Q1 - What would it take for AMD to see a significant increase in its Market share in processors used in Desktops and

notebooks? How can success of Opteron in server segments be leveraged to other segments? Competitive Products in all segments: - AMD has diversified its product line because Intel crashes the prices in the segments where AMD competes and keeps margins and prices high in other segments. - Now AMD offers a full-line of 64-bit processors with its Athlon 64 and Athlon 64 X2(Dual core) desktop processors and Turian mobile technology Project MAID: - Getting IBM on board as corporate will only buy from recognized OEMs - Getting Microsoft on board (Using Linux as competitor) - Getting Dell the market leader in desktops and notebook segment. Strategies: - It would take a lot for AMD to catch up, as the gap in terms of market share between the two companies is huge. - Except in very specialized niche markets, Intel has kept a significant leadership in every segments, including the server microprocessor market where AMD best performed. - In order to gain significant market share in processor used in corporate desktops and notebooks, AMD should focus on differentiating its products by giving them an added value that would be valuable to end users. - Creating new Market space 1. Reduce: power consumption and delays to be reduced 2. Eliminate: eliminate Intels monopoly and existing system of sharing profit dollar to partners. 3. Raise: performance per watt to be increased beyond industry standards 4. Create: Create entirely new methodology to innovate by customer centric approache and thereby allowing mass customization - Pricing: Smart pricing to change image of AMD as a cheap solution but still offering high performance products at competing price. Using penetration pricing once sales volume increase.

- Innovations (Looking across time): continuously innovate to outperform Intel in future and develop a roadmap to beat Intel in bringing new product offerings to Market. unlock innovation and create new market space -Looking across chain of buyers: Developing relationships with other key influencers including system resellers that built computer systems from scratch and other system integrators. - Advertising the savings: Advertising the savings achieved due to power savings by microprocessors. (Exhibit 13) B) Using Opterons success: 1. Server- based computing: AMD can push its server- based computing methodology wherein employees PC will become a blade server in the data center instead of desktop with its own processor. This would improve security, maintenance and manageability. As per exhibit 10 it will significantly reduce the cost. 2. Using buzz created by Opteron: 3. Using the industry relations created by Opteron: 4. Keeping the brand Opteron for desktop and notebook chips

Q2 AMDs Power Campaign and is the value proposition it highlights compelling to end users?

According to survey conducted by AMD in 2005 a. Few companies sought to lower operating costs by targeting data center power consumption and cooling b. Power consumption and cooling in data center were significant drivers to affect server purchase decision Thus in order to address this need of corporate and to highlight how AMDs server provides these power consumption benefits, Power campaign was launched. - Main objective was to make IT decision makers aware of the performance per watt as a metric on which the purchasing decision should be based - To communicate these ideas AMD ran advertisements on billboards. In airports and in publications such as wall street journal.

- Advertisements highlighted the additional energy costs incurred worldwide by not using energy based servers. - After extensive discussions, group has concluded that Value proposition was compelling to end users as advertisements highlighted the additional energy costs incurred worldwide by not using AMD based servers. - The messages were compelling across the product line as the buzz created by this campaign was used to show the superiority of AMD in performance per watt metric. - According to Exhibit 14: Value proposed to end user is as follows - Power used per hour (Watts): Xeon MP based system 250*800 200000 Watts 200KW $26 per hour Opteron based System 125*760 95000 Watts 95KW $12.35 per hour

So it showed the operating cost in case of Intel was almost double. And comparative data above highlights the value proposition for end user. As result of this and many other strategies AMD server microprocessor average selling price went up along with its share prices after 2005 (Exhibit 15b and 16). So results also show that the value proposition was compelling to end user.

Q3 Is AMDs customer centric approach is source of advantage over Intel? Will it yield commercially visible innovations that are dramatically different from Intel? Need for customer centric approach: - Customer centric approach means partnership with customer to develop new solutions. AMD is committed to meet deadlines to fulfill customers needs and expectations - Culture of customer centricity is most sustainable in business, as business knows what customers needs are and the products to meet their demands could be made. - The goal of marketing is to assess the needs of customers in order to propose a product that fits the best their expectations. As said by Ruiz in the case It is very difficult to define what is customer centric, because everyone says they are customer focused these days. However, AMD strategy seems to go beyond the simple will to fulfill what is expected to be the need of an average customer in the industry.

Initiatives: - Customer Retention: What AMD really intends to build is trust based, long term relationship with their customers. They want to listen carefully to their feedback and make developments that are the result of those feedbacks. - To achieve this ambitious project the company has undertaken a big reshaping of their customer service processes by creating go to market groups such as the Commercial business group or the Commercial Channel Council which are really close from end users and brainstorm with them before reporting to technical teams, also called product group. - This allows AMD to create a real added value around its product line by fulfilling end users needs as accurately as it can be. Here is definitely a source of advantage over Intel as this strategy really helps to assess customer preferences over the long term and to observe the evolution of market needs - Initially customers took time to change as per customer centric approach but gradually it became a great source of advantage for AMD with its customers blossomed. - AMD also created commercial channel access programme in October 2005 to increase collaboration & innovation with AMD64 ecosystem. The Web based self service program gave integrators, VARs and distributors access to channels specific marketing support including newsletters, product information and white papers. Expected results: - AMD isnt powerful enough to create a revolution within the industry. However, AMDs customer centric approach has chances to yield commercially viable innovations. - By understanding better end users, the company can optimize the technology and adapt the products efficiency in order it fits the customers exact needs. Even though Intel and AMD are likely to have comparable technologies in terms of power efficiency and performances, AMD appear to be more willing to put themselves in the shoes of their customers. - With their customer centric approach AMD tries to understand their customers environments, challenges, etc. and they build together ways to implement the microprocessors technology at their maximum power with the help of feedback mechanism. It results in a better efficiency thanks to a greater products adaptability and a better understanding of the product by end users. Torrenza: - The perfect example is given with the Torrenza initiative that aimed to completely open to customers the architecture of AMD Opteron microprocessor. -This was a risky bet by AMD, but it definitely had the potential to create viable innovation by giving the keys to customers

- Innovation involves several different levels. Not only innovation in performances matters, but also innovation with products flexibility, with feedbacks and customer relationship processes. All those innovations are commercially viable even thought they dont give a dominant position to AMD, they contribute to strengthen the companys market shares and to its slow but continuous growth. Its already looking good: - AMDs server average selling price and stock price was increasing gradually and it was bettering Intel. After the customer centric approach can into action. AMDs overall market share grew to almost 22% on Q2 of 2006.