Executive Summary - Winthrop University



Intel

Final Paper

MGMT 480- Frankforter

Executive Summary

As the world’s “foremost semiconductor maker,” Intel Corporation has a reputation to uphold and a future to build. Founded in 1968, Intel has grown to a company of over 90,000 employees who operate Intel’s facilities in nearly fifty countries. Intel produces processors, motherboards, chipsets, network adapters, flash memory, software, storage devices, and wireless products. Many of us are the end-users of a wide variety of Intel’s products, but the Intel’s numerous other customers are primarily OEM manufacturers who utilize Intel’s components, end-user consumers (which includes individuals, large and small businesses, and service providers), and “other manufacturers, including makers of a wide range of industrial and communications equipment.”

Intel has capitalized on its ability to lead the semiconductor industry by continuous innovation. Gordon Moore, one of Intel’s founders, introduced a principle that continues to guide Intel which states that “the number of transistors on a chip roughly doubles every two years.” In keeping with Moore’s Law, Intel’s key to success in the semiconductor industry has been constant innovation. Such a strategy has allowed Intel to remain a leader among competitors such as Texas Instruments, Advanced Micro Devices, International Business Machines, and Freescale Semiconductor, among others.

The semiconductor industry is extremely competitive, but Intel seems to have the most sure-footing of all the major competitors. By offering a diverse product lineup that calls upon nearly fifty years of expertise and continuous innovation, Intel has become and will continue to be a leader in its field. No competitor has come close to replicating the competitive advantages possessed by Intel Corporation.

Analyze the Company Mission

According the company website, Intel Corporation’s mission statement is as follows: “Delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live.” As the world’s foremost manufacturer of technology-related products, Intel has continuously delivered on this mission. In the following paragraphs, the reasons why Intel has enjoyed such success with its mission statement will be delineated.

The first goal contained in Intel Corporation’s mission statement focuses on not only serving customers, but “delighting” them. In order to understand how Intel achieves such a goal, we must establish who constitutes Intel’s customer base. Intel’s customers include “original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who make computer systems, cellular handsets and handheld computing devices, and telecommunications and networking communications equipment; PC and network communications products users (including individuals, large and small businesses, and service providers) who buy PC components and board-level products, as well as our networking and communications products, through distributor, reseller, retail and OEM channels throughout the world; and other manufacturers, including makers of a wide range of industrial and communications equipment.” A focus geared toward customers “causes managers to realize the importance of providing quality customer service.” By placing customers first—whether major manufacturers or PC users—Intel has been able to build a positive reputation with those who utilize Intel’s products.

Strong employee relations are important to the ultimate success of any company. Intel presently employs over 90,000 people in numerous countries, so the potential difficulties in “delighting” employees are quite plain to see. Intel overcomes the odds, however, and has been named one of the “100 Best Companies to Work for in America” by the Great Place to Work Institute for eight of the past nine years. In addition, Intel has been recognized internationally as an exceptional place to work.

Delighting shareholders is an essential element in raising capital to pursue growth in the technology industry. Over the past 20 years, Intel has delivered on its mission to delight shareholders by splitting its stock six times and increasing stock price nearly 5000%. Comparatively, Advanced Micro Devices has not split its stock during the past two decades and has seen only relatively moderate gains in its price per share. “Intel's approach to investors appears to rest on a principle of transparency and trust. Intel ensures that investor queries are answered, whether the answer comes from the investor relations department; the public relations department; the environmental, health, and safety department; or the corporate responsibility department.” Intel takes great pride in the relationship that it has built with its investors, and as a result shareholder loyalty to the company seems to have remained strong.

“Relentlessly delivering the platform and technology advancements” that Intel offers is the way that the company fulfills the aforementioned goals of its mission. Intel’s customers, employees, and shareholders reap the most benefits from Intel through its ability to produce, expand, and market its cutting edge technology. As Intel continues to broaden the capabilities of existing products while entering new markets with fresh, innovative products, the potential for the company to “delight” anyone who has a vested interest in the company becomes more feasible.

Intel’s mission statement has been finely tuned over the past 35 years to become a fitting compass for the company’s future. The appropriateness of Intel’s mission statement lies in its congruence with company values and objectives. According to the company’s website, Intel’s values include “customer orientation, results orientation, risk taking, [being a] great place to work, quality, and discipline.” In addition, Intel’s stated objectives are to “extend leadership in platform and silicon manufacturing, deliver architechtural innovation for market-driving platforms,” and to “drive worldwide growth.” The effectiveness of a company’s mission statement can be measured by the extent with which the company adopts the mission. It is clear to see that Intel’s mission statement has permeated the core values and objectives to the point that all three serve as guiding elements of the company’s philosophy.

Assess the External Environment

In assessing Intel’s external environment, there are four related sectors – economic, social, technological, and ecological.

In terms of the economic environment, Intel must understand and consider the economic trends in the segments that affect its industry. The book gives examples such as the general availability of credit, the level of disposable income, and the propensity of people to spend.

Intel abides by something known as “Moore’s Law.” Moore’s Law says that the number of transistors on a chip doubles about every two years. The company strives to make this law a reality by working day in and day out to increase the level of technology offered to their consumers. Intel feels that their expertise in the field of silicon gives them an edge in developing platforms that will continue to fuel economic growth. By paying attention to the economy and what is needed from technology, Intel can secure their already protected position at the top of the food chain in the chip industry.

Social forces are dynamic, with constant change resulting from the efforts of individuals to satisfy their desires and needs by controlling and adapting to environmental factors. Intel understands the need to assess the social factors that are influencing the environment. The company employs anthropologists, psychologists, and other social scientists alike to study people in their natural environments. Intel believes that this will aid the company in finding ways for technology to enhance the consumer’s everyday lives.

By keeping close tabs on the social forces that are driving the industry, again, it seems to be a positive for Intel. As long as the company is knowledgeable of their consumer’s desires and needs, and strives to fulfill those wants and needs, there is no threat to the firm of losing customers.

The book states that creative technological adaptations can suggest possibilities for new products, for improvements in existing products, or in manufacturing and marketing techniques. Intel employs more than 7,000 technologists and thought leaders to discover breakthroughs in five core technological areas: silicon technology and manufacturing, micro architecture, computing platforms, communication and networking, and software technologies. The company is ahead of the game with their technological advancements in the products that they currently offer and the products that they are introducing to the market. Their “next generation micro architecture” will reduce space and electricity burdens for IT managers as sever data centers grow.

