Research Articles Base: Corporate Venturing

Internal and External Environments

Intel case included 3 different phase and each phase need to meet the following requirements & phase 2 is linking with phase 1 and phase 3 is linking with phase 1 & 2 , Requirement: 1) Inter-dependencies between internal and external environments -> PEST -> 5-Force -> Industry Life Cycle -> Stakeholders -> Resource Audit -> Value Chain -> McKinsey 7′s Model -> Porter’s Value Chain 2) SWOT -> Key success factors 3) Strategic Fit (Strategic Drift) 4) Identifying & responding to Change -> Role -> Values and Beliefs 5) Change Management 6) Role and strategic value of Core Competence (Hamel & Parallax) 7) Strategic Value of Corporate Ventures 8) Corporate Values This paper should be base on the article of Hamel & Parallax to arrange. In this case study have 3 phases and each phase required about 700words, total is 2100 words. Credit:ivythesis.typepad.com

Internal and External Environments

Intel case included 3 different phase and each phase need to meet the following requirements & phase 2 is linking with phase 1 a...

Inter-Dependencies

Inter-Dependencies

Intel case included 3 different phase and each phase need to meet the following requirements & phase 2 is linking with phase 1 a...

Strategic Development

Strategic Development

The assignment is a case study of “Strategic Development at Intel” which has to answer below questions: – Inter-dependencies between inter...

