2. Intel Corp is an American company famed for making
semiconductor chips, microprocessors, network
interface controllers, flash memories, graphic chips
and other components found in many computers and
mobile phones. The company is valued at more than
US$ 54 billion and employs more than 100,000 people
(Intel Corp., 2012).
3. ANALYSIS OF INTEL CORPORATION USING THE
PORTER’S 5 FORCES MODEL
The first of the five forces affecting Intel Corp’s business is supplier power. The basic
material used to make semiconductors is silicon which is a constituent of sand and is
abundant in nature. Suppliers cannot alter the prices of this primary commodity to significantly
influence Intel Corp’s business because the company can afford to have several suppliers.
Other suppliers provide the metallization required between the silicon layers and the plastics
for the packaging of the fully manufactured processors. These tool are abundant and Intel
Coro can afford to have several suppliers at considerable prices.
The competition rivalry is another force that affects businesses. Intel Corp continues to
enjoy large market shares with minimal competition. In 2011, the company commanded 79.3%
of the PC processors market and 84.4% of the of the mobile PC microprocessors. These
figures were however indicative of 2% drops from the first quarter of the year (Intel Corp.,
2012). The decline in market share could be attributed to increased competition from
companies such as Toshiba, Samsung, Texas instruments, STMicroelectronics among others.
These companies sell their products at reduced prices and conduct aggressive marketing.
Competition is therefore one of Intel Corp’s biggest challenges in their quest to retain and
increase their market share.
4. Buyers’ power is the third force that impacts on businesses. Buyers of Intel Corp’s
products include computer and mobile phones manufacturing companies such as
HP, Dell, Samsung, Acers, Nokia, and Alcatel among others. The diversity of its buyers is
advantageous to Intel Corp because it makes it hard for them to set or demand for their own
prices. However, several of these companies such as Samsung and Toshiba are now making
their own processors and can therefore demand for lower prices and set the terms of business
for Intel Corp. This is because they have several suppliers for the same products Intel Corp is
providing.
The fourth force affecting businesses is the threat from substitutions.
Currently, computers and other technological devices are principally reliant on processors to
function meaning that the threat of substitutions to Intel Corp’s business is minimal.
However, recent advancements in technology could usher into the electronics market other
improved devices that may become threats to the current processors.
The five force affecting Intel Corp is the threat of new entry products. In the wake of
meteoric advancements on the technological front, the threat of new products to compete with
Intel Corp’s products is rife. The biggest threat comes from counterfeit processors that
damage the reputation and business function of Intel Corp. Intel being the market leader
suffers the risk of being attractive to counterfeits who introduce “new” and ineffective products
to the detriment of Intel Corp.
5. STRATEGIC GROUPS
Symantec and Intel’s joint strategic alliance runs across many groups and disciplines.
It includes cooperation in development, thought leadership, industry
solutions, marketing and sales.
Together, this partnership delivers solutions that can directly address today’s IT
business issues and help individuals and organizations to prepare for the future. From
manageability and security to endpoint virtualization and data protection, these benefits
from optimized hardware and software help increase productivity, reduce costs, and
streamline IT management.
Intel IT is engaged in developing a broad, ongoing sustainability strategy to help Intel
consume fewer resources and emit less waste. In analyzing the business case for IT
sustainability, we identified the bottom-line benefits and defined the metrics that
enabled us to effectively reduce our environmental footprint. Intel IT is focused on
developing sustainable practices that will allow us to lower our resource consumption
and produce less waste while saving resources throughout the company.
6. TO DEVELOP SUSTAINABLE IT PRACTICES
ENCOMPASSED:
• Establishing a roadmap and baselines.
• Addressing consumption and waste.
• Setting challenging goals.
• Redesigning our business processes.
• Encouraging participation.
7. INTEL IT STRATEGIC PLANNING: ALIGNING IT
WITH BUSINESS
• Intel IT has developed and implemented a new approach to
strategic planning that better aligns our activities with those of
the corporate business groups. By involving business groups in
our planning process, integrating the process with the corporate
planning calendar, and refreshing our plans frequently enough
to keep pace with rapid changes in the industry, we can stay
ahead of the technology curve and at the same time achieve the
highest return possible on every initiative and focus area. We
can also position ourselves to better support our internal
customers and focus our limited resources on the right
investments.
9. SECURITY - DELIVERING SECURITY THROUGH INNOVATIVE
TECHNOLOGIES
Symantec and Intel bring security solutions to customers who need to protect the PCs
they manage. Intel provides powerful and unique security options at the hardware level
with PCs powered by Intel® Core™2 and Intel® Centrino processors with vPro™
technology. Symantec software, combined with Intel® hardware, delivers additional
security enhancements in PC management, backup and recovery, and availability. This
provides comprehensive protection of business interactions, critical information, and IT
infrastructure in security, endpoint, messaging and application management.
Sustainable – Green IT
Symantec and Intel promote and provide the use of energy efficient hardware,
software, services, and best practices that reduce environmental impact by
enabling IT to run more efficiently, conserve power, and cut energy costs:
10. ANALYSIS OF MACRO ENVIRONMENT
A political, economic, social and technological (PEST) analysis would show how
the external environment of the Intel firm has managed to affect the company
developments.
Political ~ In the semiconductor industry, competition regulation is low and
corporate and individual taxes are major considerations. Further, due to the
increasing internalization of semiconductor firms, they are being subject to
international trade regulations and consumer protection has also become a
major consideration. This has further affected the potential entrants to the
industry, and has led to Intel focusing on having their research and development
on environmental management to protect their consumers.
11. Economic ~ The economic growth of target market is fairly positive, in the
semiconductor’s industry case; the target market is the electronics industry. Industry
growth is very promising and, coupled with exchange rates being relatively stable,
promises a wealth of opportunities for those who are already established in this
industry. With the increased pace in the change in technology spurred by more need
for higher and more advanced technology, the demand for the semiconductor
industry is stronger than ever. This presented a whole avenue of possibility for Intel
to develop their products at a rate which will keep up with the demands of the
market.
Social ~ Even income distribution among target market is observed in this
industry and main consumers are large companies. As the nature of the industry in
which Intel is involved in is a very dynamic nature where change and innovation are
everyday words, there exists the need to constantly be sensitive to the change in
market demands and preferences, as it is the key to maintaining market leadership
in this type of industry.
12. Technological ~ A very fast technological transfer and a very fast rate of
technological obsolescence is a characteristic of the industry. A unique aspect of
the semiconductor industry is that prices for products tend to decrease over
time. Not only does the price fall for a given integrated circuit, but as the
complexity of the chip increases, the price per electronics function decreases
from product generation to generation as more and more functions are
integrated into a single structure. This phenomenal increase in industry
productivity is the driving force that has made semiconductor electronics the
technology of choice for all control and computing applications.
13. There are two reasons why the cost of this technology consistently drops: first,
the broad applicability of semiconductor devices leads to a phenomenally elastic
market, so that decreases in cost are more than balanced by increases in the
total unit demand. The total market continues to grow in dollars despite the fact
that the products are falling rapidly in price. Second, because of the unique
nature of the technology, by making things smaller the speed of the circuits
increases power consumption drops, system reliability increases significantly,
and, most importantly, the cost of the electronic system drops. By making things
smaller, development density is increased. More function can be built on a given
area, causing the price of electronic functions to be cheaper and cheaper.
Technology evolves so rapidly that the market moves to the next generation or
beyond. Thus, to be successful it is necessary to continue investing in new
products even during these down periods. Intel did this. In the following phase,
the case showed aggressive moves on the part of the firm.
