Shaped Growth Innovation Diffusion

case study

Intel Supply chain management

One of the worlds largest manufacturers of computer chips, Intel needs little introduction. However, the company needed to reduce supply chain expenditure significantly after bringing its low-cost Atom chip to market. Supply chain costs of around $5.50 per chip were bearable for units selling for $100, but the price of the new chip was a fraction of that, at about $20.

The Supply Chain Cost Reduction Challenge: Somehow, Intel had to reduce the supply chain costs for the Atom chip, but had only one area of leverageinventory.

The chip had to work, so Intel could make no service trade-offs. With each Atom product being a single component, there was also no way to reduce duty payments. Intel had already whittled packaging down to a minimum, and with a high value-to-weight ratio, the chips distribution costs could not be pared down any further.

The only option was to try to reduce levels of inventory, which, up to that point, had been kept very high to support a nine-week order cycle. The only way Intel could find to make supply chain cost reductions was to bring this cycle time down and therefore reduce inventory.

Read the case above, then answer below questions

1- The diffusion and adoption of new ideas and new products often follows S-shaped

growth patterns. What are the positive feedbacks that generate the initial exponential?

growth of a successful innovation, and what are the negative feedbacks that

limit its growth?

In light of above statement, assess how INTEL could achieve their goals and apply their strategies with help of S-shaped growth. (40 MARKS)

2-Elaborate on logistic model & Bass model, showing how could help INTEL to reach their goals (20 MARKS)

3-As a consultant show how you can help INTEL to regain its market leader position (20 MARKS)