Matrix Semiconductor Inc: Tackling Challenges of Strategic Dimensions

In the spring of 1999, Matrix Semiconductor was a young start-up on the verge of what the founders considered to be a major technological breakthrough. For more than a year, the company had been focused almost exclusively on the invention of its technology ¾ 3-D semiconductor memory chips that would offer acceptable performance at selling prices significantly lower than competitive and substitute products available in the market. By building its chips “up” instead of “out,” the company expected to create a product that was 1/10th the cost per bit of other non-volatile semiconductor memories with performance characteristics better than disks. As the company neared the completion of its first prototype, the founders recognized the need to transform invention into innovation by creating a more holistic business strategy for the organization. In the case, Director of Marketing Dan Steere recently joined the Matrix team. In his new role, he was asked to help define the practical parameters of a 3-D product, choose what markets to pursue, and decide on an appropriate business model for the company (drawing on input from the rest of the Matrix team). Through an evaluation of the alternatives available to the company, the case explores the importance of strategy and strategic decision-making, even in the early phases of a company’s existence (when it must be done intuitively in a dynamic and unpredictable environment). It also highlights some of the success factors and pitfalls young companies must address as they prepare to stop focusing solely on the definition of a business opportunity and begin focusing on the development of a legitimate new business.