬â¢s adaptability and a better understanding of the product by end users. That is in my opinion a source of economically viable innovation that could contribute to make the difference. The perfect example is given with the Torrenza initiative that aimed to completely open to customers the architecture of AMD Opteron microprocessor. Ofek amp; Barley p. 13) This was a risky bet by AMD, but it definitely had the potential to create viable innovation by giving the keys to customers. By being able to tailor the technology to their needs they necessarily optimize the efficiency of microprocessor for the tasks it is used for. This ââ¬Å"gift ââ¬Å" to custo mers could be the source of some innovations that Intel wonââ¬â¢t be able to detect as accurately, because they couldnââ¬â¢t detect the need for those specific innovation. Here the innovation involves several different levels. Not only innovation in performances matters, but also innovation with productââ¬â¢s flexibility, with feedbacks and customer relationship processes. All those innovations are commercially viable even thought they donââ¬â¢t give a dominant position to AMD, they contribute to strengthen the companyââ¬â¢s market shares and to its slow but continuous growth. As a conclusion, we could say that AMD competition with Intel in the microprocessors industry is good for OEMs as, at least, they can choose between 2 companies. It is utopian to think of AMD surpassing Intel in this competition as Intel leads almost all the industry segments, far ahead from AMD. However AMD should keep going this way and take every opportunity to differentiate itself from the giant Intel in order to keep growing and to be considered as a viable alternative by every potential customer. Bibliography Maisto, Michel. Intel, AMD Lead a Rejuvenated Chip Market: IDC Desktops and Notebooks from EWeek. Technology News, Tech Product Reviews, Research and Enterprise Analysis EWeek. 19 Aug. 010. Web. 05 Oct. 2010. http://www. eweek. com/c/a/Desktops-and-Notebooks/Intel-AMD-Lead-a-Rejuvenated-Chip-Market-IDC-848326/à Ofek, Elie, and Lauren Barley. AMD: A Customer-centric Approach to Innovation. Working paper no. 9-507-037. (Boston): Harvard Business School UP, 2007. Print. Stokes, Jon. Intels Big Strategy Shift and AMDs Opportunity. Ars Technica. Ars Technica à © 2010 Conde Nast Digital. , June 2010. Web. 05 Oct. 2010. http://arstechnica. com/business/news/2010/05/intels-big-strategy-shift-and-amds-opportunity. ars Am a Customer Centric Approach to Innovation Essay Example Am: a Customer Centric Approach to Innovation Essay AMDà : A Customer-Centric Approach to Innovation ISEG ââ¬â ISM MBA Program September 30, 2010 Professional Management Skills Assessment Word Count: 2600 This case analyzes the strategy of AMD, a microprocessor manufacturer which is a direct competitor of another microprocessor company, Intel. Between the two companies the competition has never been really balanced because of Intelââ¬â¢s much more Important Size and budget. AMD has found itself in a bad shape several times but has always success in overcoming difficulties resulting from its far smaller market shares and ââ¬â over the years ââ¬â has built a strategy to survive and strengthen its position against its giant competitor Intel. What would it take for AMD to see significant increase in its market share in processors used in corporate desktops and notebooks? How can the success of Opteron in the server segment be leveraged to other segments? It would take a lot for AMD to catch up with Intel as the gap in terms of market share between the two companies is huge. We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Am: a Customer Centric Approach to Innovation specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Except in very specialized niche markets, Intel has kept a significant leadership in every segments, including the server microprocessor market where AMD best performed. Still in the second quarter of 2010, the domination of Intel over the market was undeniable with 86. 1% market share against 13. 7% for AMD on the pc processor segment, 72. 2% against 27. 5% on the desktop microprocessor market and a 93. 5% market share against 6. 