Case | HBS Case Collection | 2010 (Revised from original 2002 version)

Intel Corporation: 1968-2003

by Ramon Casadesus-Masanell, David B. Yoffie and Sasha Mattu

Abstract

Describes three stages in Intel's history: the initial success and then collapse in DRAMs and EPROMs, its transition to and dominance in microprocessors, and its move to become the main supplier of the building blocks for the Internet economy. Allows a rich discussion of industry structure and transformation in DRAMs and microprocessors, creation of competitive advantage and value capture, and sustainability.

Keywords: History; Organizational Change and Adaptation; Internet; Information Technology; Competitive Strategy; Corporate Strategy; Industry Structures; Information Technology Industry; Technology Industry;

Format: Print

25 pages

Purchase

Citation:

Casadesus-Masanell, Ramon, David B. Yoffie, and Sasha Mattu. "Intel Corporation: 1968-2003." Harvard Business School Case 703-427, February 2010. (Revised from original November 2002 version.)

We analyze the implications of consumer privacy for competition in the marketplace. We consider a market where firms set prices and disclosure levels for consumer information and consumers observe both before deciding which firm to patronize and how much information to provide it with. The provision and disclosure of information presents tradeoffs for all market participants. Consumers benefit from providing information to the firm, as this increases the utility they derive from the service, but they incur disutility from information disclosure. This in turn benefits the firm providing an additional source of revenue, but reduces consumer demand for the service. We characterize equilibrium information provision, disclosure levels, and prices as a function of the consumer population's valuation for the service, and show that competition has three main effects on the marketplace. First, competition drives the provision of services with a low level of disclosure. Second, competition ensures that services with a high level of disclosure subsidize consumers. And third, higher competition intensity tends to increase the volume of consumer information disclosed by firms. Our findings are particularly relevant to the business models of Internet firms and contribute to inform the regulatory debate on consumer privacy.

This paper provides the first formal model of business model innovation. Our analysis focuses on sponsor-based business model innovations where a firm monetizes its product through sponsors rather than setting prices to its customer base. We analyze strategic interactions between an innovative entrant and an incumbent where the incumbent may imitate the entrant's business model innovation once it is revealed. The results suggest that an entrant needs to strategically choose whether to reveal its innovation by competing through the new business model or conceal it by adopting a traditional business model. We also show that the value of business model innovation may be so substantial that an incumbent may prefer to compete in a duopoly rather than to remain a monopolist.

Since its inception in 2003, LinkedIn had become a leading Silicon Valley institution with a brand name that was recognizable throughout the U.S. and in many countries overseas. As of March 2012, LinkedIn was the world's largest professional network on the Internet with $522.2 million in revenue in 2011 and more than 150 million members in over 200 countries. Unlike other major social networking sites, LinkedIn focused exclusively on fostering connections within the professional market. As LinedIn's CEO thought about the future, he recognized the challenges in continuing to massively scale the company. At the same time, he focused on how LinkedIn could continue to use its vast amount of data to provide additional products and services for its members and customers.

General Information

Academic Programs

Alumni

Faculty & Research

Recruit

Resources

Faculty & Research

Intel Corporation: 1968-2003

Abstract

About the Authors

More from these Authors

Contact

Related Links

Resources