Intel Hbs Case

5. Evaluate Intel’s shift in strategy under CEO Craig Barrett and new CEO Paul Otellini.

Craig Barrett’s strategic focus was on innovation and R&D. He aggressively built new businesses thru acquisitions and internal ventures, to the tune of $12 billion. Under his leadership, Intel entered a myriad of new markets вЂ" wireless, networks, communications, and online services. In 1999, he changed the corporate mission statement. Intel went from “being the preeminent supplier to the new computing industry worldwide” to “being the preeminent building-block supplier to the worldwide Internet economy”. He reorganized the company into four key areas вЂ" client platforms, server platforms, cellular and wireless, and communications and networking.

As for client platforms, he targeted innovation on an architectural level. In response to AMD, Intel sought to stay ahead by 12-18 months in process technology. He also targeted corporate buyers who were less price sensitive and more technically savvy. With server platforms, most of Intel’s energy went towards the high-end server segment that ran corporate data centers. Many of the innovations made by the server group made their way into mainstream processors. The Wireless and Cellular group focused on the wireless Web, which allowed people to access the Internet from cellular phones and other handheld devices. In 2002, Intel separated the application subsystem from the communication subsystem in the hopes that the separation would speed up the development and deployment of wireless Internet devices. The Networking and Communication team focused on the mass production of lower cost interchangeable devices. They wanted to provide the industry with standard building blocks through Internet Exchange Architecture (IXA), which allowed for more mass-produced, lower-cost, and interchangeable devices.

As the COO of the company, and head of Intel’s clients, servers, and communications businesses, Paul Otellini’s long term objective was to make the success of the communications group indistinguishable from the PC group. He strived to make the Intel chip the industry standard, and also heavily invested in Wi-Fi technology. He wanted to make innovative, energy efficient products, as well as portable wireless computing available anytime, anywhere. He sought to bring the next billion people online with affordable computers tailored to fit their needs. His next step was to build a semiconductor plant in Dalian, China.

Otellini was appointed as COO to allow Barrett to concentrate most of his efforts on developing Intel’s strategic long-term direction and new business areas. At the same time, they tried to keep resources equally weighted between maintenance of existing businesses and development of new businesses.

Otellini as CEO would develop