amdpost-blog

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POST 12 Promotion

AMD is active on social media. They mainly use Instagram to show off upcoming events, products, and PC showcases. This is an intelligent marketing strategy because most individuals who view these posts are enthusiast or people wanting to build a computer. This is their advertising objective, if they can see that AMD is showcasing impressive builds with their processors, viewers might be more willing to purchase their product. An example of this can be seen by their post from October 23rd stating “AMD House of the Ryzen Sun is a beautifully designed custom PC from @joericejones and features a Ryzen 7 1800x and a Radeon R9 Fury X” (AMD).

AMD is also indirectly advertised by reaching out to Youtubers, who spend their time benchmarking and discussing the latest news from relevant tech companies. They offer to send them products for review and testing. This allows people to see the product in action and compare to other existing products. This gives AMD huge exposure and could potentially bring in more customers, essentially word of mouth.

References

https://www.instagram.com/amd/?hl=en

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POST 11 Place (Distribution)

AMD’s distribution is selective. Processors are generally not a product for the average consumer. Most people who look for processors have done some research beforehand. Because of this, AMD would not benefit from intensive distribution. Instead, they distribute to retailers or online retailers such as Microcenter or Newegg. Additionally, Intel does not have to directly market to consumers. Often, companies who use Intel CPU’s will advertise them to show how powerful their computers are. For example, this Razer laptop, “The Intel Core i7 processor, 16GB of RAM and NVIDIA GTX 1060 graphics card provide high-end gaming performance in a compact package” (BestBuy). These descriptors are designed to catch attention and entice purchases.

References

“Razer - Blade 15.6’ Laptop - Intel Core i7 - 16GB Memory - NVIDIA GeForce GTX 1060 - 512GB Solid State Drive - Black CNC Aluminum.” Product Detail - Compare Page - Best Buy, Best Buy,

www.bestbuy.com/site/razer-blade-15-6-laptop-intel-core-i7-16gb-memory-nvidia-geforce-gtx-1060-512gb-solid-state-drive-black-cnc-aluminum/6252907.p?skuId=6252907

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POST 10 Trends/Pricing

Pricing can be difficult to determine early in the development of products. In order to be profitable, a company needs to set prices appropriately in order to break-even. Many variables need to be considered such as the cost of production, distribution, competition and more. Computers consist of several core components: the central processing unit (CPU), random access memory (RAM), motherboard (MOBO), graphics processing unit (GPU), power supply, hard drive, and chassis. Inelastic demand is generally prevalent regardless of how much prices change regarding most components because there is limited substitution.

Currently, AMD has about 17% of the desktop PC market share while Intel, their largest competitor, has around 79% (Statista). Intel is one of the most globally recognizable compiles in the world. Being ranked 46 by Fortune 500, Intel is also one of the most profitable companies in the world (Fortune500). AMD has to earn a good amount of market share if they are really going to compete with Intel.

Fortunately, AMD has been making massive leaps in innovation with their processors. To the average consumer, Ryzen CPU’s generally are comparable to those of Intel while being more affordable (CPUBenchmark). While certain applications and workloads would specifically benefit from either multithreaded or single threaded chips, overall the performance difference is negligible unless consumers are looking for specific a performance. This is potentially an opportunity for AMD to capitalize on being the better value company for the general consumer.

References

“x86 Computer Processors Intel/AMD Market Share 2012-2018 | Statistic.” Statista, www.statista.com/statistics/735904/worldwide-x86-intel-amd-market-share/.

“Intel.” Fortune, Fortune, fortune.com/fortune500/intel/.

“Price Performance Currently Available.” PassMark CPU Benchmarks - AMD vs Intel Market Share, www.cpubenchmark.net/cpu_value_available.html.

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POST 8 Brand Detail

AMD produces both consumer and business orientated products. These specialty products come in the form of processors and graphics cards. While this is essentially the extent of their product mix, the two product lines are very deep. On the consumer side, the Ryzen line of CPU’s consists of over 20 models alone. The Radeon RX Vega line has 6. While this variety may seem excessive to some, the goal is to provide as much diversity for customers to choose from depending on their needs and budget. This will allow a greater rate of satisfaction from consumers.

On the business side, they offer server and workstation processors from the Opteron and the new innovative 7nm EPYC lines. These processors are designed with heavy workloads in mind such as CAD design and Video Editing (AMD). These are obviously geared towards individuals with a specific task in mind.

References

“AMD Workstations.” AMD, www.amd.com/en/where-to-buy/workstations-cpu.