Intel Corporation

INTEL CORPORATION Introduction             Since 1992, Intel Corporation has been the largest semiconductor manufacturer in the world when ranked on the basis of sales, achieving this position in less than twenty-five years (Moore, 1996). In this paper, we will examine the environment that surrounds the business of Intel to the world.             A brief history of Intel Corporation will be discussed first before discussing the case study requirements. History             Intel was founded in 1968 by Gordon E. Moore and Robert Nonce when they left Fairchild Semiconductor. A number of other Fairchild employees also went on to participate in other Silicon Valley companies. Intel’s fourth employee was Andy Grove who ran the company through much of the 1980s and the high-growth 1990s. Grove is now remembered as the company’s key business and strategic leader. By the end of the 1990s, Intel was one of the largest and most successful businesses in the world, though fierce competition within the semiconductor industry has since diminished its position.             Intel has grown through several distinct phases. At its founding, Intel was distinguished simply by its ability to make semiconductors, and its primary product were static random access memory (SRAM) chips. Intel’s business grew during the 1970s as it expanded and improved its manufacturing processes and produced a wider range of products, still dominated by various memory devices. While Intel created the first microprocessor in 1971, by the early 1980s its business was dominated by Dynamic random access memory chips. However, increased competition from Japanese semiconductor manufacturers had by 1983 dramatically reduced the profitability of this market, and the sudden success of the IBM personal computer convinced then-CEO Grove to shift the company’s focus to microprocessors and to change fundamental aspects of that business model. By the end of the 1980s this decision had proven successful, and Intel embarked on a 10-year period of unprecedented growth as the primary (and most profitable) hardware supplier to the PC industry. After 2000, growth in demand for high-end microprocessors slowed and competitors garnered significant market share, initially in low-end and mid-range processors but ultimately across the product range, and Intel’s dominant position was reduced. In the early 2000s then-CEO Craig Barrett attempted to diversify the company’s business beyond semiconductors, but few of these were ultimately successful. In 2005, CEO Paul Tortellini reorganized the company to refocus its core processor and chipset business on platforms (enterprise, digital home, digital health, and mobility) which led to the hiring of over 10,000 new employees. In September of 2006 due to falling profits, the company announced a restructuring that resulted in a layoff of 10,500 employees or about 10 percent of its workforce by July of 2007.             In September 2006, Intel had nearly 100,000 employees and 200 facilities world wide. Its 2005 revenues were .8 billion and its Fortune 500 ranking was 49th. Its stock symbol in INTEC, listed on the NASDAQ. Source: http://en.wikipedia.org/wiki/Intel SWOT -> Key success factors             One thing that has always been true in this industry is that recovery after a down cycle never occurs with old products. 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. The world was asking for processors with full 32-bit capability. To do so would require a sufficiently more complex chip than had been designed previously. The expected advantages included much higher performance and an architecture where software could be written to operate with greater reliability and security. This, again, was an extremely important product in Intel’s history and probably the foundation of success over the last decade.             Many of today’s chips, however, with their thousands of times increased complexity, sell for no more than did the first Intel products. The past twenty-six years have seen wild swings in the market. Shortly after Intel was founded, a recession period entered, something that actually can be advantageous for a start-up company because people and materials become more available. It is, however, a difficult time in which to grow. From 1976 through 1980, Intel and the industry enjoyed a long uninterrupted period of growth, which was terminated by another recession in the early 1980s. Intel passed the billion dollar revenue mark in the subsequent recovery, peaking in 1984 prior to the collapse in 1985. Recovery from the trough has been steady since 1986, with Intel’s annual revenue in 1995 exceeding billion. It has been an exciting twenty-seven years. Technology has progressed dramatically. In the beginning Intel was pushing the state of the art to put two thousand transistors in a chip. Now Intel puts several thousand times that many in a modern microprocessor and looks forward to this rapid evolution to continue. Strategic Fit (Strategic Drift)             There is a vast literature ascribing the success of a company to the vision, strategy, and leadership approach of its chief executive officer or more popularly know as the CEO (Bargeman, 2002).             Andy Grove succeeded Gordon Moore as CEO in 1987 at the time that Intel was recovering from defeat in its original semiconductor memory business and refocusing on its microprocessor business (Bargeman, 1994). He held the position until early 1998. Between 1987 and 1998, Intel became the clear winner with its microprocessors in the personal computer (PC) market segment. In 1998, however, Intel’s growth in the core business slowed down significantly. Also, it had become clear that new business development was relatively unsuccessful during Grove’s tenure as CEO. In 1997, Craig Barrett, then Intel’s chief operating officer (COO), observed that Intel’s core microprocessor business had begun to resemble a creosote bush, a desert plant that poisons the ground around it, preventing other plants from growing nearby. The creosote bush metaphor raised potentially interesting questions about the strategic consequences of Intel’s ability to dominate in the PC market segment. It drew attention to the phenomenon of co evolutionary lock-in: a positive feedback process that increasingly ties the previous success of a company’s strategy to that of its existing product-market environment, thereby making it difficult to change strategic direction. Little attention had been paid to how co evolutionary lock-in comes about and may become a significant source of strategic inertia. It seeks to shed light on the role of the CEO in creating a strategy-making process that leads to co evolutionary lock-in and what its implications are for organizational adaptation.             