Concentration in technology, being Intel is a technologically based firm, poses serious opportunities for the company. Intel is already the leader in the chip industry; further research and development can only bring positive outcomes for the company. Intel has an exploratory research group that focuses solely on long range emerging and disruptive technologies. The company understands that in order to have a competitive advantage over other firms, they must get new and/or improved/innovative products on the market before other companies have an opportunity.

Ecological factors are very important to any organization, as they can be the rise or fall of the company. Ecology refers to the relationships between people and the environment, specifically other living things, soil, water, and air.

Intel “strives to provide a safe and healthy workplace, to conserve natural resources, and to minimize the impact of manufacturing operations have on the environment and neighboring communities.” Ebay has joined with several companies, including Intel, Apple, HP, IBM, and more, to create its “Rethink Initiative.” The purpose of this program is to educate consumers and businesses about options for disposing unwanted computers. The Rethink Initiative is a website that includes information on how to safely sell, recycle, or donate used computers. Intel is Ebay’s primary ally in the campaign.

Intel attempts to conduct its business in a manner that is suitable for the environment. By realizing and controlling the effects the business operations have on the environment is one more competitive advantage that they can have over their competitors. Ecological factors do not look to be a threat to the firm anytime soon.

Analyze the Industry Environment:

Intel primarily competes in the microprocessor industry. Defining the scope and boundaries of the industry is important in evaluating Intel’s competitive position. If boundaries are not defined well enough, then firms may be considered competitors when they actually should not be. Inversely, if an industry is too narrowly defined, then forces affecting the industry may not be used for consideration in strategy development.

Once an industry is defined, competitive advantages of firms in the industry can be assessed using the “five forces model” developed by Michael Porter. The five forces consist of entry barriers, extent of rivalry, supplier power, buyer power, and substitute products. Industries vary on forces that hold greater importance. Capital intensive industries naturally have entry barriers, while other industries may have a focus on cost reduction and operational efficiency as a basis to decrease competition.

Intel is the beneficiary of numerous entry barriers in the microprocessor industry. The first major benefit is economies of scale. Since the production of microchips necessitates high quality equipment, Intel can produce chips at a lower cost per unit if fixed assets produce a greater number of chips. Capital requirements also prevent other firms from entering the industry. Companies in the microprocessor industry have to stay alert of trends, so large amounts of capital are used in research and development cost. Small companies cannot compete in the industry because they cannot match the cost advantages established by the larger firms. Although product differentiation is difficult to establish since quality is measured by performance and capability of chips, Intel has developed a brand image of perceived quality.

The second most important force is the threat of substitutable goods. Since microchips are used as a component in finished goods and the chips have no significant physical differences, product differentiation is difficult to manage. For example, Pepsi has tried to differentiate its product from Coke on the notion of superior taste. Intel has had to differentiate its chips through capability and through marketing channels. Intel chips are given names such as “Celeron” or “Pentium” to establish a brand and establish perceived quality in the end user. AMD, a primary competitor of Intel, could produce the same processor, but the typical mainstream consumer may still choose Intel products because of effective marketing. The same perceived quality is seen in name brand drugs over generic drugs.

Having entry barriers and substitution threat as industry driving forces has helped to shape Intel’s operating environment. The industry has forced technology companies to be more adaptable to change. Technology products generally have shorter life cycles than most consumer goods. As a result, implementation of strategy is as important as the strategy itself. Intel and other firms have to be efficient in operations with a concentration on speed in production and release into the market. Once a product is distributed, usually to another computer manufacturing company, it has a limited time period before prices must be reduced. Product life cycles can be short as six months to a year. Obsolescence is a concern for customers of Intel because they must be able to sell items in the market at high prices in order to rapidly recover costs.

Power of buyers and suppliers is not as important in the microprocessor industry because there is competition at both levels. Intel cannot be an overwhelmingly powerful buyer, even with massive capital, because new technology must be developed every few months. There are also numerous suppliers to the industry because raw materials are readily available and there are multiple uses for supplied goods. Buyers in the industry may pay more for higher quality of raw materials because that usually translates into better quality in the end product.

Rivalry in the industry is not extremely intense since Intel is one of three major firms in the industry. AMD and Texas Instruments are the two other major firms. Small firms do exist in the industry, but they usually compete in a niche environment. The small firms tend to specialize in one specific product or compete in a small area.

The growth of the industry starting in the early 1990s has also helped shape the industry. Intel and AMD are known primarily for producing semiconductors and processors, while Texas Instruments has a more diversified product line. Texas Instruments is known mainly for their “TI” line of calculators and have some recognition in developing “DLP technology” for high definition television. Although AMD is a smaller company, it is known to produce higher quality processors. Intel is known for being more marketable to mainstream computer companies such as Dell and Hewlett-Packard. AMD has sold processors in lower quantities, partially due to manufacturing capability, to lesser known companies such as E-Machines. E-Machines has been acquired by Gateway.

Develop a Company Profile/Value Chain Analysis

The book describes the value chain analysis as an “attempt to understand how a business creates customer value by examining the contributions of different activities within the business to that value.” The book goes further to say that customer value is derived from three sources: activities that differentiate the product, activities that lower its cost, and activities that meet the customer’s needs quickly. VCA looks at all activities and determines the ways that each activity that occurs between purchasing inputs and after sales service, helps differentiate the firm’s products and services.

The initial step in conducting a value chain analysis is to break down the company’s activities into primary and support activities. Primary activities, also called line activities, are those that are involved with the physical creation of the product, marketing and transfer to the buyer, and after sale support. Intel’s key primary activities are their solutions and services, their resource centers, and their technical support and download centers. All of the above resources can be found on the company’s website. The programs are in place to offer the customer assistance in business solutions, decision making in terms of technology, as well as new and updated downloads for their products.

Support activities, sometimes called staff functions, are those activities that “assist the firm as a whole by providing the infrastructure or the inputs that allow the primary activities to take place on an ongoing basis.” Intel’s most noted support activity is the company’s extensive research in areas such as technology. The firm operates with more than 100 standards and industry groups worldwide including: networking and telecommunications, general, software and web, silicon and semiconductors, and computing platforms. Intel’s affiliation with these standards and groups worldwide give way for the company’s primary activities to occur on a continuous basis.

Intel’s primary rivals are AMD, Samsung, and Texas Instruments. The fact that these three companies are all technologically based like Intel, gives the assumption that the primary and support activities of each company are relatively similar to those of Intel. However, Intel feels that they hold a competitive advantage over the other companies due to the firm’s leadership in chip technology. Intel has a long history of translating technology leaps into tangible benefits that people can appreciate. After evaluation of the company, it is obvious that Intel does hold a leadership position and foresees at no time in its near or distant future losing that position.

