Intel Corporation (A) The DRAM Decision

This cases focuses on the decision Intel’s top management faces at the end of 1984 whether or not to exit the DRAM (dynamic random access memory) business. It serves as a vehicle to discuss the evolution of Intel’s distinctive technological competencies and of the critical linkages between its corporate, technology, marketing and manufacturing strategies. The case also provides a rich context in which to examine the effects of apparent industry structural changes on the relative importance of different technological competencies and the linkages between corporate, technology, marketing, and manufacturing strategies. Intel was the first successful mover with DRAM products, yet it still believes that DRAMs are critical both from market and technology viewpoints, DRAMs have actually played a minor role in Intel’s product mix in the past five years. Logic products based on microprocessor technology have replaced memory products as Intel’s core business. The case leads to discussions about the implications of organizational beliefs on technology and manufacturing strategy and top management’s role in evaluating those beliefs during changing times. Of particular importance in this discussion is the distinction between the product market and technological competence aspects of the exit decision that are intertwined in top management’s beliefs. The case also leads to discussions about the role of the internal selection environment in a firm’s evolution. Finally, the case leads to a discussion of the process of strategic renewal at Intel, and the role of top management’s capacity for “strategic recognition” in that process.