How Intel killed its competitors at the strategic inflection curve
In 1984, Intel Corporation was a leading producer of memory chips. But as Japanese competitors like Toshiba and NEC came to the US, Intel started to lose its market share.
This is where the inflection curve of a business typically happens: When a new player suddenly changes the market, and you start bleeding badly.
The Japanese were cheaper and better. Intel tried to compete harder. Some executives believed Intel had to build a new factory. Make cheaper memory chips.
But Andrew Grove, then CEO of Intel, slowly started to realize that memory chips had no future. Grove, the third employee at Intel, was a visionary who had a knack for seeing where the industry was heading before others did. He was known for his pragmatic approach to business and his dedication to innovation.
By 1985, Grove decided that Intel had to move towards microprocessors, which was risky. While microprocessor chips were becoming increasingly important parts of the computer revolution, they weren’t considered as crucial as today.
To middle managers of Intel, Grove’s pivot to microprocessors was ridiculous. The tech industry paid him no attention either.
Grove’s move didn’t yield results immediately. Microprocessors weren’t profitable for a few years. But Grove knew what he was doing. When the personal computer (or PC) started gaining popularity in the 90s, Grove’s move turned into a goldmine for Intel. Today, the rest is history.
Grove called these make-or-break moments in the life of a business “strategic inflection points.”
“A strategic inflection point is a time in the life of a business when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”
What businesses and public relations agencies can learn from the strategic inflection point.
Whether you’re a CEO, Public Relations agency owner, or an individual who’s managing your career, you must be aware of strategic inflection points.
When something changes in the environment, the question is: How do you react?
As the tech industry in the 80s started to see more competition and new products, Intel decided to pull the plug on its main product and create something different
Likewise, many industries including the advertising and public relations industries are going through major changes. Digitalization is changing the game; clients are demanding fresher thinking as competition heats up, and there’s a revolution of rising consumer expectations.
Businesses and PR agencies must learn to pivot quickly, while still retaining their core value systems. Because the fundamentals of success don’t change. But the methods do.
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