Using innovation to create competitive advantage
An Intel case study

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Page 5: Competitive advantage

Competitive advantage means a company has or does something better than its rivals. The Intel 'tick-tock' strategy was announced in September 2006 by Intel's CEO, Paul Otellini. It is a blueprint for Intel to maintain its technology leadership and competitive advantage. It plans to take advantage of Intel”s product research, development and manufacturing capacity to deliver improved products every year.

This regular improvement will ensure continued market leadership. In 'tick' years Intel will introduce a new manufacturing process (of which the 45nm process is the latest). 'Tock' years will see the introduction of new designs (architectures) of CPUs (central processing units).

Intel is competitive because:

  • it has a regular cadence (or rhythm) to the development of new products or improvements to existing ones
  • it integrates teams from R&D and all areas of manufacturing, all working to the same schedules. Intel is the only company that can combine and optimise manufacturing process technology, product design, leading-edge capacity, design tools, masks and packaging in-house
  • it sets the highest standards in high-quality clean production. The company invests vast sums in R&D and manufacturing. This makes it is difficult for rival companies to match Intel
  • it designs quality products. Intel continually develops new technologies that combine product-led, user-led, and market-led features
  • it is able to leverage its manufacturing capability. This means it can increase production to bring product to market in large volumes. Increasing volume and getting the product onto the market as quickly as possible are important elements in creating and maintaining a competitive advantage.

Intellectual property

In order to protect its advantage it is essential that Intel registers intellectual property and patents in new product development. This registration is vital for Intel. This gives legal protection against copying by its competitors.

The protected time allows it to sell its products without direct competition. These help to recover the investment costs of designing, researching and developing the new products.

Intel | Using innovation to create competitive advantage