5% on the x 86 server microprocessor segment. (Michelle Maisto citing IDC, 2010). Moreover as mentioned by Ofek and Barley ââ¬Å"Intelââ¬â¢s dominant market position could limit AMDââ¬â¢s ability to make inroads to key market segments beyond servers, such as corporate desktops and notebooks. â⬠In order to gain significant market share in processor used in corporate desktops and notebooks, AMD should, in my opinion, focus on differentiating its products by giving them an added value that would be valuable to end users. Thatââ¬â¢s what, so far, the company couldnââ¬â¢t achieve for the desktops and notebooks ranges of microprocessors. Indeed, their price/performance ratio is not as interesting as the performance of their ange of serversââ¬â¢ microprocessors. (Ofek amp; Barley p. 11) To not have a value added on those microprocessors, that would differentiate them from Intelââ¬â¢s microprocessors, is definitely a big issue for opening significant inroads into this market. The product differentiation is one solution. By improving the quality an d the number of features of its desktops and notebooks microprocessors, AMD can get a competitive advantage over Intelââ¬â¢s product. Though, since Intelââ¬â¢s Ramp;D funds are much higher (Ofek amp; Barley p. 19), one good way to overtake Intel would be to perpetuate the ââ¬Å"virtual Gorillaâ⬠Strategy presented by Ofek amp; Barley p. . Technology partnership would indeed accelerate the improvement of AMD products and would create synergies with partners that, in the case of AMD, often are potential customers too. The second solution for AMD is to differentiate its product by conceptualizing new ways of using products based on their assets. The example given on the paper is a perfect illustration of what could have been done to create a new way of using corporate desktop by ââ¬Å"reinventing the commercial clientâ⬠with the ââ¬Å"Server based computing. â⬠(Ofek amp; Barley p. 12). The idea was great; it was about selling to clients a computing system based on the best asset of AMD which was the serverââ¬â¢s microprocessors. Finally the ââ¬Å"customer centric approachâ⬠set by AMD to improve and develop its products in a way that serves the best end users is a good idea to explore. It first allows the company to create products with features that are supposed to be very close to customersââ¬â¢ expectations. On the other hand this perpetual communication and mutual feedback introduced between AMD and the end users contribute to build a relationship based on trust that might turn to be a long term relationship. However, even though AMD had the best microprocessor for desktops and notebooks computers, would that be enough? Indeed, to have the best product is one thing, but to convince potential customer and end users that your product is the best is another story. A great part relies in how AMD will market its desktops and notebooks microprocessors. Here the success of Opteron in the server microprocessor segment can be leveraged by using the notoriety AMD gained through the success of this product. AMD has to use this arguments to progressively gain the credibility it lacks on those segments. Then if AMD success to put itself as a credible alternative to Intelââ¬â¢s microprocessor over desktops and notebooks segments, they would have done half the way. The second half of the way relies on creating a change in OEMs minds, that is, to switch from to position of a ââ¬Å"credible alternative supplierâ⬠that they can use as a threat in their bargain with Intel to the supplier they want to buy from. And this shift on OEMs customers could likely come from Intelââ¬â¢s strategy itself. Indeed, in the recent year the microprocessor giant has widened its range of products and now offers a larger range of hardware as well as a significant range of software (John Stokes, June 2010). As a result, OEMââ¬â¢s could review their buying strategy as Intel becomes more and more a potential competitor for them. Thus, if they are a credible enough alternative, AMD could take advantage of this situation in order to gain market shares. The microprocessor company is even rumored to be in talks with Apple in order to supply microprocessors for the iMac. (John Stokes, May 2010). What do you make of AMDââ¬â¢s ââ¬Å"power Campaignâ⬠? Is the value proposition it highlights compelling to end users? Since AMD had an unquestionable competitive advantage over Intel regarding the performance per wattage of its microprocessors, and that, adopting AMD chips would likely result in energy savings as well as space savings for end users; which both lead to money savings. AMD was perfectly right to capitalize on this asset in order to run a powerful advertising campaign that would definitely hit Intelââ¬â¢s product notoriety or, at least strengthen the awareness of customers for AMDââ¬â¢s power efficient microprocessors. In my opinion the campaign was well thought and it brought end users to either realize or think about the potential savings they could do by switching from an Intel based CPU to an AMD one. However, the efficiency of this campaign has been affected by external parameters that AMD canââ¬â¢t totally control. First of all, as mentioned by Ofek and Barley in their paper, ââ¬Å"there are some customers that focus less on technology and more on the corporate brand when making their purchase decision. Today it is easy (for us) to win the hearts and minds of the CIO and IT managers, but the CFOs and CEOs have to be willing to engage (with