Intel Corporation Case Study
Excerpt from Case Study :
Intel was able to show the PC companies the ways in which their microprocessors would be beneficial and the PC companies knew that the products would be of high quality because Intel had a good reputation. Overall this type of strength has assisted the company greatly in promoting and selling its products.
6. Manufacturing Efficiencies- One of the major strengths of the company is that is has a close relationship with the enegineers that are responsible for building the equipment that Intel uses to manufacture its products. The case study explains
"Due to its scale, Intel enjoys considerable leverage over equipment suppliers. I some cases Intel will design a new machine itself and then have equipment vendors manufacture it. In others, Intel works closely with vendors on the design of a piece of equipment. As a result, Intel itself holds hundreds of patents relating to the process manufacturing semiconductors. Whenever equipment is developed specifically for Intel's requirements, vendors are generally prohibited from selling that equipment to other companies, such as AMD, for a given period (Intel Corporation: 1968-2008. p99)." The manner in which Intel goes about the manufacturing process increases the efficiency of the process. An efficient manufacturing process leads to costs decreases and increases in profitability.
1. Growth without direction- by the time that a new CEO was in place in 1998 the PC industry had matured not only in America but also abroad. In addition the internet had quickly become the new phenomenon that everyone was attempting to exploit. The new CEO believed that Intel's future would be dependent on the manufacture and sell of network related chips. Intel, however, failed to make any headway in this regard because the market fir these chips was already established and other companies were already deeply entrenched. The company also attempted to enter the market for phone chips where there was already stiff competitition including Texas instruments. This is an example of one of the weaknesses that the company experienced over the years in attempting to grow but not having the proper direction.
2. Loss of Corporate Direction/Poor Management- During the Barett Era it seems apparent that the company lost its direction. The company struggled to find its footing amidst rapid changes in technology and the demands of consumers. As a result, Intel experienced several problems. Chief amongst these problems were capacity constraints and product delays, these issues hurt the reputation of the company.
Additionally the company suffered from poor management. According to many in the industry the company had gotten to large and became to difficult to manage. As a result the company was not longer running as smoothly as it did under the prior CEO's. In some ways the company had lost its identity and was trying desperately to find it again.
External Opportunities and Threats
1. Widen Product Range- Intel is most know for its processors, however, the company does have an opportunity to expands its product line. Intel must use its innovative spirit to develop a wider range of products that can be utilized to meet the needs of today's businesses and customers. In the past Intel foresaw needs and created products to meet those needs before any other company. This is one of the reasons that the company has been able to maintain a competitive advantage for forty years. Intel has the know-how to expand into the development of products outside of the realm of what they are known for. The company could benefit greatly from widening its product range and this opportunity is available to Intel because it has a stable and popular brand. In addition the reputation of the brand may allow Intel to enter certain market segments that other companies have been shut out of.
2. Exploit New Market Segments-in recent years there has been an increase in the demand for products that are both mobile and provide users with access to various functions simultaneously. That is users want to be able to have the ability to listen to their favorite music, update their Facebook profiles and make a phone call simultaneously. In addition social media has become a popular way for people to keep in touch with loved ones and self-expression. These all are new market segments that Intel needs to exploit if the company wants to remain relevant in the future.
3. Apply New R&D skills in new areas- as
was previously discussed, one of the major strengths of Intel has been the research and development that the company has used over the years to create innovative and unique products (Neiger et al., 2006). If the company is to be successful in the future it must use research and development to once again create products that will transform the computer industry. This is one of the only ways that the company will remain relevant. Intel must find out what consumers need and want and create a product that meets those needs and the product has to be distinctly different from any product that is already on the market.
1. Downturn in the Economy. One of the primary factors is the economy. High unemployment rates and the number of companies going out of business are major issues for Intel. High unemployment rates means that people have less disposable income to purchase products such as computers that contain Intel components. A decrease in the sale of such items results in a decrease in the number of components that Intel is asked to deliver. This means a decrease in business for Intel.
In addition an increase in the number of companies going out of businesses or not being started because there is no access to credit also has a negative impact on Intel. This means that there will be a decrease in demand. Intel, like other companies may have a difficult few years ahead until global financial markets are more stable.
2. Change in Consumer tastes- at the current time the public is rather indecisive and consumer tastes are changing. Instead of laptops, people want ipads and smart phones. Both of these gadgets have applications that are similar to the one that are present on computers. To some extent Intel has been able to capitalize on this change in consumer taste but ut is likely that these taste will continue to change and many serve as a threat to Intel's bottom line if the company is not prepared for such change.
Evaluation of SWOT Analysis
The SWOT Analysis reveals that Intel is a stable and successful company that could benefit from exploiting various opportunities in the external environment. The companies strength lies in its ability to innovate dynamic products that have transformed computing capabilities. The company seems to have a keen understanding of the market and its place in the market and this has resulted in the existence of a company that is revered throughout the industry. As a result the company has garnered a great deal of loyalty and has a good reputation. In addition Intel has benefited greatly from manufacturing efficiencies. The company is able to not only design the machines that it uses but also patent these designs. This means that they have an automatic competitive advantage because other companies have to take additional time to manufacture the products.
The major weaknesses apparent in the company seemed to be in congruence with the leadership of Craig Barrett. Although it seems that he had good intentions, it seems that he did not have clear direction and as such the efforts of the company to expand failed. The market segments that he tried to expand into were already saturated and the companies that were already embedded in these markets were also well respected with good reputations. In addition the company had gotten quite large, which in and of itself is not a huge problem unless leadership no longer has the capacity to manage because the organization is so large. This was the case with Intel.
The SWOT analysis also demonstrates that there are several opportunities associated with Intel in the future. These opportunities include Widen Product Range, Exploit new market segments and Apply New R&D skills in new areas. Widening the product range is important so that the company will be more diversified. Diversification is important because it will protect the company if one expect of its business begins to decline.
The analysis also indicates that Intel must make a more concerted effort to exploit nee market segments. Even though the company has begun to offer product in market segments that it was not a part of in the past, these efforts must be more aggressive if the company wants to remain relevant. The analysis also asserts that new R&D skills need to be applied. The company must be aggressive in pursuing new areas of research and development. In the past the strength…
Sources Used in Documents:
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"General Company Information." [Online] Available at: http: / / www.intel.com/intel / company/corp1.htm
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