Develop a Financial Analysis:

For the purpose of an effective comparison, AMD is most similar to Intel in terms of product lines and customer base. In terms of stock prices, AMD has grown over the last five years from as low as about $5 to the current level of about $40. Intel, on the other hand, has been on a downfall from about $35 per share to the current level of about $21.

The income statement is an important tool in assessing the profitability of a company. For the past five years, Intel has gradually increased profitability from 1.2 billion in 2001 to 8.7 billion in 2005. AMD, on the other hand, has only recovered from a loss of 60 million in 2001 to a profit of 165 in 2005.

Intel is a more profitable company, so why is the stock price for Intel lower than AMD? There are numerous reasons why the market values some companies over others. Although all of the factors affecting the stock price cannot be uncovered, a few assertions can be made.

First, investors consider factors in the company that will lead to future profits. When a company’s future looks bright, the result is usually incorporated into the valuation of the stock price. Also, stock prices fluctuate when members of executive management either leave or are replaced. When long time Intel CEO Andy Grove left his position in the late 1990s, the market was not certain on Intel’s future. Although Intel has generated profits every year since 2001, Intel’s operational structure has come into question. Second, stock prices are determined in accordance with stockholder expectations. With a company as large as Intel, investors may expect higher profits. Investors may believe the company is not producing as well as it is potentially capable. If investor and stock market analysts’ expectations are not met, a company’s stock price may decrease even if it produces a profit.

Because of the differences in stock price and earnings of each company, they have substantially difference P/E ratios. Intel has a ratio of 16 while AMD is approximately 42. This does not necessarily mean AMD has an inflated stock price. It only means investors are willing to pay a high stock price because of AMD’s value in the market. Intel is below the industry average P/E ratio of 28, while AMD is in excess. AMD has a higher Beta than Intel, which is expected since AMD is a smaller and more volatile company.

Intel has a quick ratio of 1.47, while AMD is 1.99. This can be explained because Intel has greater production capability compared to AMD. As a result, Intel has a greater proportion of fixed assets to current assets. Intel has a long term debt to equity ratio of .06 compared to .13 of AMD. Intel has made a conscious effort to reduce interest expense. The company reduced interest expense from 62 million in 2003 to only 19 million in 2005. Some industries require heavy financial leverage, but this is not the case in the microprocessor industry. Intel has followed the operational behavior of other technology based companies such as Microsoft and Apple in nearly eliminating long term debt.

The 5-year average net profit margin between Intel and AMD also differs. Intel has a margin of 16.76% compared to -7.64% of AMD. The substantially large profit margin for Intel demonstrates the effective cost cutting ability of Intel and the use of proper leverage. Because of Intel’s size, management is better able to capitalize on market opportunities. Intel has current Return on Assets and Return on Investment ratios of 16.54 and 20.52, respectively. AMD has current ROA of 3.72 and ROI of 5.38. AMD has lower returns partially because of its size and partially because of management’s ability. Investors are hoping AMD will become what Intel was in the late 1990’s.

Investors in Intel have conflicts with Intel’s management in finding a nice balance between profitability and growth. Investors usually want the company to be profitable, since some of the profits usually go back to shareholders. Management has to maintain the survivability of the firm, while growing to maintain market share. Looking at Intel’s balance sheet, long term debt substantially increased from 703 million in 2004 to 2.1 billion in 2005. Although this conflicts with one of Intel’s previously stated objectives of lowering interest expense, it was necessary to sustain growth of the company. Prior to 2005, Intel had decreased long term debt from 1.05 billion in 2001 to 703 million in 2004.

Firm's Position and the Core Issue of the Case

One of the best ways to evaluate a company is to uncover opportunities for your company’s advantage. Another way to evaluate and to discover weaknesses that protect your company is through use of SWOT analysis. Every company’s SWOT analysis is broken down into four parts: strengths, weaknesses, opportunities, and threats.

First let’s look at the strengths of Intel. The first strength of Intel is their strong brand name. Their brand name is one of the most popular as well as top brand names in the computer micro-chip industry. The brand name of Intel is on various computers, cell phones, I-pods, hard drives, etc. They have patented their own unique micro-chip processor, as well as their own transistors. Intel is world-renown for computer micro-chips. It is a high possibility that if someone looks at the back of their computer, they will find the Intel logo. Intel is the number one seller in computer micro-chips and transistors. As one could see, Intel’s brand name is huge factor in why they have been successful thus far in their life cycle.

The second aspect of SWOT analysis is weaknesses. Intel’s largest weakness includes their safety record. Intel used to pride themselves in their almost flawless safety record. In 1992, Intel had an average of 92% incident free record. Since then, their safety record has fallen to 81%. Situations that could possibly make the record fall are employee injuries, transistor malfunctions, and chemical spills. From chemicals spilling on the employees eyes, skin, or any other part of their body, the injuries have to be reported to OSHA. OSHA deals with all safety situations that happen on the job. Intel needs to implement some type of plan that increases employee safety records. Also, Intel needs to offer classes to the employees that might decrease the liability of more injuries on the job. This weakness is a problem that Intel needs to fix. Once the company increases their safety record back to the low 90%, Intel can reap the rewards that may come with fewer injuries in the near future.

The third part of the SWOT analysis is opportunities. Intel has a great opportunity to look toward in the future. The opportunity that Intel can look forward to is the spread of sales into international markets. Intel has already become the number one producer of micro-chip processors and transistors in the United States and Canada. There is a positive outlook for their international market in the near future. Intel has already made progress in countries such as: Bolivia, Brazil, China, Japan, New Zealand, Norway, Sweden, and Peru just to name a few. Intel’s largest opportunity is to continue to spread into international markets, so that they can increase their chance of growth. Intel’s potential is as large as they want it to be. Intel has a great opportunity to increase their niche in the market. It is up to them on how and when they want to increase their market productivity.

The last part of the SWOT analysis is the threats. Intel’s has many threats, but the main one that needs to be focused on is the chance that another micro-processor company will come in and take away some of their competitive advantage. A downturn in of Intel’s market would be if another company grabbed a large piece of the market from Intel. Intel already owns 39% of the micro-processor market. As long as another company does not come along and take away their business, Intel should be fine. To avoid this threat, Intel needs to continue with their domination in the micro-processor market. The ever increasing market of micro-processors has created a threat for Intel, but as long as they continue to increase their technology they will not be affected by this threat.