Grove described his approach as “vectoring” Intel’s strategy-making process. Vector–a quantity having direction and magnitude, denoted by a line drawn from its original to its final position (Oxford English Dictionary)–seems an apt metaphor to describe his efforts to align strategy and action. By creating a strategy vector, Grove was able to drive Intel in the intended direction with a total force equal to all the forces at its disposition. Identifying & responding to Change -> Role -> Values and Beliefs             Intel launched its advanced Pentium chip in 1994 on the wings of a marketing and communications program built on the widely recognized success of the company’s Rend-driven stream of components. The company had invested heavily in its well-known ongoing “Intel Inside” advertising campaign featuring a core message of the superiority of Intel-brand components. This communicated identity was supported by the company’s track record of successful innovations. However, during the fall of 1994, murmurs grew louder within the advanced user community that the Pentium chip was flawed for some complex computations, especially in scientific research. These user doubts and concerns were spread largely by e-mail. Although aware of the concerns among part of the user community, Intel did not undertake any public actions to rectify the underlying product problem. As the situation burst into the public arena when news of the problem “migrated” into mainstream media, and very quickly escalated into a major mass-media print and broadcast news story. The company characterized the concerns as exaggerated and the problems as likely to occur very infrequently; Intel would replace the chip only if its own analysis and judgment led it to a conclusion that the problem was serious. Very soon, as awareness and concern mounted about Intel’s Pentium chips, doubts were being cast by key stakeholders on the reliability of Intel’s positioning (Conceived Identity). Confronted with a deepening misalignment of its Communicated and Conceived identities, Intel within weeks changed its position to one of greater responsiveness to customer concerns. Through these actions, the company gradually moved to restore its traditional reputation for developing and manufacturing high-quality components (2003). Change Management             Intel is symbolic of America’s manufacturing recovery. The microprocessor is as fundamental to the new model of technology management. Intel’s production challenge is to combine the integrated design flexibility historically limited to machine shops with the throughput efficiency of the mass producers in an environment of technological complexity and rapid change. Intel’s distinctive competence is not custom-designed microprocessors but leadership in volume production of a product whose performance requirements are advancing at double-digit rates. This involves combining fast-changing technologies with leadership in chip design and production. Intel pursues systems integration and integrates over 600 activities embodying an array of technologies with deep roots in various technology and science research programs being conducted outside the company.             The production challenge addressed by Intel is not to achieve economies of scale for a given technology but to achieve continuously higher productivity and lower costs by sustained technological change. The challenge is to manage manufacturing processes involving a range of technologies to satisfy productivity advances of this dimension. Systems integration is the response. It is about building the organizational capability to incorporate rapid technological change in components into complex products. This involves simultaneous advances in integrated circuit design tools, production technologies, and miniaturization capabilities. But it also involves sustained technological innovation, which, at Intel, led to the development of a business model constituted by a leadership and design dynamic (Best, 2001). Role and strategic value of Core Competence             The decision to increase the frequency of new-chip releases was a strategic response by Intel, primarily to stronger competition from Advanced Micro Devices. Before 1996, AMD had produced several Intel chip designs under a disputed contract. In January 1996, the dispute was settled, and each company’s strategy evolved in its own way. Intel concentrated on Pentium designs, which AMD had no legal right to produce, and AMD upgraded its microprocessor design capabilities by purchasing Negev. By 1999, AMD had reduced–from over 18 months (in 1995) to almost nothing–the lag time between Intel’s release of a new design and the release of AMD’s competing chip. That prompted Intel to schedule more frequent releases, bringing the market closer to the cutting edge.             Intel’s decision was partly facilitated by improvements in the economics of producing new chips. The production of microprocessors is highly sensitive to environmental disruptions (from dust, for example), flaws in chip design, and mistakes in the fabrication process. These factors can strongly affect the yield of usable chips. For a new design to be economically viable, 70 to 90 percent of the chips produced must be of marketable quality. After 1995, companies in the industry decided to improve their manufacturing processes by exploiting technological advances–in manufacturing equipment, simulation, and wafer inspection–that reduced the number of production runs needed to get to a marketable yield. This approach allows manufacturers to reach profitable scale sooner and slightly softens the impact on margins of shorter product life cycles. Strategic Value of Corporate Ventures             The prospect of significant financial gain appears to be at the core of why many companies engage in the indirect-external form of venturing (Covina and Miles, 2002). As demonstrated most vividly by Intel’s experiences in the late 1990s, indirect-external venturing can sometimes be effectively used to “spike” corporate financial returns when core operations are not as profitable as external venture investments (IPO et al., 2000; Takahashi 2000). Takahashi (2000) reported that Intel’s portfolio of high-tech “investment” businesses increased in value from 0 million in 1997 to .2 billion in 1999. Due to recent stock market declines, the taking of equity positions in external ventures for purely financial purposes is decreasing in popularity (Williams, 2001). Nonetheless, the possibility of great wealth appreciation will likely remain a major point of appeal for the indirect-external form of venturing.             In indirect-external corporate venturing the corporation invests in a venture capital fund that targets external ventures in specific industries or technology sectors. There are at least two common variants of this form of venturing. The venture capital fund may originate outside the corporation and be managed by persons who are not corporate employees. In this case, the corporation typically operates as one of several investors in a venture capital fund, and the corporation’s interest in the external ventures targeted by the fund may be strategic or merely financial. The venture capital fund may also originate within the corporation and be managed by corporate employees ( 2002). Corporate Values             A Virtual Factory (VF) ergonomics team was formed with a defined charter and membership, as well as defined strategic objectives and deliverables. The team charter was “To resolve high priority ergonomic risk factors across multiple manufacturing sites.” The membership consisted of one person from each site whose job description included resolving ergonomic issues for his or her site. In addition, there was a management level team coach whose role was to ensure the VF ergonomics team was aligned to Intel business objectives.             The team defined its strategic objectives, which provided guidance for the team’s activities. Team deliverables were defined to direct the team’s work towards products or processes to meet the strategic objectives. Critical success indicators were defined to measure the effectiveness of the team. For example, one strategic objective was to reduce non-neutral wrist movements during product handling. A deliverable defined for this strategic objective was “To develop a human-machine interface that allows neutral wrist posture when loading 200mm wafer cassettes onto equipment.” The critical success indicator was to have four interfaces designed within six months. Another strategic objective was “To define a robust decision-making process using documented engineering criteria.” The deliverable was to have a decision-making process identified and engineering criteria defined. The critical success indicator was to have the decision-making process ratified by all sites in the first quarter of the team’s charter. These are 2 examples of strategic objectives used at Intel during the VF ergonomics team’s formation. Other objectives were developed to guide the team successfully through its first years (2001). Credit:ivythesis.typepad.com