us)â⬠. Some people will thus continue to buy from Intel because of the awareness they have toward this brand and not on the basis of an objective comparison of both technologies. Then we can remind that unfortunately at the time of this advertising campaign, the range of AMD based servers proposed by OEM was relatively restricted compared to the range of Intel based servers. Once again this wasnââ¬â¢t due to a performance matter, but to the fact that most OEMs were literally scared of giving more room to AMD based product in their offer as they feared Intelââ¬â¢s future reaction. Ofek amp; Barley p. 11). Finally, the timing of the campaign could have been debated has it came just before the announcement by Intel to launch a ââ¬Å"new core architectureâ⬠that would be more energy efficient and with a better performance than any AMD chip (Ofek amp; Barley p. 14). Intelââ¬â¢s awareness being much bigger than AMD, this announcement might have locked AMDââ¬â¢s message out of th e customersââ¬â¢ mind. The value proposition highlighted in the power campaign is quite attracting to end users as it would allow companies to cut cost significantly by saving energy. This is confirmed as well by the result of a Ziff-Davis Media Survey mentioned in the paper which says that ââ¬Å" power consumption and cooling in data centers were significant concernsâ⬠for data center decision-makers (Ofek amp; Barley p. 12). But on the meantime, the same survey relates that real investment decision makers didnââ¬â¢t ââ¬Å"sought to lower operating costs by targeting data center power consumption and coolingâ⬠. In my opinion the value proposition highlighted ââ¬â even though it was attracting- wasnââ¬â¢t totally compelling to end users. Indeed for most of the companies a change in the technology would probably require a big investment that would weight in the company expenses and that would turn to be profitable over the medium or long term thanks to energy savings. But why many company would choose this option since Intel announced they would launch soon a chip that would save energy too and that would be more efficient than AMDââ¬â¢s chips? Many companies would thus prefer to upgrade their Intel chip as it would probably be cheaper and not less efficient. How concerned should AMD be about Intelââ¬â¢s imminent new product plans? Will they hamper AMDââ¬â¢s growth plans? AMD should obviously be strongly concerned about Intelââ¬â¢s imminent new product line. The new chips Intel plans to launch are directly in competition with AMD products. Moreover, Intel not only plans to be competitive in the server market but in the desktops and mobile segments as well. Those new processors will, according to Intel, exceed everything AMD could launch in 2006â⬠(Ofek amp; Barley p. 14) in terms of performance and power efficiency. The launch of those microprocessors, if t turns to be true, is a big concern for AMD that has already not a dominant position over the market. More than simply locking AMD out from desktops and mobile segments, it could reverse the servers segment in favor of Intel. Of course this remains hypothetical and this reorganization of Intel could either hamper or benefit to AMDââ¬â¢s growth. I would explain this thou ght by the fact that Intelââ¬â¢s reorganization already planned to broaden the companyââ¬â¢s offer with software, wifi radio, chip-set and other features in order to give to Intel ââ¬Å"a greater share of wallet than a processor sale aloneâ⬠(Ofek amp; barley p. 5). But as said in the first question, this strategy might lead OEMs to consider Intel more as a direct competitor for some components and thus to partially review their business relationship with the chip maker at the benefit of AMD. Will AMDââ¬â¢s customer centric approach be a source of advantage over Intel? AMDââ¬â¢s goal to focus on customer needs could look at first as a common marketing behavior. Indeed, the goal of marketing is to assess the needs of customers in order to propose a product that fits the best their expectations. As said by Ruiz in the paper of Ofek amp; Barley (p. 13) ââ¬Å"It is very difficult to define what is customer centric, because everyone says they are customer focused these days. â⬠However, AMD strategy seems to go beyond the simple will to fulfill what is expected to be the need of an average customer in the industry. What AMD really intends to build is trust based, long term relationship with their customers. They want to listen carefully to their feedback and make developments that are the result of those feedbacks. AMD donââ¬â¢t want to make technology improvements based on what they guess is important for their customers but rather on the real accurate points that customers themselves said they should develop. To achieve this ambitious project the company has undertaken a big reshaping of their customer service processes