The core issue that Intel faces is fact that they need to stay the number one in the micro-processor market. This is a key strategic opportunity. More and more businesses are entering the market as years pass. That means Intel’s likelihood of staying number one is decreasing. Other companies are learning the ends and outs of this market that made Intel as successful as they are today. The way Intel stays number one in the market is to continually come out with new and improved innovations in technology. The former CEO of Intel Gordon Moore has come up with a rule that explains the blueprint that Intel needs to follow. The plan is called Moore’s Law. Moore’s Law is the future plan that describes how Intel will continue to double the number of transistors they place on a micro-chip every year. By doubling the number of transistors on the micro-chip, Intel always is increasing the technology they offer in processors. Imagine if the company doubles technology every year. They will continually put pressure on their competition. By placing pressure on the competition, they will solve the key strategic problem.

Long Term Objective and Strategic Scenarios

The next five years is a key time for Intel. The next five years are crucial to the long-term success in the micro-processor industry. The next five years will determine whether they will be able to continue to increase their domination in the market. The five-year outlook depends on the scenarios that Intel will likely face.

Intel’s best case scenario is simple. Their best-case scenario is that they will still be the number one micro-processor company in the market years down the road. As long as Intel keeps coming out with new innovations with technology, they will stay the number one in the market. If Intel follows Moore’s Law, the company will see higher productivity than the year before. Continually coming up with new technological innovations is the most important factor to Intel reaching their best case scenario.

Best case scenario and worst case scenario are obviously opposites. So, if continually coming up with technological innovations is the best case scenario, then the opposite for worst case scenario would be not to continually coming out with innovations. The worst-case scenario for Intel would be to sit back and watch the competition come up with new technology. By not coming up with innovations, this would cause drastic loss of productivity. The best case scenario would improve Intel chances of success, but the worst case scenario would make them a candidate for bankruptcy.

If the best-case scenario were to occur, Intel would reap many rewards. But if they do reap there rewards, they cannot rest contently with this success. They would need to permanently sustain their long-term objectives to be able to continue with this growth. Intel’s best case scenario directly affects their long term objective. If they put new innovations out on the market for customers to purchase, Intel will reap the reward of increasing revenue. So, the best case scenario and long term objective can be positively linked together. In case of the worst-case scenario, Intel needs to completely avoid this situation. If they followed the worst case scenario, they would see that the industry keep up with technology and they did not. The success of Intel all comes down to coming out with new technological innovations. Whether Intel follows the best or worst case scenario, the company will not automatically go bankrupt, but eventually they will if they do not come out with technological innovations.

Develop Corporate Level Strategic Alternatives

Since corporate level strategies are a direct extension of a firm’s mission statement, core values, and objectives, it is important to pursue strategies that will help to achieve overall company goals. Corporate level strategies serve as a guide for the rest of the firm toward the overall mission, and therefore directly impact a large number of the company’s lower-level decisions. Intel’s aggressive mission, values, and objectives can be more readily obtained by choosing proper corporate level strategies. Outlined below are four alternatives that Intel could choose to pursue in an effort to achieve its overall goals.

Concentric diversification is an excellent avenue for growth, cost controls, and synergy, all of which could improve Intel’s current stronghold in the technology industry. By pursuing this strategy, Intel could potentially increase its current competitive advantages over competitors by acquiring a firm “whose products, markets, distribution channels, technologies, and resource requirements” contribute to the formulation of new strengths while shoring up any weaknesses that exist in Intel’s current corporate structure. Concentric diversification can be a costly strategy to pursue, however, and if Intel chooses to pursue this strategy in the future, acquisitions should be carefully investigated and opportunity costs closely monitored to ensure that the company is heading down the right path.

Over the past 35 years, Intel has grown into a company with nearly 100,000 employees in almost 50 countries. Along the way, Intel has acquired numerous firms, some of which are no longer of much use to Intel Corporation. Pursuing a strategy of divestiture of such firms could result in increased assets that could be put toward the latest in cutting-edge technology. For example, according to Intel’s most recent 10-K filing with the SEC, “during 2003, the company recognized approximately $758 million in tax benefits related to sales of the stock of certain previously acquired companies, primarily DSP Communications, Inc. (DSP), Dialogic Corporation and Xircom, Inc. A net benefit of approximately $420 million was recognized on the divestiture of a portion of the intellectual property assets of DSP, through the sale of the stock of DSP. A benefit of approximately $200 million was recognized on the divestiture of a portion of the assets, primarily real estate, of Dialogic, through the sale of the stock of Dialogic, and a benefit of approximately $125 million was recognized related to the sale of a wireless WAN business, through the sale of the stock of Xircom.” By divesting unnecessary business units, Intel can streamline its operation and modernize its corporate portfolio to more accurately reflect the industry in which it competes. Unfortunately, divestiture is contingent upon having a buyer who is willing to purchase the divested assets for a fair market price. Also, by eliminating business units, Intel could be selling away future, unforeseen opportunities.

Vertical integration makes sense for a company the size of Intel. With numerous products and channels of distribution, and easy way to eliminate costs and gain a competitive advantage would be to either reverse integrate into the supplier market or forward integrate into the customer market. Either method will result in better cost controls, higher quality products, and a general strengthening of Intel’s reputation. Vertical integration does not come cheaply, however, especially in Intel’s industry. A careful cost-benefit analysis should be performed before any vertical integration is pursued in order for Intel to be a savvy customer.

With a market cap over two times its nearest industry competitor, acquisitions are certainly a feasible option for Intel Corporation. Such a strategy can be pursued for numerous reasons, and careful acquisitions could potentially result from a strategy of divestiture if Intel is seeking to update its company portfolio. Acquisitions are extremely costly, however, and should be pursued with care. Reckless acquisitions could leave Intel with numerous “dead weights” that could hamper the company’s competitive abilities.

As stated, corporate level strategies are essential to the overall direction of the company. Intel has numerous alternatives to choose from, and the best choices will yield results that align with the company’s mission statement, values, and objectives.

Evaluate Business Level Strategic Alternatives

In order to fully realize the potential outlined by the company’s mission statement, objectives, and values, Intel must capitalize on the many business level opportunities that are available to pursue. In particular, Intel should focus on strategic alliances, joint ventures, concentrated growth, and product development.

Strategic alliances are “an agreement between two or more individuals or entities stating that the involved parties will act in a certain way in order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths.” Currently, Intel is pursuing a strategic alliance with Apple Computer, Inc. to offer Intel’s computer chips with Apple’s increasingly popular line of home computer systems. “This major strategic shift [by Apple] signals the end of longstanding relationships with IBM and Freescale Semiconductor, which until last year was a division of Motorola. The two companies manufacture the Power PC chips currently found in Macintosh computers.”

