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ASSIGNMENT – 1
Case Study Analysis
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9/15/2009

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September
ASSIGNMENT – 1
15, 2009

Introduction

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Technological companies have been evolving since last few decades. Advancements in
the technology and radical innovation have forced these sorts of companies to upgrade
themselves rapidly with the changing environment. Advance Micro Devices (AMD) is

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one of these companies who are in the business of silicon and software since four
decades. AMD is founded in 1969. It is a worldwide recognized company which is
passionate about innovation. It is a global provider of innovative graphics, processors and

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media solutions. The main objective of the AMD is to become best energy-efficient that
will provide visually realistic solutions. Its revenues have grown up to $5.7 billion
(approx) in year 2006 (AMD Official Website). Some of its major competitors are ARM
Holdings, Intel Corporation, and NVIDIA.
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Components of the Strategy:

There are five major components of a strategy which are; scope, goals and objectives,
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resource development, identification of sustainable competitive objective and synergy.
[Walker, Mullins, & Larrehe, 2008]. There are many strategic challenges that a company
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has to face. Especially, technological oriented companies have to be flexible and quick in
their strategy making and implementing in order to keep them updated with the
environments. In this kind of industry, each company struggles hard to attract the
customers with their new technological product and features.
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AMD always tries to focus on planning exact and well thought out strategies by making
the maximum use of five components of strategy. The scope for AMD is clearly
identified and circumstances and environment suggests that it is right to assume the scope
of emerging technologies and hence of AMD. First, AMD started with only a short
product line and at the time passed, it jumped into diversification and more innovative
products that caused reasons for AMD’s higher scope.

Advanced Micro Devices 2


September
ASSIGNMENT – 1
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The success of every organization is largely dependent on how clearly it defines its Goals
& Objectives. AMD has clear cut goals and objectives to serve its valued customers.
AMD has an objective i.e. AMD does not follow the principle “technology just for the

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sake of technology”. It has always an objective of fulfilling people needs ahead of
technology. Throughout its journey, AMD always focused on developing its resources in
order to tackle any disturbances and hurdles that fall into its way to success. Also the low

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cost resources for manufacturing were of great interest to AMD.

The strategies made are consistent with environment and have the flexibility to change
along with a change in environment. AMD has the belief that the strategy planned should

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be sustainable and should create a competitive advantage for the organization. So when
planning the strategy, these points grab attention of planners.

While talking about synergy, AMD does not seem to be comfortable about sharing its
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resources or technologies across the industry. However, AMD and NVIDIA have some
sort of synergies as they both are working on the project in which graphic cards by the
NVIDIA could get compatible for AMD new silicon boards.
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Corporate Strategies:

There is a hierarchy of strategies i.e. corporate level strategies, business level strategies,
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and functional level strategies [Walker, Mullins, & Larrehe, 2008]. While formulating
corporate strategies, managers should coordinate the activities of business units or
separate legal entities. The primary focus of these strategies is organization’s scope and
resource development [Raymond & charies show, 2003]. The main purpose of these
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strategies is to address the questions like what business we are in. what business we
should be in? How much resources should be allocated to each business to achieve
organizational goals? Corporate level strategies includes; corporate mission, corporate
goals and objectives, corporate development strategies, and development of resources
[Walker, Mullins, & Larrehe, 2008].



September
ASSIGNMENT – 1
15, 2009

Each organization wishes to maintain an edge or distinctiveness over its competitors.
These competitive edges may be like human resources strength, financial and
technological resources etc. AMD has taken initiatives in its corporate strategies by

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Digital Inclusion, Fair and Open Competition, and has adopted modern and latest
manufacturing technologies. The strategies for growth of business are made at corporate
level. To measure the growth of a company the critical factors are sales of the company,

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unit sales and most importantly percentage change in sales [Raymond & charies show,
2003].