Alcorn, Paul. “CPU Hierarchy 2018: Intel and AMD Processors Ranked.” Tom's Hardware, Tom's Hardware, 26 Nov. 2018, www.tomshardware.com/reviews/cpu-hierarchy,4312.html.

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POST 7 Packaging

The packaging for AMD’s CPU’s is nicely designed. With their current line Ryzen, they utilize persuasive labeling by clearly displaying their red, white and orange logo against a matte grey background. Additional information is simple, showing the tier of CPU on the bottom right. The left side of the packaging shows a photo of the included cooler, and the right side presents the actual CPU circled by the same red, white and orange color scheme. The CPU’s heatshield clearly shows the model, brand mark and brand name. The entire product line follows this same packaging style. The product is also safe inside the packaging. The CPU is protected with cutouts of cardboard can securely hold the CPU in the center to avoid being damaged should the package fall on one of its corners. Additionally, the included cooler is surrounded by plastic and cardboard

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POST 6 Competition

AMD’s endeavors in both the CPU and GPU marketplace have created significant competition, being NVIDIA and Intel. NVIDIA is a fabrication company focused on research and development primarily on graphics processing units (GPU).

Intel is by far AMD’s biggest competitor. Similar to AMD, Intel is another fabrication company, specializing in the development of CPU and chipsets. They are the industry leaders, having products in almost all mainstream devices. Globally, Intel has had “a market share of around 15 percent over the past ten years” (Statista). However, Intel now appears to be a cash cow in the industry of CPU’s. Little innovation has been created over the last few generations of processors.

A secondary noteworthy competitor to AMD is NVIDIA. NVIDIA is an outsourcing company that focuses on the development of graphics processing units, GPU’s. They are the leading company in the world of GPU’s. AMD currently develops their own line of GPU’s, the Radeon series. NVIDIA’s market share is huge, “Steam's July hardware survey of millions of PC gamers revealed that 76.4 percent use Nvidia graphics cards” (Duggan). Given that GPU’s are primarily used for gaming, this is a massive indicator of what kind of impact NVIDIA has on the GPU market.

Gordon, Kyle. “Topic: Intel.” Statista, www.statista.com/topics/1877/intel/.

Duggan, Wayne. “Nvidia Is Winning the Graphics Card War.” U.S. News & World Report, U.S. News & World Report, money.usnews.com/investing/stock-market-news/articles/2018-08-23/nvidia-corporation-nvda-stock.

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POST 5 Target Market

The target market for AMD is PC enthusiasts. These types of individuals are typically optimizers, wanting to build their own custom computers using as high-end components as their budgets will allow. Based on the “2018 Sales, Demographic, and Usage Data Essential Facts about the Computer and Video Game Industry” of the Entertainment Software Association, the general demographic of gamers consists almost evenly men and women ages 18-35. Lifestyles vary among different age groups; benefit segmentation can be used to divide these groups. Typically, younger individuals would focus their computers on video games. While older individuals might be motivated by their careers to build a computer that would assist them in their line of work. Individuals with either a hobby or career in content creation would benefit greatly from the multiple cores AMD’s CPU’s offer. This is AMD’s product differentiation, they recognize this and even state, “Content creators that rely on strong hardware to power their video encoding, encrypting, Adobe Premiere Pro, and other creative software, will find Ryzen more capable” (AMD). These applications could work more quickly and efficiently because they could divide up the workload among the many cores.

With this information in mind, we determine that the primary target market are individuals heavily involved in their hobby or line of work and would like to benefit from AMD’s CPU’s. A secondary target market can also be determined, individuals interested in building a computer on a tight budget. These individuals are most likely younger and have a lower amount of disposable income who could benefit from AMD’s generally lower cost.

“Essential Facts About the Computer and Video Game Industry.” The Entertainment Software Association, www.theesa.com/ef2018/.

“Why Your Customers Are Buying Ryzen.” AMD, www.amd.com/en/partner/why-customers-are-buying-ryzen.

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POST 4 SWOT

Strength

·       Great value

·       Multicore application orientated

·       All unlocked processors

·       Recognizable name

·       Researches and development

·       Niche competitive advantage with Threadripper series CPU

Weaknesses

·       Lack of general integrated graphics

·       Lack of single core application orientated CPU’s

·       Substantial competition

·       Small presence in mobile devices

Opportunities

·       Produce more APU’s

·       Expand to mobile devices

Threats

·       Competition from Intel

·       Increase in environmental regulations

·       Increase in the cost of raw materials

·       Costs involved with research and development

I believe AMD should pursue product development, by developing more CPUs with integrated graphics like Intel. This would allow consumers to get away with not having a GPU immediately, which would save a lot of money. Currently, only two APU’s, CPU’s with integrated graphics, exist within the Ryzen platforms, “Now including models with advanced Radeon Vega Graphics built-in,” the 2200g and the 2400g (AMD). By having more options would allow for more consumers to potentially find a product that best fits their needs.