The example that Intel has set by pursuing a strategic alliance with Apple Computers serves as an overall guide for the company when pursuing strategic alliances. Of course, there are pros and cons to any strategic pursuit, and strategic alliances are not exempt from this rule. The benefits of pursuing a strategic alliance are increased brand recognition, increased market share, and the ability to “quickly provide value to the customer” by creating another avenue for potential customers to purchase Intel’s products. The inherent risk, however, is that Intel could overstretch its assets and neglect key aspects of its business, which may allow competitors to catch up to Intel’s level of expertise.

Joint ventures would result in many of the same benefits as strategic alliances. As a “contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking,” joint ventures are an attractive way for companies to minimize risk while increasing overall market presence. Currently, Intel is pursuing a joint venture with Micron Technology, Inc. to “manufacture flash memory for use in consumer electronics, removable storage, and handheld communications devices. The new company will manufacture exclusively for Micron and Intel. Intel and Micron have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of IM Flash Technologies’ NAND flash memory output.” This joint venture, along with any others that Intel may decide to pursue, could have the benefits of allowing Intel to establish itself in a new product market while minimizing risk. Once again, however, the primary drawback of a joint venture is that Intel would be allocating assets toward the venture that would otherwise be earmarked for Intel’s current areas of expertise.

The concentrated growth strategy has a certain level of potential for Intel Corporation. By “focusing on a specific product and market combination,” Intel can continue to capitalize on and further develop its expertise as the world’s leading manufacturer of microprocessors. A concentrated growth strategy would devote most, if not all, assets toward widening the gap between Intel and competitors when it comes to microprocessor manufacturing. Unfortunately, however, Intel’s current position is not ideal for pursuit of a concentrated growth strategy. First, Intel’s industry is based on major technological advancements, which is a strike against concentrated growth. Perhaps the largest drawback of pursuing a strategy of concentrated growth would be the potential limitations it would place on Intel as a company. With so much technological experience and expertise, Intel still has plenty of unexplored potential to offer the microprocessor industry. As a result, focusing on a strategy of concentrated growth would not allow Intel to reach its fullest potential as a company.

As personal computers have become increasingly commonplace in American homes, the Intel brand name has enjoyed increasing recognition as a high quality, reliable source of information technology. As a result, Intel is drawing closer to a position where marketing new or substantially improved products under the Intel name could prove very successful. Such products would be marketed to existing Intel customers through currently utilized channels of distribution. By further developing Intel’s product lineup, becoming a household name will be even more feasible, and Intel will be able to apply its expertise in more diverse segments of the technology industry. As previously mentioned, any reallocation of funds away from Intel’s core business function could result in a slipping competitive advantage in exchange for unknown results.

The primary disadvantage of each of these strategies, as mentioned, is the shifting of focus away from Intel’s primary, most successful business segment. According to one Intel executive, “we operate in intensely competitive industries that experience rapid technological developments, changes in industry standards, changes in customer requirements, and frequent new product introductions and improvements. If we are unable to respond quickly and successfully to these developments, we may lose our competitive position, and our products or technologies may become uncompetitive or obsolete. To compete successfully, we must maintain a successful R&D effort, develop new products and production processes, and improve our existing products and processes at the same pace or ahead of our competitors. We may not be able to successfully develop and market these new products; the products we invest in and develop may not be well received by customers; and products developed and new technologies offered by others may affect the demand for our products.” Relaxing a competitive advantage will surely mean increased competition from companies such as AMD, Texas Instruments, and Samsung Electronics, among others. While it is extremely important for Intel to pursue business level strategies, care must be taken to follow paths that will not hinder Intel’s undeniable success in the microprocessor market.

Evaluate International Business Activities:

In recent years, heavy emphasis has been put on American manufacturing firms relocating plants to South America and parts of East Asia. American firms are able to increase profits due to lower labor costs and undervalued currencies in those foreign countries. Investor pressure to generate higher profits has forced companies to compete on a global scale and to expand strategy development to encompass other countries.

In recent years, Dell moved servicing operations for computer problems to India. As a result, Dell receives a source of educated labor for a much cheaper price than in the United States. Dell has also received numerous complains about the support centers due to a lack of ease in communication. Competing in a global market can have benefits, but improper implementation can lead to greater costs. Nike has also outsourced parts of athletic shoe manufacturing sporadically throughout the world.

Intel has major opportunities in three East Asian nations. By operating in foreign countries, Intel must first ensure that the quality of their product is not significantly diminished. If the quality of Intel chips decreases, then consumers will not see quality in the well known Intel brand. First, Intel should work with Japanese companies to develop ideas for new technology. Japan has been an innovative leader in the technology dependent world. Japanese companies are more advanced than American companies in efficiency and technological development. Next, Intel should have a production plant in China to create products made at a lower overall cost. Intel should only produce the chips on a test basis to see if the market reacts negatively to chips produced in a country not known for high quality products. China would provide lower human labor costs and the undervalued Yuan could also be beneficial in currency conversion. If the Chinese venture is successful, then Intel should provide servicing in India. Most customers for Intel are other corporations, so limited servicing would be needed. India provides an educated work force specializing primarily in technology. Servicing may be better if accomplished through e-mail or other text based support system.

Intel should primarily use joint ventures when doing business in other countries. Intel has a medium amount of product diversity and is in an industry of medium complexity. Joint ventures provide the benefit of professional management in foreign countries. Intel managers from the United States would also not have the burden of overcoming cultural differences. Although joint ventures are not as profitable as full immersion into foreign markets, Intel would be protected against a large failure. If operations yield success, then Intel could invest further into foreign markets and try to self-manage operations.

Intel can measure the quality of the foreign produced goods through benchmarking. Intel could measure how many documents a chip could process in a certain amount of time and compare the results to a rival’s chip such as AMD. Intel would have to try to remain the industry leader, while reducing costs. If quality has decreased relative to an AMD chip, then better quality control standards would have to be enacted.

Make a Strategic Choice

Business Level Strategy:

In evaluating the business level strategies, the one that is most applicable to Intel is product development. Product development “involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels.” Although Intel has been playing an active role in product development for sometime now, it is an area where the company should continue to concentrate. Intel is famous for its superior execution in all parts of its business and shows no sign of falling from its lofty perch at the top of the chip industry.

Sometime ago, the company began their move into high end processors. After careful evaluation, the company should continue to produce high end processors. High end processors simply deliver higher performance to consumers, which is what most consumers are interested in. Since Intel already has its name established with the processors, it would be a wise choice to continue development in that area.