Intel Corporation

INTEL CORPORATION Introduction Since 1992, Intel Corporation has been the largest semiconductor manufacturer in the world whe...

Intel Corporation

Introduction Intel Corporation is the leading manufacturer of microprocessors and integrated circuits. The company invented the microprocessor, which powers personal computers. More than 80 percent of the world’s personal computers use Intel microprocessors. The company also makes computer network products, memory products, servers, and supercomputers. Intel is based in Santa Clara, California. In 1998 Andrew Grove, whose engineering knowledge and aggressive drive had helped build Intel into a global powerhouse, resigned from his position as the company’s chief executive officer. He remained chairman of Intel’s board of directors (Graham, 1999).   Also that year, Intel bought the semiconductor manufacturing operations of Digital Equipment Corporation for about 5 million as part of an agreement that settled a patent dispute between the two companies. In June 1998 the U.S. Federal Trade Commission (FTC) filed an antitrust suit against Intel. The suit charged Intel with abusing its power in the market for microprocessors by withholding key technical information from computer manufacturers who had refused to license patents to Intel (Graham, 1999). The paper will discuss about Inter-dependencies between internal and external environments, SWOT analysis, Strategic Fit, Identifying & responding to Change, Change Management, Role and strategic value of Core Competence, Strategic Value of Corporate Ventures and Corporate Values. The correlations of the different methods in analyzing the case will be included in the discussions. 1. Interdependencies between internal and external environment PEST analysis Political sector The company will not get any good reputation, trust and success if it will not be aware of what is happening in the political sector of the country. The company makes sure they are aware of the political situation of the country and the company has its position with regards to political issues. The company is prepared for any problems concerning the political sector.   Economic sector The company can be said to be economically stable for the past years. Its economic stature is doing well that’s why they try to improve their products to give the best to their clients. It is not only the internal economic situation of the company should be taken note of but also the economy of the country, the company checks first the economic status of the country they are operating in before making decisions because making decisions during a difficult time on the economy of another country may cause catastrophe for the company. It also checks on how the economy of the country they are doing.   Social sector The company makes sure that the product they create will not be cause of health problems. They make sure that the proper safety standards are followed and there are no hazardous chemicals in the production of products. Technological Sector                      The company offered new innovations in the technological sector and introduced new concepts with regards to its industry. Since technology rapidly changes the company makes sure they are updated to what is happening and they can adjust to these changes. The company makes sure that the products they have are updated with regards to technology and if new technologies emerge they can compete with these products.   Porter’s five forces Potential Entrants             The company has been around for a long time and the company is not greatly affected by the new entrants. The influence of potential entrants to the company is weak. But to ensure that no other problem arise the company maintains low cost of unit production, this helps in making sure that the new entrant will not have advantage over them. Another thing that the company do is to innovate new techniques and procedures in serving the clients so that their can be product differentiation and the company has a unique product apart from the product their rivals has.    Competitive rivalry             Competition is one of the things that the company tends to focus its attention. Competitive rivalry highly influences the company. Different things are done by the company to ensure that they have advantage over their competitors one is a strategy wherein they give service straight from the heart. This kind of strategy gives the company a better relationship with the clients. Having a good relationship with clients gives them advantage over rivals. Another thing done by the company is to offer quality prices. By doing so the company lures clients away from competition. Moreover the company uses different promotional materials so that clients get to know them and so that more clients will transact with the company.   Substitutes  Substitutes give high influence to the company since substitutes can make a company lose the clients it has. The company makes sure that the substitutes won’t give them much problem. They do this by proving that the service and products they offer are the best quality and are better than substitutes. They also prove that their service is better against others by comparing and contrasting it with substitutes so that clients can know the difference. The company also tries to offer products and services superior than substitutes so that they can attract more clients. By offering superior products   Bargaining power of buyers   The bargaining power of buyers highly influences the company. It shows how good the company is doing in serving the clients. It also helps in determining how known the company is. The company makes sure that the bargaining power of buyers is high. They do this by making sure that buyers are concentrated and there are few buyers in a significant market share.   Bargaining power of sellers  The bargaining power of sellers highly influences the company. The company makes sure that their suppliers have high bargaining power through helping them show their importance in the industry.  By demonstrating the value of their suppliers the company can attract other companies to purchase the suppliers products thus their bargaining power increase.   2. SWOT analysis Strength A strength of the company is the technology it uses to create the products it has. The technology of the company is used to innovate new products and improve products that have problems. The technology the company uses modifies the field in the industry the company is competing.  Moreover a strength of the company is the well trained employees it has. The employees are trained to respond to every need of the customers and offer customer satisfaction by making sure that the products will be finished as prompt and efficient as possible and the product will be delivered to the consumers as soon as possible.   Lastly the strength of the company is its policy of making sure that the suppliers are the best in its industry. Suppliers should be well chosen since they are the ones that will provide the founding materials of the product. A wrong choice of suppliers may lead to wrong choice of product. The company has a strong policy on choosing suppliers to ensure that they can create the best products. The company chooses well their suppliers to ensure that the materials needed will be delivered in time and no production activity is hampered. The company makes sure that the suppliers have reputable identity and not in the verge of bankruptcy so that they can be assured that materials that will be used will be of high quality. These strengths of the company assist them in competing with their rivals, and helps in maintaining their status in the industry.   Weakness A weakness of the company is the limit on the products it offers. It may offer the best computer and information technology related products but it can still innovate new products not necessarily related to computers that can bring profits to the company. Clients tend to buy from company that offers vast products whether these products are related or not. Adding new products to its wide offer of products can help the company improve its status in its industry. A weakness of the company is the unequal promotion of its products. Some of the company’s product is being promoted well while some are not given focus on promotion.  Some people only know that the company produces certain computer parts, they don’t know that the company also produces software. The weaknesses that was discussed showed which aspects of the company needs to be improved, what must the company do remain long in the industry, why are the rates of their sales reach only the current level it is in, and what are the factors that keep the company from reaching its goals and objectives.   Opportunities An opportunity for Intel is to create methods and find out more ways to give employees incentives to improve employees’ performance. The company can make use of new ways to encourage employees to improve their performance and assist in making the company reach its objectives. An opportunity for Intel is to make their employees multi functioning so that they don’t have to hire more employees. Lastly an opportunity for the company is to merge with its non competitors so that they can both benefit from such endeavor. The company can merge with company’s that are doing well in another industry and from that merger they can both improve their strengths, fix or lessen their weaknesses, and conquer threats from their respective competitors.   Threats Intel’s threat includes the laws in the country they are operating in. Laws are a vital part of a country. There may be laws that can cause some delay in selling the products. These laws are enacted to protect the welfare of local sellers in that specific country.  Another threat to Intel is the tariffs and taxes that the company has in different countries. The taxes and tariffs collected by a country is a threat because this causes expenditures to a company. Furthermore a threat to the company is if the country they are operating in has economic, political and other problems. This becomes a threat when it affects business transaction in that country. This problem also becomes a threat when in the country the company is doing business in; such problem has arisen or may soon be arising.   3. Strategic Fit The mission of the company fits well with the current events in the company’s internal and external environment. Given the internal capabilities of the company and the things that are happening in its environment, the company can achieve its mission as long as it maintains its focus and it makes sure that every aspect of the company will be given proper attention.   4. Identifying and responding to change The company can know that change is needed when nothing seems going right with the company. Change is needed when everything done by a company results to more problems than more solutions. Intel makes sure that when there is a need to change the company they first discuss the benefits and disadvantage of the change. After the need for change is approved they slowly implement the change so that people can adjust to it.   5. Change Management Whenever change is needed the company has a set of procedures that helps in making sure that there is management of change. The procedures help in making sure that the effects of the change will create benefits for the company and it will help the company grow. The company needed to create changes when the internet becomes the single most important thing in the computer industry. The company responded by making sure that they have a wider horizon and that they take advantage of the internet phenomenon.   6. Role and strategic value of Core Competency Core competency can help the company having more clients and it can make the company have more advantage over competitors. Without core competency the company will not have unique qualities over their competitors. The core competency’s strategic value depends on how it affects the company and how it creates changes to the company.   7. Strategic Value of Corporate Ventures The corporate ventures are supposed to provide assistance to each other not only in terms of financial assistance but in other ways possible. Corporations having different businesses are the ones that are successful since each venture provides assistance to another for all of the ventures to gain success.   8. Corporate values             The company makes sure that its mission is in connection with its corporate values. The company makes sure that the value it has is based on proper conduct and norms and it will lead them to attain their goals. Credit:ivythesis.typepad.com

Intel Corporation

Introduction Intel Corporation is the leading manufacturer of microprocessors and integrated circuits. The company invented the micropro...

