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IIBMS – Trials and Challenges For Barrett at Intel


IIBMS – Trials and Challenges For Barrett at Intel


IIBMS – Trials and Challenges For Barrett at Intel

Intel Corporation is best known for its processors. The sign “Intel Inside” is familiar to most people using a computer. There is, for example, the Pentium 3 and 4 and the new generation Itanium. For servers and workstations, Intel produces Xeon. The colorful CEO Andy Grove led the company for many years. By 2001,  however, the Chief Executive Officer Craig R. Barrett faces many challenges, including criticism.

The new strategy of moving into new markets such as information appliances, communications, and Internet services was costly and so far less than successful. In fact, the move beyond its core businesses may have detracted from its core business of computer chips. These new directions resulted in frequent reorganizations resulting in organizational uncertainties for the managers. While some think that the frequent changes were necessary to adapt to new situations and to keep the organization agile, others disagree.

Barrett’s leadership and his moves into various directions is quite different from Grove’s carefully crafted strategy that focused on chips. Barrett’s personal strengths lie in manufacturing. He invested heavily in research and development. But new products such as the Itanium require several years before they show results, and Barrett has only a few more years before his retirement. Investing in new manufacturing technologies with the aim of achieving virtually automated plants results in the reduction of manufacturing costs of chips. But the PC market is stagnated in the early 21st century and wireless communication and cell phones are becoming important in the market. In the cell phone market, for example, Motorola and Texas Instruments are developing new digital signal processors and Intel would have to work hard to catch up. A key to success of Intel may be whether the company can become an important player in the wireless market. Barrett made a number of costly acquisitions, including Level One Communications. But the question remains if the heavy investments in new technologies will result in profitable businesses. This may determine the legacy of Craig Barrett.


  1. What is your assessment of Barrett’s performance and his vision for Intel? Is he the right person for the job at Intel?
  2. What are some problems associated with frequent reorganization?
  3. What are the pros and cons for focusing on the distant futures and the heavy investments in new technologies?

IIBMS – Trials and Challenges For Barrett at Intel

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