Currently, none of Intel’s competitors, i.e. IBM and Texas Instruments, have given a second thought to moving into high end processors. The competitors do not feel as if it is an option for them, because with sticking with their current architectures, they don’t require software firms to overhaul their products. Or more simply stated, they don’t want to have to put much effort into creating the processors. They may not have the resources to construct such architecture, and by saying it is “not an option” allows consumers to be in the dark about their inability to stay with the competition.

High end processors are definitely something of the future. For Intel to be breaking into this market and perfecting the systems relatively sooner than their competitors, it almost guarantees them remaining at the top of the industry. Remaining at the top is a definite long term goal the company strives to achieve on a daily basis.

Although the benefits of product development are many, there are a few downfalls as well. Such concentration on one product, the processors, may take time away from concentration in other areas of development. Other products should be watched closely as to find ways of improvement for them as well. Also, when computer makers adopt new chip architecture, which is what the processors essentially are, all software must be reworked to fit the new design. This takes an abundance of time, energy, and resources on Intel’s part. The amount of resources needed is the key reason competitors do not feel they are ready to make the same move that Intel has. IBM has stated that their customers are more interested in “architecture stability,” and by not moving into high end processors, they feel they will be “more successful in retaining their customers.”

In argument to “retaining customers”, Intel puts an extensive amount of time, money and effort into their research and development departments. People work around the clock to forecast potential problems of new products and ways to fix or stop the problems from occurring. Highly trained and skilled individuals are employed with Intel and it seems as if this is what gives the company the courage, confidence, and ability to move into new territories. Perfecting new territories faster than their competitors gives a lasting impression on the minds of the consumer.

Other business level strategies that were presented were strategic alliances, joint ventures, and concentrated growth. While all of these alternatives could fair well for the company, overall, product development is Intel’s current best choice.

Joint ventures are formed when there are “two or more capable firms that lack a necessary component for success in a particular competitive environment.” Intel is not currently in a position where they are lacking necessary components. They hold strong in the position as the leader of the chip industry. Strategic alliances are more along the lines of two companies that join together for a common goal, and then split from one another after the goal is accomplished. Intel’s competitors are not on the same level as the company and therefore may not be able to provide any immediate benefits to Intel. In the future, a strategic alliance may be beneficial, but currently, it does not seem like the most appropriate strategy to pursue.

Neither does concentrated growth. Concentrated growth implies that you devote resources to the growth of a “single product, in a single market, with a single dominant technology.” Intel provides an array of products for its consumers. Some areas of the business are more concentrated that others, but it does not make sense to devote the entire company to one area of product and market. Even if it would be a profitable growth, Intel does not seem to need to focus on solely one product to retain its leadership in the industry.

Corporate Level Strategy:

After evaluating the possible corporate level strategies for Intel, the most pertinent for the company seemed to be concentric diversification. By definition, concentric diversification involves “the acquisition of businesses that are related to the acquiring firm in terms of technology, markets, or products.” The acquiring firm searches for businesses “whose products, markets, and distribution channels, technologies, and resource requirements are similar but not identical with its own.” This strategy also allows the firm to diversify within the product line, introducing new products when life cycles have peaked.

Intel should focus on improving the computing experience for the end user, as well as improving product capability for the customers. Doing so is a major priority for growth. Intel could look to acquire smaller, but still profitable, firms that can alleviate some if not all outsourcing requirements. The goal would be to find smaller firms that operate in an industry of use to Intel, acquire it and in the end, save more money and generate higher profits.

The company needs to be concerned with what is in the consumer’s best interest, however. Instead of solely focusing on improving the technology, a deeper look needs to be taken as what the consumer will receive in benefits from the improvement. Intel should develop new and innovative products based on what it is the consumer’s desires and needs are. Researchers and developers simply do what they do best and work on ways to beat out the competition with the issuance of newer and better products on the market. Consumers are always going to buy the newer products because usually newer means better. However, Intel needs to strive to ensure that consumers are getting the most out of the product, and that “the most” is exactly what the consumers are looking for in their everyday and business lives.

The improvement in product capabilities will essentially provide consumers with better memory technologies, better memory controllers, and better overall management. This signifies the diversification within related areas of the technology. As for keeping a focus on the overall computing experience for the consumers, the benefits outweigh the cons. The more focused the company is on its consumers and their needs, the higher likelihood that the dominant computer companies, such as Dell and HP, will continue to use Intel processors in the computers. Consumers will also recognize the concern that such a large corporation as Intel has for its customer’s wants and needs when it comes to computing hard and software.

With Intel already having found ways to provide anywhere from 5 times to 40 times the processing speed, it would be a safe guess to say the company already knows consumer needs should be of major concern.

Other alternatives that were offered for the corporate level were divestiture, vertical integration, and acquisitions. These three strategies did not fair as well as concentric diversification in the evaluation phase.

The divesture strategy suggests the sale of a firm or a major component of the firm. Intel does not have the opportunity to sale any part of its firm. It would not be a wise decision on the company’s part to rid itself of any part of the organization. The firm has most everything it needs to be successful. A more reasonable option would be acquisitions, however still not currently of importance to Intel. Intel could look to find other firms with similar goals and objectives, but why put time and energy into finding companies to acquire, when things are running smoothly as is, and concentration could be focused more on the interests of the consumers.

Key Institutionalization Processes

There are certain key institutionalization processes that companies must have to succeed and remain competitive. These four key institutionalization processes are structure, culture, leadership, and rewards. How well a company can implement these processes often determines whether the company has success in their market.

The first key institutionalization process is structure. Intel is the number on seller of micro-chips in the United States, but what about other countries. They need to operate internationally to improve the structure of their company. If they successfully integrate internationally, not only will they get revenue from the Unties States, but other countries as well. Intel is not a company that only operates in a certain town, county, city, state, or even a region, they operate internationally. Since they do have business in other countries, they reap the productivity in other places than the Untied States.

Culture is the second key institutionalization process. Intel has to realize the different styles of cultures that go along with international business. For example, the sizes of routers (which contain transistors) are different in other countries than in the United States. In Europe, the router is an average of eight feet long and the router in the United States is about five feet long. The number of transistors that go in a European router will be more than in a router in the Untied States. Intel has to realize this culture change and be able to adjust their production line to fit the culture. Intel has done an excellent job in adjusting to different cultures that allow them to be one of the most successful micro-processor businesses in the world.