Strategic Development of Intel

A Case Study on the Strategic Development of Intel   This paper is a study on the development strategies implemented by Intel that enabled the company to maintain its competitive position in the market over the years. Introduction Integrated Electronics (Intel) is an international corporation that fosters innovation and revolutionizes technology. It commits itself into pushing boundaries of innovation for the purpose of making the lives of people easier and manageable. As a company in constant motion to the pursuit of innovation, Intel inspires its partners to develop products that drive the standards of the industry. Moreover, its end goal is not solely focused on making a faster technology but about the impact of such technologies in improving the lives of the people (2007). To achieve its mission, the company has to implement and adopt development strategies that will foster its competitive advantage in the market. This encompasses the ability to utilize internal resources in accordance with the external factors of the market. Additionally, the responsiveness to changes is a value that must be adhered. As the market changes, demands increase and thus the need for more innovations. Over the years, Intel has proved to adopt strategic approaches in order to maintain its position in the market by utilizing the most of its core competencies. This initiative is not focused on the product alone but on the entire concept of its management. Moreover, the corporate ventures of the company have become increasingly beneficial to it. This entailed the access to emerging technologies which gave Intel a somewhat monopolistic position in the market since it is the world’s largest corporate venture in technology. Internal/External Environment Since Intel was established in 1985, it has created its position in the market as a pioneer in circuit memory products. During its early years, the company was ahead of the silicon technology. Its strengths in terms of technological excellence were partnered with the goals set by the senior management. The culture it has established on its internal environment was a top down approach which is balanced with the recognition of knowledge and technical excellence. The strategic planning was informal with potential ideas from engineers and marketers assessed and supported by the top management (2005). Alongside with its early success, Intel was faced with the decision of distancing its product development areas. Additionally, technical areas to excel were one of the choices it has to create. Among its weaknesses are the internal rivalries on the technological expertise of some products. However, Intel with its new approach to technology was able to rethink its idea by shifting from being product based. Marketing developments and middle management priorities are eventually adopted by the company. Formal strategic planning was introduced but apparently resulted to repetitive business plans. Moreover, the company is faced with the challenge of broadening its horizons. The competition in the market has prompted the company to maintain its competencies and thus adopt new strategies. With the advancement of the digital age, the company remained driven by innovation to gain competitive advantage while considering its past mistakes towards becoming more market savvy. Porter’s Five Forces Model Market Competitors – horizontal collaboration with major competitor such as the Advanced Micro Devices (AMD) Suppliers – vertical collaboration with suppliers of services Buyers – partnering arrangements with lead customers such as Microsoft and Apple Substitutes – alliances with companies of digital appliances that complement and substitute PC New Entrants – collaboration with the communication, entertainment and the wireless companies such as BridgeCo, Entropic and Musicmatch. Value Chain Analysis This value chain analyzes the development to the competitive advantage of Intel. It consists of the series of activities that culminate in the total value delivered by the company to its customers. Inbound Logistics <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Independent  manufacturing process </li> </ul> Operations <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Technical excellence incorporated with the senior management. New business groups formed from the top management to propose new business plans</li> </ul> Outbound Logistics <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Alliances and partnerships with lead customers of products such as Microsoft and Apple</li> </ul> Marketing and Sales <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">The flourish of activities and ventures provide more venues for sales. The future for all kinds of  semiconductors other than that of  PC’s </li> </ul> Service <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Creation of customer relationships with the avoidance of designing products that is not desirable to them. </li> </ul> Support Activities Procurement <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">The low/high price strategy is employed to set a competitive price for a new product and at the same time offering sales on other products.</li> </ul> Technology Development <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">With the advancement of the digital age, the company’s efforts were directed to wireless technology development</li> </ul> Human Resource Management <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Recruitment process focused on the hiring staff suitable for the culture. High performances are associated with rewards.</li> </ul> Firm infrastructure <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">The culture it has established on its internal environment was a top down approach which is balanced with the recognition of knowledge and technical excellence. The strategic planning was informal with potential ideas from engineers and marketers assessed and supported by the top management</li> </ul> PEST Analysis The following is an analysis of the external macro-environment in which the Intel operates. It involves the four relevant factors including the political, economical, social and technological factors respectively. Political Factors <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Industrial Espionage and Anti Trust Laws</li> </ul> Economic Factors <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Alliances and Acquisitions </li> <li class="MsoNormal" style="line-height: 200%">Slowing of PC demand and rise of low cost PC</li> </ul> Social Factors <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%">Trust and Brand loyalty of consumers </li> <li class="MsoNormal" style="line-height: 200%">High Spending power</li> <li class="MsoNormal" style="line-height: 200%">Boost in Consumer Confidence</li> </ul> Technologic            al Factors <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="line-height: 200%"> Technological advancements prompted by Digital Age </li> <li class="MsoNormal" style="line-height: 200%">Wireless technology development </li> </ul> SWOT Analysis This analysis presents the internal and the external factors that affect the business strategy of Intel. It includes the internal assessment of the functional processes of the company by identifying its key strengths and opportunities. With the identification of these key factors for success, external factors are assessed with the weaknesses and the threats that are faced by the company. Strengths <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Company Name Recognition in Computer Brands</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Product Specialization </li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Outstanding Financial Performance</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Flourishing Company/Corporate Ventures</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Value to Employees’ Diversity