Chapters 1 – 5

1. Only The Paranoid Survive Andrew Grove Chapters 1 – 5 Amanda Stampke Taylor Studzinski Kevin Tanojo Justi Tipton Dan Vandehey

2. Chapter 1: Something Changed • Andrew Grove – CEO of Intel • Floating Point Flaw in Pentium • Occurs every 27,000 years • Cost company $475 million • Extreme customer response • Intel changes policy, design & structure • Strategic Inflection Point • New focus on upper management

3. Chapter 2: A “10x” Change What such a transition does to a business is profound, and how the business manages this transition determines its future.” ▪Six Forces Affecting Business -existing competitors -complementors -suppliers -possibility that your product -customers or service can be delivered -potential customers in a different way

4. Chapter 2: A “10x” Change ▪ A 10x Change: this is where one of the Six Factors that Affects Businesses is so strong that it has the potential to completely reconstruct your company. ▪Strategic Inflection Point: the exact point where the company shifts from the old ways of business to the new, never to change back again. This point can either make or break a company. “Things are different. Something has changed.”

5. Chapter 3 Main Point: The Morphing of the Computer Industry - The Basis of the Computing and the Competition changed. Vertical Aligned Industry VS. Horizontal Aligned Industry. Three Rules for the Horizontal Aligned Industry.

6. Vertical Aligned Diagram

7. Horizontal Aligned Diagram

8. Vertical VS Horizontal Vertical:This is where company controls every operations of their products from the chips implementation to the sales distribution. Plus: The company developed its own chips, hardware, software, sold and serviced by its own people. Minus: Customers stuck with the computer companies if there are problems or errors on the computers. Have to fix the entire parts if a problem occurs on a single part.

9. Vertical VS Horizontal Horizontal:This is where company try to focus on a single aspect of the Industry. Plus: This causes reducing cost on the company so that they can focus on the mass production and distribution of their products. Horizontal Aligned gives opportunity to an unknown industries to become the major corporations, because of the lessen cost to enter the market.

10. Three Rules of Horizontal 1. Don’t Differentiate without a difference 2. In this hyper competitive horizontal world, opportunity knocks when a technology break or other fundamental change comes your way. 3. Price for what the market will bear, price for volume, then work like the devil on your cost so that you can make money at that price.

11. Strategic Inflection Points are common Not limited to the high-tech industry, or “the other guy” They offer promises and threats • There are winners and losers after every strategic inflection point • Winners and Losers are determined by their response to the 10X force and by their ability to adapt Chapter 4: They’re Everywhere “Adapt or Die”

12. Chapter 5 :Why Not Do It Ourselves • Intel had been a memory chip company since the 1960s • Japan, under selling by 10%, began to control the market • Intel realized that it would have to close the memory chip line, and focus on microprocessors • When they decided to close the line, many wondered what took so long.