Additionally, AMD should consider diversification; by branching out to other markets like mobile devices and tablets. Currently, Qualcomm has a huge footing in those markets with phone SoC’s, “Qualcomm remained the largest SoC provider for smartphones in the Q3 2017 with 38% market share in terms of shipment” (Srivastava). This is a massive market considering most individuals have some sort of smartphone or tablet. With proper planning, AMD could introduce their own line of CPU’s designed with mobile devices in mind. These development efforts could result in huge growth for AMD.

“AMD Ryzen™ Desktop Processors.” AMD, www.amd.com/en/ryzen.

Srivastava, Shobhit. “Global Smartphone SoC Market Crossed US$8 Billion in Q3 2017, A Third Quarter Record.” Counterpoint Research, 2 Jan. 2018, www.counterpointresearch.com/global-smartphone-soc-market-crossed-us8-billion-q3-2017-third-quarter-record/.

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POST 3 Strategy

AMD’s is following a market penetration approach to their CPU development. Looking to improve upon previous generations of processors, they have developed the Ryzen line of CPU’s. These processors are aimed at the current consumer market of PC enthusiast, gamers, and developers. Involvement when deciding between hardware is typically very high considering the costs associated with building a computer. Because of this, PC builders might consider siding with more budget-friendly products.

This is where AMD currently shines. The competitive advantage AMD has is the value they offer to their consumers. For example, a Ryzen 2600x and an Intel i5-7600k are similar in tier and performance; however, the 2600x provides an extra 2 cores and is typically more inexpensive than the i5-7600k by around $40 (UserBenchmark). Furthermore, AMD includes a great stock cooler, meaning that individuals could save another $30 to $70 dollars on an aftermarket cooler. Additionally, compatible motherboards are consistent across AMD’s CPU’s with their AM4 socket types. This means individuals generally would not have to purchase new motherboards, should they decide to upgrade. However, they do not have a sustainable competitive advantage. Other companies could build a similar architecture to AMD’s Zen if they are hard pressed to do so and become substantial competition for AMD.

UserBenchmark: AMD Ryzen 5 2600X vs Intel Core i5-7600K. (n.d.). Retrieved from http://cpu.userbenchmark.com/Compare/Intel-Core-i5-7600K-vs-AMD-Ryzen-5-2600X/3885vs3956

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Post 2 Brand

Post 2 Brand

AMD is a company that specializes in producing computer processors and other similar technologies. They are most known for their CPU’s and motherboard chipsets; however, they have also developed other technologies such as the Radeon line of GPU’s. AMD’s annual sales in 2017 were around 5.33 billion US, clearly a very profitable company (Yahoo Financials AMD). AMD’s headquarters is in Santa Clara, CA with around has 8,900 employees overall as of June 2018 (Forbes). They follow a structure of product development, constantly producing new products geared to the same market. AMD’s mission statement is, “Because our customers’ needs are ever-changing, AMD understands the value of looking towards—and keeping pace with—the future. To help ensure we meet our customers’ needs today and tomorrow, AMD invests in state-of-the-art technology research many years in advance of first commercial use” we should expect to continuously see innovation (Makingafortune). Examples of these innovations include their Threadripper CPU’s. Acting as a niche competitive advantage, their Threadripper CPU’s fill the needs of individuals who require many cores and threads for either practical or novelty reasons.

 Works Cited

finance.yahoo.com/quote/AMD/financials?p=AMD. Accessed 9 Sept. 2018.

www.forbes.com/companies/advanced-micro-devices/. Accessed 9 Sept. 2018.

www.makingafortune.biz/list-of-companies-a/advanced-micro-devices.htm. Accessed 9 Sept. 2018.

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Post 1 Advanced Micro Devices (AMD)

I have chosen AMD because I believe they have become a big competitor in the market of personal computers. With their second generation of Ryzen processors, AMD is really giving leading companies like Intel a run for their money. This will hopefully spark further invocation in both companies and push for more product development in the current CPU landscape. Their competitive advantage is that they provide more cores per dollar, perfect for people who need to do intensive processes such as video editing or photoshop. AMD’s target market appears to be individuals with less purchasing power or those looking to take advantage of having multiple cores. Perhaps with the proper planning, AMD could come up with even more cost-effective CPU’s than they already have.