and Competence</li> </ul> Weaknesses <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Technical problems on products</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Internal Rivalries on the products’ technological competence</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Informal strategic planning</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Lack of  innovation and the repetition of strategic planning </li> </ul> Opportunities <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Increasing Demand for Computer Products in the Market</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> New technologies for business innovation</li> </ul> Threats <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Presence of major competitors such as Advanced Micro Devices (AMD)</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Lack of technical areas to excel</li> <li class="MsoNormal" style="text-align: justify; line-height: 200%"> Threat of Infringement and Espionage</li> </ul> Strategic Drift and Strategic Fit As the market continues to change and the demands increase, Intel was compelled to become more flexible to cope up with the competition. Part of flexibilities is defined by its past strategic approaches and those that it has chosen to do repeatedly. Over the years, idea system of the company is focused on the ideas that are born out of their marketers and engineers. The tough competition though has necessitated the company to adopt changes and make decisions on what particular technical areas it is likely to excel. Thus, distancing the development of product areas was ensued. Fundamentally, the technical excellence was the core principle at Intel. Strategic freedom is left on the corporate managers that in turn incited internal competition in terms of technical competence of products. The strategic fit of Intel indicates how its mission and strategies fit its internal capabilities as well as its external environment. At the time when internal rivalries were experienced within the company on the issue of DRAM, it adopted new ideas focusing on the development of marketing and setting priorities on the middle management. At this same time, the potential of microprocessors was seen as a strategic direction for the company. The potential of PC though escaped the attention of managers. The corporation upon its expansion makes the informal strategy development difficult. Thus, business units established their sub committees that developed business plans submitted to the corporate. (2005)             The performance on the microprocessor industry earned the company financial gains. However, with the advent of the Internet era, more challenges are faced by Intel and thus changes are again introduced to fit the market. Given this need, internal business ventures were started. New business groups and the entire company work collaborated in proposing businesses that are externally strategic but are also deemed to foster development of internal competencies (2005). Indeed, the changes undergone by Intel since its establishment pave the way for the shaping of the marketing strategy of the company. While being driven to innovation, it continuously adopted strategies that will fit its internal abilities as well as external factors.           Additionally, Intel has found its place in the corporate venture being considered as the world’s largest. This initiative was out of the need to form alliances that will enable the company to gain insights on the latest technological developments. Clearly, it has adopted this strategy in the effort to keep up with external factors and the changing market as a whole.  Strategic Value of Intel’s Core Competencies Collaborative arrangements aimed at multiplying internal resources enable the company to gain core competencies. With the particular market it caters, the corporate core competence was focused on introducing innovative products while at the same time strengthening the internal management. As such, the coordination becomes simplified and the technologies throughout the corporation are consolidated. These processes enable a fast adaptation to changing conditions of the market while maintaining the competence to produce competitive and innovative products by the Intel. The microprocessors are determined as the core product of the company. As such, the ability to champion microprocessors is essential. After the adherence to the microprocessor, the company regained its entrepreneurial flourish. The creation of new business groups was encouraged among the top management. Thus, new businesses and ventures are created. Interface between these new business and the entire company were created for the development of internal competence and externally strategic business proposals. Managers understood the rationale for having alliances. The strategic intent of the corporate ventures was to promote technology development especially in the era of internet. Ultimately the ability of the management to combine corporate wide technologies and production skills to achieve competencies are the sources of advantage. The alliances and ventures add to the competencies of the company in terms of competing in the market. Strategic Value of Corporate Ventures Investing in ventures is an essential element for the company especially in this area wherein the new technologies entail the adoption of many players. A corporation with the enormity of Intel is able to gain insights on emerging technologies from start ups. Considering this, Intel has become the largest corporate venture in technology. Fundamentally, ventures are aimed on monitoring new technologies and finding acquisition targets. Such fosters growth and blocks other products that may compete with that of the company. Indeed, strategic reasons are behind the corporate venture program. At this, access is gained by the investing company to the technology portfolio of the company. Hence, making the investment is more of a research and development expense. Through the Intel Capital, investments and acquisitions are made for the growth of the internet economy that supports the interests of the company. Parts of the investments are hardware, software and services companies in different segments of the market such computing, investment, networking and wireless communications (2007). Intel continues to seek out and invest on companies worldwide both on established and new technologies. Part of the undertaking is the evaluation of prospective investments and guidance on business and technology to their portfolio companies (2007). Strategic Benefits of Corporate Ventures <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Development of business relationships </li> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Insights to emerging technologies in the market</li> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Reduction of potential risks on missing technological developments</li> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Blocking products that may compete with Intel’s</li> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Supplements to the research and development investments</li> <li class="MsoNormal" style="color: #385C7E; text-align: justify; line-height: 200%"> Adoption by many players of the company’s technologies</li> </ul> New activities and ventures has enabled Intel the acquisition of access and rights for dozen of new products. Moreover, it has put its efforts in promoting wireless technologies through investments. The digital age even increased the propensity to invest in other companies from those designing chips that link devices at home to those used for networking. Companies that sell software recording and organizing music are also invested upon (2005) With the strategy of having corporate venture, Intel is indeed capable of leading the industry of designing, marketing and selling chips.           Credit:ivythesis.typepad.com