The third key institutionalization process is leadership. Leadership is the front most reason why companies succeed or fail. A great example of leadership is to refer to the former CEO of Intel Gordon Moore. Gordon Moore started working for the company in the early 1970’s as a financial analyst straight out of college. The current managers of Intel saw some something special in him. The something special was his leadership abilities. His leadership abilities allowed him to advance in the company over the next 15 years. Over the years, he progressed from a lower level manager to a middle line manager. And then in 1986, the owners of Intel promoted him to assistant regional manager. Shortly after this promotion, the CEO of Intel stepped down. The owners looked at the possible candidates for the job and appointed Gordon Moore for the CEO position because of his leadership abilities. This example shows how leadership affects Intel. Gordon Moore went on to become the most successful CEO in Intel’s short history. One can see how leadership positively affects a company. And with the right institutionalization processes, a business will see the productivity substantially increase.

The last key institutionalization process is rewards. Rewards are the one aspect besides money that employees want to obtain. Rewards make employees put their best effort forward and try that much harder. Intel offers many possible pension plans and benefits that attract employees. Intel gives the option of giving their employees a chance to have paid vacations, employee discounts on Intel products, and various bonuses. Intel also offers to pay for grad school to employees who wish to further their education. Not all employees get these rewards. Only the employees who possess certain qualities get to obtain the rewards. With all of these rewards, it is easy to see how Intel is able to maintain a knowledgeable staff that is highly motivated to make their company the best in their industry.

Some companies use the McKinsey 7-S framework to diagnose certain problems in the company. The McKinsey 7-S framework consists of 7 items: structure, strategy, systems, styles, staff, skills, and shared values. The first two items in the McKinsey framework can be grouped together. Structure and strategy are two of the most important items in this framework. Intel’s structure and strategy was discussed earlier in this paper. Their structure and strategy are primarily based on their international market right now. Intel already established themselves in the United States, so now they are venturing in other countries. Their international success depends on the way Intel performs over seas. Their structure and strategy needs to follow the same way they follow in the Unites States. Intel’s structure and strategy are focusing mainly on their international markets right now.

The next McKinsey framework is system. Systems are what make the business run on the day-to-day procedures. Whether it is accounting programs, training systems, or budgeting software, the systems help the company run more successfully. One system that has allowed Intel to perform more smoothly is the culture procedure system. This system allows Intel to see how different cultures use different amount of technology. For example, if India’s technology is more or less advanced than the United States, this software will alert them of the change and then show the procedures needed to proceed. Without this system, Intel would have to manually sit down and figure out the difference between the two cultures. With the new system, all they have to do is wait on the system to perform its’ duties. One could obviously see that using the system software makes it easier on the company to perform its’ everyday duties.

The next two aspects of the McKinsey framework can be grouped together. The staff and skills of Intel are similarly connected. The more knowledgeable the staff becomes in their area, the more efficient the member of Intel becomes. The two can be linked with one another because the skills that Intel’s employees have are a direct result on whether the company succeeds. If the employees do not possess enough knowledge to correctly perform their job, the company will lag on their productions. So, Intel wants their employees to be the most knowledgeable that they can be. The staff and skills of Intel’s employees are directly corresponding with the success of their business.

The last two items of the McKinsey framework are the style and shared values. Style of the company is the way they perform their duties of the job. Some businesses are people based organizations and others are technological based. Obviously, Intel is technological based because they communicate with other clients through the world of computers and technology. It is faster to communicate this way, but it might cause confusion in technological lingo. Intel shares these technological values with many other companies, but the one value that they share with every successful company is great customer service. Intel prides itself on their customer service department. The value that Intel sees most important is to mimic other companies in the customer service field. The fact that Intel possesses great style and shared values shows why they are the number one in the computer micro-chip market.

Ethics and Social Responsibility

Ethics and Ethical Conduct of Employees

Intel’s company website states that they “strive to conduct themselves with uncompromising integrity and professionalism.” In the Global Citizen Report for 2004, it mentions that the company’s Corporate Business Principles serve as the backbone for guiding both employees and corporate officers each day in the way they conduct their business. Also in 2004, Intel, along with Microsoft, HP, and others, endorsed the Electronics Industry Code of Conduct (EICC). The intent of this code was to establish unified industry expectations for all socially responsible practices.

Intel strives hard to maintain an ethical workplace and workforce. In 2005, as a part of a new training requirement for all Intel employees, each class was introduced with actual case studies. The studies were used to aid employees make ethics based decisions when resolving business questions and issues. Intel understands the importance of abiding by ethical standards, and consumers and employees alike can be assured that the company takes the necessary steps and actions to be regarded highly in this area.

Social Responsibility Management

Intel was recently reorganized as a platform company, directing the entire focus of the organization on the customer and the market. The new organization is out to seek to define what exactly the consumer’s needs and wants are before they create the product. Intel is also interested in finding out what their employees needs, wants, likes, and dislikes of the workplace are. The feeling is that if employees are in a suitable and acceptable working environment, there will be an opportunity for more innovation in products and ideas. In return for excellent work that employees do for Intel, the company offers cutting-edge benefits and highly competitive compensation.

Intel employees are encouraged to take part in their communities by volunteering for schools and nonprofit organizations. Intel’s Computer Clubhouse Network sponsors such organizations as the Big Brothers, Big Sisters mentoring program in an effort to show commitment to its stakeholders and the communities.

The company website explains that the company’s focus areas of investment are what provide the company the ability to “align itself with the needs of the communities and the expertise of their employees.” Some key areas of investment are those of education, environmental safety, and diversity. In 1998, the Intel Foundation was created. The board of directors includes four corporate officers and the Intel CEO, Craig Barrett. The Foundation’s mission is to “strengthen engineering and computer science education and increase participation in these fields by women and under-represented minorities; to improve mathematics and science education for elementary and secondary students; and to foster the effective use of computer technology in education.

Intel is strongly focused on its involvement within the surrounding communities. Employees and corporate officials alike are encouraged to donate their time and help an organization in need. The company understands to be successful it needs to have well rounded employees as well as well rounded business practices.

Stakeholder Involvement

Intel maintains formal management systems to engage with, monitor, and learn from their stakeholders. The company has a diverse array of stakeholders in which they state they derive value from. Stakeholders for Intel include: employees, customers, suppliers, communities, investors, governments and policy makers, and non-governmental organizations.

