The main purpose of this case analysis is to find the issue and problem that Intel Corporation faced and how they improve their performance and solve problems. First, I will summarize the history of Intel Corporation. Second, to point out the challenge that Intel Corporation has. And, third, I will use SWOT analysis to analyze the internal strengths and weakness and external opportunities and threats of Intel Corporation. Eventually, I will give some recommendation.
History of Intel Corporation
Intel Corporation is a leading microprocessor producer for personal computer (PC) in the world. Intel Corporation was formed by In 1968, Robert Noyce and Gordon Moore founded Intel Corporation. After Intel Corporation founded, they recruited several employees from Fairchild Semiconductor to help them. Intel Corporation was mostly influenced by Andy Grove. He was an autocratic leader and gave everyone lots of pressure. Under his rules and management style, Intel Corporation set a good culture result in the future success.
Since the dawn of the Intel Corporation, it has gained the leading position in semiconductor industry such as memory chip and microprocessor. Intel invested heavily in their R&D department in order to strengthen their innovative leading position to against competitors. However, in recently years, the personal computer industry appears the negative growth rate which may harm for Intel business due to the majority business comes from personal computer. Therefore, Intel Corporation should take a consideration of downward sign to seek opportunity to exploit the blue ocean market.
SWOT analysis of Intel
1. Product Diversification
Intel has variety products such as processors, motherboards, servers, cable modems, and solid state drive. Although Intel has dominated the market, it still put a lot of efforts on their product innovation. Diversification of Products integrated not only provides customers one-stop purchasing but also attract different field customers.
2. Technology Innovative and Strong R&D Competence
Intel fully understands R&D is the key to allow them to lead in high tech industry. Moreover, the customers will never feel satisfaction with buying the same or few types of microprocessors. In order to satisfy various demands, Intel always spend huge amount and put a lot of efforts into their R&D department which makes Intel is able to introduce new products before its competitors. Consequently, Intel can provide the choices to the demand from high-end product with high price and the low-end demand with lower price.
3. Economic of Scale
Intel has almost dominated the PC, laptop, and corporate computer’s CPU which allows Intel to build up highly barriers for the new entrants because of the large economies of scale. Once Intel reaches the economies scale, they have a significant cost advantage over its competitors and that this dominant ability will make its competitors are essentially price takers, with little power to set up their own prices.
1. The Struggle of Expanding Smartphone Business
Many experts claim that the smart phone will be flagship product in high tech industry for next decades. However, currently, ARM (The Architecture for the Digital World) dominates the smart phone chip market and acknowledges the first mover advantaged. As a result, it is very difficult to expand smart phone chip business for Intel and lose its competitive advantage.
2. Downward Microprocessor Demand
As I mentioned before, smart phone may take some market away from PC and laptop. Currently, the demand of PC and laptop’s CPU is decline but Intel cannot take any advantages on smart phone chip. Moreover, the majority of Intel’s business comes from Microprocessor which is very risky for Intel. As long as the demand drops dramatically, it will greatly harm for Intel. Opportunities
1. Keep Innovative Competitive Advantage
Technology Innovation is a key to success in rapid changing and highly competitive high tech industry. Keeps it pioneering introduction new product will develop the entry barriers and gain the competitive advantages.
2. Product Improvement
Recently, Intel has launched it smart phone processor chip to compete with ARM face to face. Although, their chip works better than ARM, their chip cost more power than ARM. Therefore, it is a very good opportunity to grasp market share that if Intel improve their product based on their strong R&D.
1. Globally Downward of Consumer Purchasing Power
Economic crisis will trigger the downward pressure on consumer purchasing ability. Laptop and personal computer is consumer product when the decreased personal income will affect the demand. Consequently, the decreased of the demand will lead to negative impact on Intel’s sales and profits.
2. The Fighting Campaign from Competitor
Although Intel has become the biggest company, they still need to pay attention on their competitor-AMD. The decisions made by Intel are highly dependent upon the action of their rivals. Intel needs to closely put their eye on AMD to avoid any technology fall behind to keep their leading innovation.
Intel should strengthen their PC and sever business by using technical leadership because the PC segment still estimates to have a growing market approximately 17% worldwide. Intel can launch more marketing campaigns and put more efforts on developing new technology to exploit more business. Intel can expand products into new device. The computing landscape is changing such as smart phone, smart phones, and tablets are connecting to the internet and become more intelligent. Intel should be more aggressive to pursue opportunities to expand their business in new device categories.