Strategic Development of Intel

A Case Study on the Strategic Development of Intel This paper is a study on the development strategies implemented by Intel that enabl...

Intel case study

Introduction Intel Corporation is the leading manufacturer of microprocessors and integrated circuits. The company invented the microprocessor, which powers personal computers. More than 80 percent of the world’s personal computers use Intel microprocessors. The company also makes computer network products, memory products, servers, and supercomputers. Intel is based in Santa Clara, California. In 1998 Andrew Grove, whose engineering knowledge and aggressive drive had helped build Intel into a global powerhouse, resigned from his position as the company’s chief executive officer. He remained chairman of Intel’s board of directors (1999).   Also that year, Intel bought the semiconductor manufacturing operations of Digital Equipment Corporation for about 5 million as part of an agreement that settled a patent dispute between the two companies. In June 1998 the U.S. Federal Trade Commission (FTC) filed an antitrust suit against Intel. The suit charged Intel with abusing its power in the market for microprocessors by withholding key technical information from computer manufacturers who had refused to license patents to Intel (1999). The paper will discuss about Inter-dependencies between internal and external environments, SWOT analysis, Strategic Fit, Identifying & responding to Change, Change Management, Role and strategic value of Core Competence, Strategic Value of Corporate Ventures and Corporate Values. The correlations of the different methods in analyzing the case will be included in the discussions. 1. Interdependencies between internal and external environment Internal environment Mc Kinsey’s 7 model Shared value Intel stands for continuous innovation of products so that people will have lives that are exciting, fulfilling, and easy to manage. The company based their values on the things they can do to achieve their goal and be successful in their industry.   Strategy Intel through its leaders are trying hard to learn from its past mistakes so that they can be market savvy. The company is trying to have closer relationship with customers so that they can create products that people will purchase. The company also wants to invest in new factories. The new factories are where the best products of the company will come from.     Structure The structure of the company is decentralized wherein decisions are not made by a single person. Each department has a say on decisions that will be made. Each department communicates with each other before making any kind of decision. This structure of the company helps it to make the best decisions that in turn will be vital so that the company can create the best products that people will purchase. Systems The different systems of the company were reconfigured to make sure that the system will create changes in the way products are made. The different systems are revised according to the different concerns and needs of the department using them.   Staff The company has 92,500 employees in 48 countries .These employees are the best and the most dependable not only to serve clients but to strengthen the company’s culture and values.  The employees are highly competitive and they are given the best training so that their potential can be realized.   Style Leaders of the organization are not all the times perfect in the way they handle the job and the way they treat the personnel. Their can be times when some of the leaders act differently from what is expected from them. Leaders learn from their mistake and they correct mistakes by making sure that the actions they will make will benefit the company.   Skill Intel uses the personnel with ideas about their products and these personnel are the ones assigned to create the best products. Intel uses high tech materials so that the products they will create will have high standards. Porter’s Value chain Global value chain analysis provides another way of explaining development by tracing the amount of value added produced in the different stages of a commodity’s life from direct production through to final sale. By focusing on a specific chain it analyses a significant, but still manageable slice of the world economy. Moreover, monitoring where value is produced and appropriated highlights patterns of inequality and the potential contribution of the activities to the development of the region where they are located (2004). The company makes sure that it monitors the value of its products from all over the world. It sees to it that the products in other places are given the appropriate value it should have.  The company also makes sure that the different factors that are under inventory and supply chain are not having problems.   External Environment PEST analysis Political sector The company will not get any good reputation, trust and success if it will not be aware of what is happening in the political sector of the country. The company makes sure they are aware of the political situation of the country and the company has its position with regards to political issues. The company is prepared for any problems concerning the political sector and has different steps undertaken to counter it. Economic sector The company can be said to be economically stable for the past years. Its economic stature is doing well that’s why they try to improve their products to give the best to their clients. It is not only the internal economic situation of the company should be taken note of but also the economy of the country, the company checks first the economic status of the country they are operating in before making decisions because making decisions during a difficult time on the economy of another country may cause catastrophe for the company. It also checks on how the economy of the country they are doing.   Social sector The company makes sure that the product they create will not be cause of health problems. They make sure that the proper safety standards are followed and there are no hazardous chemicals in the production of products.  They make sure that the product they create will be accepted by the public.   Technological Sector                      The company offered new innovations in the technological sector and introduced new concepts with regards to its industry. Since technology rapidly changes the company makes sure they are updated to what is happening and they can adjust to these changes. The company makes sure that the products they have are updated with regards to technology and if new technologies emerge they can compete with these products. Porter’s five forces Potential Entrants             The company has been around for a long time and the company is not greatly affected by the new entrants. The influence of potential entrants to the company is weak. But to ensure that no other problem arise the company maintains low cost of unit production, this helps in making sure that the new entrant will not have advantage over them. Another thing that the company do is to innovate new techniques and procedures in serving the clients so that their can be product differentiation and the company has a unique product apart from the product their rivals has.    Competitive rivalry             Competition is one of the things that the company tends to focus its attention. Competitive rivalry highly influences the company. Competitive rivalry affects the decisions made by the company. Different things are done by the company to ensure that they have advantage over their competitors one is a strategy wherein they give service straight from the heart. This kind of strategy gives the company a better relationship with the clients. Having a good relationship with clients gives them advantage over rivals. Another thing done by the company is to offer quality prices. By doing so the company lures clients away from competition. Moreover the company uses different promotional materials so that clients get to know them and so that more clients will transact with the company. Substitutes  Substitutes give high influence to the company since substitutes can make a company lose the clients it has. The company makes sure that the substitutes won’t give them much problem. They do this by proving that the service and products they offer are the best quality and are better than substitutes. They also prove that their service is better against others by comparing and contrasting it with substitutes so that clients can know the difference. The company also tries to offer products and services superior than substitutes so that they can attract more clients. By offering superior products   Bargaining power of buyers   The bargaining power of buyers highly influences the company. It shows how good the company is doing in serving the clients. It also helps in determining how known the company is. The company makes sure that the bargaining power of buyers is high. They do this by making sure that buyers are concentrated and there are few buyers in a significant market share.   Bargaining power of sellers  The bargaining power of sellers highly influences the company. The company makes sure that their suppliers have high bargaining power through helping them show their importance in the industry.  By demonstrating the value of their suppliers the company can attract other companies to purchase the suppliers products thus their bargaining power increase. Industry Life cycle An Industry life cycle is divided into 4 stages. The first stage is embryonic, the second stage is growing, the third is mature and the last stage is in decline. The company is on the mature stage. It had made many mistakes and miscalculations in the past. It is trying very had to make sure that it corrects its mistake and it makes it a certain it learns from its mistakes. With experience comes maturity, the company tries to make sure that before making any decisions it has checked all the possible things that might happen and it oversee all the problems the company might face.   Resources Audit In creating the products the company needs different materials, these materials are made by the company’s trusted suppliers. The company gathers its materials and supplies from the most respected and trusted suppliers. The materials and supplies have high value and are highly reliable. The company is certain that the materials they use in producing a product is something that will make the product have high standards of quality.   