by creating ââ¬Å"go to market groupsâ⬠such as the Commercial business group or the Commercial Channel Council which are really close from end users and brainstorm with them before reporting to technical teams, also called ââ¬Å"product groupâ⬠. (Ofek and Barley p. 3) This allows AMD to create a real added value around its product line by fulfilling end users needs as accurately as it can be. Here is definitely a source of advantage over Intel as this strategy really helps to assess customer preferences over the long term and to observe the evolution of market needs. Moreover, by doing so, AMD will likely satisfy its customers and then keep them as clients. Thi s synergy created between AMD and its customers will finally bring them to consider each other as real partners, willing to work together, and AMD wonââ¬â¢t be seen anymore as a simple technology provider. If Intel keeps imposing guideline to OEMs without assessing further their real needs, the AMD customer centric approach could, indeed, turn to be a very worthy competitive advantage for the company. Will it yield commercially viable innovations that are dramatically different than those Intel will develop? On the big picture, innovations in microprocessor technology will remain ââ¬â in my opinion ââ¬â merely the same between AMD and Intel. AMD isnââ¬â¢t powerful enough to create a revolution within the industry. However, AMDââ¬â¢s customer centric approach has chances to yield commercially viable innovations. By understanding better end users, the company can optimize the technology and adapt the productââ¬â¢s efficiency in order it fits the customerââ¬â¢s exact needs. Even though Intel and AMD are likely to have comparable technologies in terms of power efficiency and performances, AMD appear to be more willing to put themselves ââ¬Å"in the shoes of their customers. â⬠(Ofek amp; Barley, p. 13) With same performances the difference in the productââ¬â¢s choice can come from how well this product can perform within a special environment. With their customer centric approach AMD tries to understand their customerââ¬â¢s environments, challenges, etcâ⬠¦ and they build together ââ¬â thanks to mutual feedbacks ââ¬â ways to implement the microprocessorsââ¬â¢ technology at their maximum power. It results in a better efficiency thanks to a greater productââ¬â¢s adaptability and a better understanding of the product by end users. That is in my opinion a source of economically viable innovation that could contribute to make the difference. The perfect example is given with the Torrenza initiative that aimed to completely open to customers the architecture of AMD Opteron microprocessor. Ofek amp; Barley p. 13) This was a risky bet by AMD, but it definitely had the potential to create viable innovation by giving the keys to customers. By being able to tailor the technology to their needs they necessarily optimize the efficiency of microprocessor for the tasks it is used for. This ââ¬Å"gift ââ¬Å" to custo mers could be the source of some innovations that Intel wonââ¬â¢t be able to detect as accurately, because they couldnââ¬â¢t detect the need for those specific innovation. Here the innovation involves several different levels. Not only innovation in performances matters, but also innovation with productââ¬â¢s flexibility, with feedbacks and customer relationship processes. All those innovations are commercially viable even thought they donââ¬â¢t give a dominant position to AMD, they contribute to strengthen the companyââ¬â¢s market shares and to its slow but continuous growth. As a conclusion, we could say that AMD competition with Intel in the microprocessors industry is good for OEMs as, at least, they can choose between 2 companies. It is utopian to think of AMD surpassing Intel in this competition as Intel leads almost all the industry segments, far ahead from AMD. However AMD should keep going this way and take every opportunity to differentiate itself from the giant Intel in order to keep growing and to be considered as a viable alternative by every potential customer. Bibliography Maisto, Michel. Intel, AMD Lead a Rejuvenated Chip Market: IDC Desktops and Notebooks from EWeek. Technology News, Tech Product Reviews, Research and Enterprise Analysis EWeek. 19 Aug. 010. Web. 05 Oct. 2010. http://www. eweek. com/c/a/Desktops-and-Notebooks/Intel-AMD-Lead-a-Rejuvenated-Chip-Market-IDC-848326/à Ofek, Elie, and Lauren Barley. AMD: A Customer-centric Approach to Innovation. Working paper no. 9-507-037. (Boston): Harvard Business School UP, 2007. Print. Stokes, Jon. Intels Big Strategy Shift and AMDs Opportunity. Ars Technica. Ars Technica à © 2010 Conde Nast Digital. , June 2010. Web. 05 Oct. 2010. http://arstechnica. com/business/news/2010/05/intels-big-strategy-shift-and-amds-opportunity. ars
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