Reversing the AMD Fusion Launch
Posted: 1 Mar 2012
Date Written: August 22, 2011
AMD management needs to make a critical decision on the launch sequence of its next-generation technology called Fusion. The Fusion processor concept merges the central and graphics processing units (CPU and GPU) onto one chip -- yielding advantages in performance (particularly graphics related), power consumption, and suitability for new computer form factors (tablets, all-in-one machines, etc.). AMD planned to launch Fusion at the beginning of 2011 with a high-end processor, code-named Llano, to impress the industry and consumers with the best the technology could offer (suited for high-end desktops and notebooks), and subsequently to launch low-powered versions, code-named Brazos (suited for small notebooks and netbooks). However, the development of Llano suffered delays while that of Brazos was ahead of schedule. AMD's executive committee raised the possibility of reversing the launch sequence and going with a "Brazos First" strategy. The case describes the microprocessor industry, its main competitors (AMD and Intel), and the evolving world of PC selling and buying. The case further provides a host of market research that AMD conducted to better understand the market. Students need to address the advisability of a reverse launch vs. waiting to launch all versions together and whether AMD can advance its competitive position relative to Intel with Fusion. Students need to outline their marketing approach (sales effort, pricing, consumer marketing, etc.) in the event that a reverse launch strategy is pursued.
As part of the analysis, students need to take into account AMD's recent shift in branding approach: from giving a separate brand name to each new microprocessor to a tiered branding approach that would stay constant even in the face of new launches. The case allows for a deep examination of how a follower that faces a dominant industry player can use technology and marketing to compete effectively. It further poses the question of how firms should modify their branding strategy in light of perceived shifts in consumer behavior.
Learning Objective: To examine the connection between product decisions and marketing/brand strategy decisions in a competitive context.
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