2. SWOT analysis Strength A strength of the company is the technology it uses to create the products it has. The technology of the company is used to innovate new products and improve products that have problems. The technology the company uses modifies the field in the industry the company is competing.  Moreover a strength of the company is the well trained employees it has. The employees are trained to respond to every need of the customers and offer customer satisfaction by making sure that the products will be finished as prompt and efficient as possible and the product will be delivered to the consumers as soon as possible.   Lastly the strength of the company is its policy of making sure that the suppliers are the best in its industry. Suppliers should be well chosen since they are the ones that will provide the founding materials of the product. A wrong choice of suppliers may lead to wrong choice of product. The company has a strong policy on choosing suppliers to ensure that they can create the best products. The company chooses well their suppliers to ensure that the materials needed will be delivered in time and no production activity is hampered. The company makes sure that the suppliers have reputable identity and not in the verge of bankruptcy so that they can be assured that materials that will be used will be of high quality. These strengths of the company assist them in competing with their rivals, and helps in maintaining their status in the industry.   Weakness A weakness of the company is the limit on the products it offers. It may offer the best computer and information technology related products but it can still innovate new products not necessarily related to computers that can bring profits to the company. Clients tend to buy from company that offers vast products whether these products are related or not. Adding new products to its wide offer of products can help the company improve its status in its industry. A weakness of the company is the unequal promotion of its products. Some of the company’s product is being promoted well while some are not given focus on promotion.  Some people only know that the company produces certain computer parts, they don’t know that the company also produces software. The weaknesses that was discussed showed which aspects of the company needs to be improved, what must the company do remain long in the industry, why are the rates of their sales reach only the current level it is in, and what are the factors that keep the company from reaching its goals and objectives.   Opportunities An opportunity for Intel is to create methods and find out more ways to give employees incentives to improve employees’ performance. The company can make use of new ways to encourage employees to improve their performance and assist in making the company reach its objectives. An opportunity for Intel is to make their employees multi functioning so that they don’t have to hire more employees. Lastly an opportunity for the company is to merge with its non competitors so that they can both benefit from such endeavor. Merging with a non competitor can help in improving the company. The company can merge with company’s that are doing well in another industry and from that merger they can both improve their strengths, fix or lessen their weaknesses, and conquer threats from their respective competitors. Threats Intel’s threat includes the laws in the country they are operating in. Laws are a vital part of a country. There may be laws that can cause some delay in selling the products. These laws are enacted to protect the welfare of local sellers in that specific country.  Another threat to Intel is the tariffs and taxes that the company has in different countries. The taxes and tariffs collected by a country is a threat because this causes expenditures to a company. Furthermore a threat to the company is if the country they are operating in has economic, political and other problems. This becomes a threat when it affects business transaction in that country. This problem also becomes a threat when in the country the company is doing business in; such problem has arisen or may soon be arising.   3. Strategic Fit The mission of the company fits well with the current events in the company’s internal and external environment. Given the internal capabilities of the company and the things that are happening in its environment, the company can achieve its mission as long as it maintains its focus and it makes sure that every aspect of the company will be given proper attention.   4. Identifying and responding to change The company can know that change is needed when nothing seems going right with the company. Change is needed when everything done by a company results to more problems than more solutions. Intel makes sure that when there is a need to change the company they first discuss the benefits and disadvantage of the change. After the need for change is approved they slowly implement the change so that people can adjust to it.    Change Management Whenever change is needed the company has a set of procedures that helps in making sure that there is management of change. The procedures help in making sure that the effects of the change will create benefits for the company and it will help the company grow. The company needed to create changes when the internet becomes the single most important thing in the computer industry. The company responded by making sure that they have a wider horizon and that they take advantage of the internet phenomenon.   Implementation After changes has been decided the next thing for the company to do is implement the things needed to be changed. Changes in the company’s strategy don’t end in the planning stage it must be continuous and result to the company taking action. Strategic action is managed through constant verification of its effect to the business.  The effect of the changes is monitored by the company to see if the strategic action is effective and adaptable to the situation of the company. Strategic action is kept up to date through making sure that the strategy is still appropriate for the current situation of the company. 5. Role and strategic value of Core Competency Core competency can help the company having more clients and it can make the company have more advantage over competitors. Without core competency the company will not have unique qualities over their competitors. The core competency’s strategic value depends on how it affects the company and how it creates changes to the company.   6. Strategic Value of Corporate Ventures The corporate ventures are supposed to provide assistance to each other not only in terms of financial assistance but in other ways possible. Corporations having different businesses are the ones that are successful since each venture provides assistance to another for all of the ventures to gain success.   7. Key factors From the analysis the key factors that arise are the capability of the internet and the personnel in giving the company advantage over its competitors and helping the status of the company improve.   A key factor is the management team of the company who considers everything before taking any action.   8. Competitor analysis While customer analysis examines how to attract and satisfy customers, competitor analysis gives a picture of rivals’ positions in the market. Companies can use this information to concentrate on their weak spots or differentiate their product line, with the overall aim of creating their own competitive advantage. Competitor analysis should be viewed from a variety of perspectives. First, analyze competitors by how customers select a particular product or choose a company from which they purchase. Second, look at how competitors segment their market. Third, observe how customers display their various behavioral purchase patterns. And fourth, find out how competitors develop their strategies (2006).   The top competitors of the company include AMD, Samsung electronics and Texas Instruments. Among the three Samsung electronics is doing better than the company because it has higher amount of annual sales. The other two competitors have lower annual sales rate when compared to the company. As soon as the changes in the company have been realized the company will soon overcome its leading competitor.    9. Corporate values             Corporate values have an intrinsic power and they do not require justification to the organization’s members, nor to other stakeholders. Corporate culture and values make a strong contribution to shape the informal structure of any company, and may even have more influence on the growth and evolution of the firm than the structure and formal systems. When both are aligned, their combination emerges as a formidable platform for corporate growth. Corporate values are those explicit or implicit principles that predominate in any organization. Normally, they are basic, universal principles, such as respect for other employees, the endeavor to perform a task as well as one can, or the commitment to give customers the best possible service (2000).   However, the fact that they are universally known does not mean that they provide specific guidelines for action for all an organization’s members. Hence, many companies wish to formalize and specify those values that form part of a particular corporate culture, in order to facilitate their implementation by employees and their rapid assimilation by people who join the organization. These explicit or implicit values have an enormous impact on people within the organization and shape their behavior although they do not determine it completely. They are unlikely to override individual freedom, but they certainly contribute to guiding individuals’ actions in one direction or another (2000). The company makes sure that its mission is in connection with its corporate values. The company makes sure that the value it has is based on proper conduct and norms and it will lead them to attain their goals.   Credit:ivythesis.typepad.com

Intel case study

Introduction Intel Corporation is the leading manufacturer of microprocessors and integrated circuits. The company invented the micropro...