Added Value

INTEL CASE - Added Value

I'd like to illustrate about some of the key events that have been crucial for Intel to remain as market leader and increase their profits by the creation of added value. Those key events are:

1. The development of the Intel Inside campaign

2. The creation of Intel Capital

3. Creation of new businesses areas

1. THE DEVELOPMENT OF THE INTEL INSIDE CAMPAIGN.

Intel found an innovative way for partnering with the computer manufacturers, providing them coop funds to pay part of the cost of their marketing campaigns as an exchange for they to use the "Intel Inside" brand in both their advertisement materials and their computers.

This campaign was launched in July, 1991 and it helped them to increase revenues since according to the information in Exhibit 1, Net Revenues increased from US3.9 billion in 1990 to US4.7 billion in 1991. It also helped to increase shareholder value since Intel's market capitalization increased from US7.4 billion to almost US10 billion in the same period. This growth indicates the value of Intel's inside campaign. Also, according to the case, "Intel Inside" became one of the world's most recognized brands.

Before this campaign, computers chips were something that most customers didn't care about, but with this campaign, Intel was able to build a consumer brand around something that used to be perceived as a commodity. Therefore, this campaign helped Intel

It is also important to mention that the legacy of this campaign still remains today, helping to maintain Intel's positioning as a brand that delivers high quality and very reliable products.

All in all, this event helped Intel not only to increase sales but also to increase customer's willingness to pay.

2. THE CREATION OF INTEL CAPITAL

Intel Capital (IC) was another key strategy that Intel implemented to increase their creation of value. It was a venture capital firm focused on investing in companies that could bring not only financial returns but most importantly, complementarities that helped Intel to stay unique. The strategy was successful in both objectives. On the financial side, IC delivered billion dollar returns to Intel since in 2002 (12 years after its creation), IC had investments in nearly 400 companies and despite the market downturn that occurred in 2000-2002. In addition, IC provided Intel with a privileged access to new technologies that contributed to their strategic business initiatives. For instance, in 2002 IC targeted $150 million through its Intel Communications Fund on Wi-Fi technologies and serviced focused to accelerate the market ecosystem for mobile