In the nutshell corporate strategy is all about making a distinctive position of your

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company in the clusters of competitors. This leads the company to the comparative
advantage. Same situation is with AMD, they are providing high quality distinctive
products to their employees.
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"Only two companies in the world develop and deliver x86 microprocessors in volume.
Only two companies in the world deliver leading-edge 3D graphics. Only AMD does
both."
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- Dirk Meyer, AMD president and CEO

This was the message by the CEO and the president of the AMD that shows their basic
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corporate struggle to get a comparative and distinctive advantage over the other
companies. They also consider that world is world is focusing on the major changing
environment. And they try to position them to have maximum benefits because, they
have developed a motto like, 'when you think value, you think AMD.' [Official website
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AMD]

Business level Strategies:

The focus of business level strategy is on the competitiveness of business units to its
industry. These strategies strive to find out sustainable competitive advantages for their



September
ASSIGNMENT – 1
15, 2009

business units. AMD is using low-cost strategy as it has low cost sources of supply and
modern technologies which gives it a competitive advantage over its competitors.
Further, the business level strategy takes into account “scope”. Which market segments to

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be compete in? And what products should launch in which segment to give a hard target
to competitors? [John A. Byrne, 2006] Business level strategies include business unit
objectives, competitive strategy, and development of resources [Walker, Mullins, &

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Larrehe, 2008].

AMD has developed many strategies for its business units, due to greater strength in
Human Resources; it has developed the strategy of Superior Customer Services. And, to

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cope with its major competitors, AMD uses the Low-Cost Strategy by minimizing its
costs of production and marketing. As the discussion with the Bob Rivet and AMD's
CEO Dirk Meyer about the current strategy plans for the company they said that we have
plans for conversion to 45nm manufacturing technology. “We'll be fully converted in first
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half of next year,” AMD's CEO Dirk Meyer. [Traian Teglet, 2008]

Marketing Strategies:
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Market strategies are responsible for effectively allocating the marketing resources for
attaining the organization’s objectives within a specific market segment. These strategies
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help to identify target markets for particular products [Ronald, Katharine, Valarie, 2004].
The organization also maintains a competitive advantage by offering a proper marketing
mix (4Ps) according to the needs of customers or potential customers in that targeted
market. Some of the marketing strategies includes; marketing strategy for product,
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market entry for new product, R&D strategy and plans, human resources strategy and
plans and operations strategy and plans [Philip & Gray, 2008].

The business level strategies are vital for success of Strategic Business Units (SBUs).
SBUs at AMD are delivered with objectives known as business unit objectives. Each unit
considers those objectives and gives its maximum to achieve those objectives. Each SBU
also needs sources for conducting its part of business. These strategies also underlie the



September
ASSIGNMENT – 1
15, 2009

allocation of resources to these business units [Jay B. Barney, 2005]. AMD has a separate
Head for managing these strategies and amending them according to changing needs.

Conclusion:

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The factors influencing strategies are; competitive factors of competitors, development in

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industry, globalization, and information technology (Walker, Mullins, & Larrehe, 2008).
Sustaining in such a competitive industry is not an easy task. AMD is dealing quite well
with these factors. Its efficient R&D department is one of the reasons of its presence in
such an industry for decades. Its global presence and quality of products are growing its

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revenues at a steady pace. Overall, AMD has implemented quite good growth strategies
that are aligned well with the corporate, business and market level strategies. The key to
its success is that they are flexible and quick and that is why it is one of the largest
companies providing high profiled technological services over the globe.
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September
ASSIGNMENT – 1
15, 2009

Works Cited

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1. Philip Kotler and Gary Armstrong (2008), Principles of Marketing, Prentice hall

2. Raymond miles and charies show (2003), organizational strategy, structure and

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process, McGraw Hill

3. John A. Byrne (2006), AMD standouts, business week April 10,2006, pp. 84-143

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4. Walker, O. C., Mullins, J. W., & Larreche, J.-C. (2008). Marketing Strategy: A
Decision-Focused Approach. New York: McGraw-Hill.

5. Jay B. Barney (2005), firm resources and sustained competitive advantage,
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journal of management 39, pp. 96-123

6. AMD Annual Report 2008, available at http://phx.corporate-
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ir.net/phoenix.zhtml?c=74093&p=irol-reportsannual, accessed at 13/09/09

7. Interview with Mr. Utz-Hellmuth transcribed on knowledge@wharton (2005),
available at www.knowledge. Wharton.upenn.edu
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8. Ronald T. Rust, Katherine N. Lemon, and Valarie Zeithaml (2004), return on
Marketing: using Cuustomer Equity to Focus Marketing Strategy, journal of
marketing 68, pp.109-127
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9. Management Strategy and Analysis, available at:
http://www.amd.com/us/aboutamd/corporate-
responsibility/strategy/Pages/management-strategy.aspx, accessed at 14/09/2009

10. Traian Teglet, (2008), AMD Talks About Current Business Strategy,
http://news.softpedia.com/news/AMD-Talks-About-Current-Business-Strategy-
95889.shtml, Accessed at 13/19/2009



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Case study assignment technology strategy - www.topgradepapers.com