What actions did Intel take to create an industry standard in microprocessors?
1. Intel was well ahead of its competition in intellectual property in microprocessor
industry. In addition, Intel’s microprocessors had a microcode-a software code
found inside the microprocessor-that was copyrighted. These actions ensured Intel’s
sole proprietary right and sustainable advantage, in case if Intel’s product become
favorable to market.
2. Positive network with big companies such as IBM and OEMs. Combining sole IP
right advantage and network effect, Intel gained a big stake of total
microprocessors’ market share. Because Intel did have absolute advantage on their
cutting-edge microprocessors technology. It helped them with signing large volume
contracts with big PC companies, who generated thousands of millions of revenue
each year. This positive network effect helped Intel’s microprocessors scale big
enough to become industry standard.
3. The marketing campaign, Red X, helped Intel to brand themselves to end
customers, which reinforced their position of being industry standard.
Why was Intel so successful in microprocessors? How did it achieve a sustainable
competitive advantage?
When Intel was struggling with memory chips business, they quickly identified the new
opportunity in microprocessor industry. They decisively quitted memory chips, and
focused their resources on developing microprocessor to gain first-mover advantage.
Intel deeply understood that in high-tech industry, the technology advantage is the most
critical factor, which could affect on their success. Even when they were going through
