Question: Read the following case study and answer the question. In his memoir, Only the Paranoid Survive , Andy Grove recalled a tough dilemma he faced
- Read the following case study and answer the question.
In his memoir, Only the Paranoid Survive, Andy Grove recalled a tough dilemma he faced in 1985 as the president of Intel: whether to kill the companys line of memory chips. Intels business had been built on memory. For a time, infact, the company was the worlds only source of memory, but by the end of the 1970s, a dozen or so competitors had emerged. Meanwhile, a small team at Intel had developed another product, the microprocessor, and in 1981 the team got a big break when IBM chose Intels microprocessor to be the brain of its new personal computer. Intels team scrambled to build the manufacturing capacity it would need to produce the chips.
At that point, Intel became a company with two products: memory and microprocessors. Memory was still the dominant source of the companys revenue, but in the early 1980s, the companys competitive position in the memory business came under threat from Japanese companies. Intels customers began to rave about the quality of the Japanese memories. Meanwhile the market share held by Japanese companies doubled from 30% to 60%.A debate raged inside Intel about how to respond to the Japanese competition. One camp of leaders wanted to leapfrog the Japanese in manufacturing. They proposed building a giant new factory to make memory chips. Another camp wanted to bet on an avant-garde technology that they thought the Japanese couldnt match. A third camp wanted to double down on the companys strategy of serving specialty markets. As the debate continued with no resolution, the company began losing more and more money. The microprocessor business was growing rapidly, but Intels failures in memory were becoming a drag on profits. It was a grim and frustrating year. During that time, the company worked hard without a clear notion of how things were ever going to get better. After months of fruitless debate, and much deliberation, Grove insisted that Sales force tell their customers that Intel would no longer be carrying memory products. Since that day, Intel has dominated the microprocessor market.Andy Grove made the right decision.
What do leaders usually do when they face a chronic problem of indecision? No doubt Andy Grove had been compiling his pros-and cons list whether to exit the memory business for many years. Do you think that Intel got caught in analysis paralysis. Why does analysis paralysis occur in decision-making processes?
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