Intel has a customer excellence program in which they obtain objective customer feedback which drives improvement and motivates employees to have a positive impact on the consumers. The company also issues a supplier newsletter which aids in improved interaction with and among stakeholders in the development of the Supplier Code of Conduct. In an effort to provide communities with a broad range of resources, Intel has extensive working relationships with educators and educational institutions worldwide. The company holds meetings, formal dialogues and projects, and conducts multi-sector efforts that promote mutual understanding between company and stakeholders on critical issues. Discussions in 2004 included resource use, supplier expectations, globalization, executive compensation and more.

Intel takes pride in making sure its stakeholders are as involved as possible with the company. Different programs and initiatives are set up for various stakeholders to ensure their ideas, beliefs, and opinions are heard and considered. Intel in doing a very good job of maintaining stakeholder involvement in decision making.

Diversity

The company websites reads “Intel was one of the first Fortune 500 companies to recognize domestic partnerships and offer benefits to family members.” This has been a tremendous help for same sex families, and Intel prides themselves in being a company that they can work at and still feel as an equal part of the organization. In 1995, Intel recognized IGLOBE, Intel’s Gay, Lesbian, Bisexual or Transgender Employees, as a chartered employee group. This gave members a feeling of acceptance and importance within the Intel community. Intel sponsors groups such as Out and Equal, a nonprofit advocacy group, as well as the Employee Non-Discrimination Act and the Human Rights Act. Currently, Intel has approximately 19 affinity groups that cover a variety of diverse populations and experiences.

Intel employs nearly 85,000 people in over 45 nations. The company has been recognized as the “workplace of choice for Asian Americans” and is also recognized for offering multicultural and global training programs. Intel’s website gives a breakdown of the ethnicities and gender of its employees. As for senior management and corporate governing bodies, 82% of the company’s board of directors are white males; the remaining 18% are white females. The company’s corporate officers consist of white males and females, and Asian males. The majority of the United States workforce are white males and females. Distantly following are Asian males and females, Hispanic males and females, and lastly, with 3% of the workforce each, black males and females.

In 2004, out of 2,852 employees hired, 38% were minorities, and 30% were females. Currently Intel’s workforce is comprised of 70% males and 30% females. A somewhat diverse workforce, but a more favorable workforce would have a slightly higher ratio of females to males.

Prescribe Strategic Controls:

The two most important controls for Intel are premise control and implementation control. Premise control consists of environmental and industry factors. Both factors have to be taken into consideration when implementing a strategy. Premise control is important to Intel because of its rapidly changing industry. Managers at Intel must choose premises in a strategy that are likely to happen, which can be a difficult task. When a project is undertaken, managers must be fully aware of market trends and factors that affect the industry. Because of such short product life cycles, something that is true one day may not be the next day. When a strategy is created for Intel, it has to be flexible in the implementation phase because of market factors.

Implementation control is also important when a strategy is carried out. Managers must set difficult but realistic goals to achieve the overall goal set at the corporate level. When a product is developed by Intel, speed and time are crucial factors for success of the product. Managers should be given tasks that will make use of time. Any idle time in operations takes away from being efficient. Implementation control helps to make sure that a strategy developed at higher management levels is carried out effectively by lower management.

Intel, like most technology firms, has to maintain quality in current technology while developing new technology. In doing so, a system of continuous improvement would help to yield success. In order for the system to be implemented properly, coordination must be organized enough to be maintained day to day.

One of the most important factors for success of the system would have to be speed. Product developers would have to gather data quickly on customer demand and relay that into creating an effective strategy. The product must be made with specified customer demands in mind. The product must also be designed and engineered quickly. One of the best ways to implement this strategy is through cross functional teams.

When cross functional teams are used in the creation of a product, various perspectives get to have their input. When functions are separated, there is less flexibility. For example, if the members of the engineering team design a product, it can go to the next function in line. The next function may be finance. If the members of the finance team reject the idea due to high cost, the engineers would have to redesign the product and resubmit the proposal to finance. However, if cross functional teams are used, then the problem of high cost is addressed immediately. As a result, the use of cross functional teams also eliminates redundancy and idle time.

Once a product is quickly designed and engineered, it must be distributed into the market. Operational efficiency also plays a key roll during this segment. Proper marketing campaigns must take place before and during the release of the product. Intel also has to establish proper distribution channels, so the product is distributed as soon as it is released. Intel has effectively used marketing tools to establish a brand name and to contract with computer manufacturers such as Dell and Apple.

When additional products need to be created, continuous improvement strategy must still be used. Technology develops rapidly and processor capability has to keep up with the changes. Intel has to continually improve their technology in order to stay in business. If Intel does not improve rapidly, then other companies will. Customers will ultimately purchase the best processor available at a reasonable price. Small incremental changes made to Intel products have helped to keep Intel the industry leader. Intel can gain a competitive advantage when a patent is granted on specific technology. Having the research capability also helps Intel gradually improve.

Project Future Trends

The new technological innovations that Intel came out with this past year allowed Intel to reach highs never before seen in March. The reason Intel is seeing all-time highs in revenue is the fact that they keep creating new innovations in micro-chips. The more chips created to put on the processors, the faster the computer will work and the more information the computer can hold. Customers see that Intel comes out with new and faster computers, and they are attracted to purchase their line of computers rather than other brands. So, the trend in the future seems to be that the brands of computers that have the best technology are the ones customers tend to buy more of.

A major trend that Intel needs to go through is increasing the number of transistors that they place on each micro-chip. According to Moore’s Law, Intel wants to double the number of transistors on each chip, but what if they triple the number of transistors. Not only will they increase the technology of their devices, but they will put the competition to shame. The more changes to technology that Intel does for the better, the more space they put between them and their competition.

As for the implementation of these technological changes, Intel places itself in a whole new market. That market is the speed at which the processors can deal with information at one time. Other companies that are in the micro-processor field do not have quickness in which Intel has to process information. The average speed of Intel’s microprocessor is 1.3 seconds for 300 megabytes. The closest competition comes in a far second at 3.2 seconds. So, one can see that Intel has placed itself in a completely different market than it’s’ competition.

Five years down the road, every company wants to increase in revenue, efficiency, and effectiveness. But Intel wants something different. I spoke with the Southeastern regional manager of Intel, Terry Triplett. Terry Triplett said, “It is very simple. We want Intel to become a household name for micro-chip processors.” After speaking with him, I realized that what Intel wants is when customers want a computer they demand a computer with an Intel processor. Intel is the number one producer in micro-chip processors. Nothing will get in their way as long as Intel remembers what got them to the successful level they are at right now. The best thing for Intel to do for the future is to keep coming up with technological innovations and stay ahead of their competition.

References-







Formulation, Implementation, and Control of Competitive Strategy.

























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