In the 1980s, japanese competitors brought better-quality chips to the market at lower cost, threatening intel corporation's position and strategic plan regarding the production of dram (dynamic random-access memory) chips. when the functional managers at intel came up with the simple rule of producing whichever product delivered the higher margin, the front-line managers shifted intel's production capacity away from the lower-margin dram business to the higher-margin semiconductor business. this emerged as a consequence of the firm's resource allocation process.