Summary of the case study
By 2005,Intel had been in the process of identifying a location to site its Assembly and Test plant. The plant was to be the biggest for the company, helping it to enhance its efficiency. Consequently, the company had to evaluate different countries putting into consideration both the global relations, dynamics and strategic operations in order to come up with the most appropriate location for the plant.
Operation costs in the majority of the South East Asian and Asian countries were the lowest globally, making these countries the most appropriate to build the plant. All the sites were evaluated based on necessities like reliability, safety, environmental health, availability of utility, rates, and human resources, among others (Alcacer and Herman 2-10).
In the end, Intel decided to locate its Assembly and Test plant in Saigon Hi-Tech Park, in Vietnam. Political instability in India made the company refrain from establishing its plant in the country. Vietnam was selected because it had low propensity to natural disasters. In addition, the cost of water and power was low, in addition to the fact that the country was civilized.
Vision, mission and value of Intel
Based on the effort that Intel exerts to ensure that it reaches all its target clients and that it offers quality products, it is evident that the company has the sole mission of offering quality products to all its clients. According to Intel Global Citizenship Report, Intel’s mission is to, “do a fantastic job for our customers, employees, and stakeholders by being the preeminent building block supplier to the world wide internet economy” (10).
The company’s vision is, “to create a continuum of personal computing experiences based on Intel architecture” (Intel Global Citizenship Report 10). The company observes a number of values, which add to its success. The values include customer orientation, risk-taking, discipline, quality, results oriented, and quality working environment.
About Intel
Noyce and Moore founded the company in 1968. Initially, the company was called NM Electronics. Later, they changed the company’s name to the current name (Integrated Electronics) or in short, Intel. The company began by manufacturing semiconductors, and later, it made a breakthrough in the manufacture of dynamic random access memory (DRAM) chip.
Soon after, the company came up with the first microprocessor. In 1972, Intel embarked on expanding it operations by establishing branches in foreign countries. Its first foreign operation was in Malaysia. In 1991, the company came up with the infamous “Intel Inside” marketing slogan (Alcacer and Herman 4-6).
The slogan facilitated to entrench the company’s brand in the mind of most computer users. Andy Grove, the longest serving employer, was made the chief executive officer of the company. Under his stewardship, the company’s income grew by over sevenfold, and the value of its shares grew by 1600 percent.
In 2005, Intel was the global manufacturer of semiconductors, delivering over 80 percent of the central processing units installed in workstations, personal computers, and servers. According to Alcacer and Herman, “… the central processing units (CPUs) accounted for 90 percent of the company’s total profit” (6).
Apart from the CPUs, the company also manufactured flash memory and chipsets for personal computers. Its principal customers were Hewlett-Packard (HP) and Dell. In 2004, the company sold 19 percent and 16 percent of its products to Dell and HP respectively.
Alcacer and Herman posit, “In 2005, the semiconductor industry generated approximately $226 billion in revenue worldwide” (2). Today, Intel has research laboratories in strategic countries across the globe. The laboratories help the company in coming up with superior specifications for its microprocessors and semiconductors.
This triggered the company’s desire to establish numerous branches across the globe to facilitate in the exploitation of the semiconductor industry. The company continues to open branches in countries, it perceives to be strategic, having a wide consumer base.
SWOT analysis
Strengths
- Intel has a superior brand, and it enjoys the biggest market share globally.
- Intel Company has a stronger market position relative to its rivals.
- Intel offers the state-of-art products that meet the changing technological needs.
- Majority of the computers use Intel’s microprocessors
- Intel enjoys over 80 percent of the market share, making it almost a monopoly in the industry.
- Intel has numerous branches across the global, which allow it to reach a wide customer base.
Weaknesses
- Intel has neglected the mobile market, which is anticipated to have a significant influence in the internet in future
- Because Intel sells its products at low prices, it does not benefit from economies of scale
- Intel has a wide market; nonetheless, it pays limited attention to its customers
- At times, Intel is unable to face technical challenges brought about by its competitors
Opportunities
- Intel can benefit from partnership, alliances, and relations it establishes with other companies
- Intel is targeting the emerging markets
- Intel can cut down on production cost by embracing forward and backward inclusion
- Intel can merge with other brands to consolidate its market share
Threats
- Changes in consumer taste might lead to Intel losing customers to rival companies
- International Business Machine (IBM) and Dell continue waging stiff competition
- New companies are making it hard for Intel to maintain its market share
SWOT matrix
Source:Chapman
Current and future strategy
Initially, Intel focused on selling its brand across the globe. This underlines the reason why the company opened numerous branches across the world. Currently, the company focuses on a strategy that aims at increasing and sustaining its consumer base. Intel has moved from business marketing to consumer marketing.
The company has realized that the majority of the young adults do not take long to purchase a new computer once their computers break. Hence, the company now focuses on generation Y, which comprises the biggest portion of Intel’s target market (Norris 14-19). Moreover, the company hires staff with diverse skills. The staff works together to come up with products that meet all the consumer needs.
Establishing new markets and coming up with new products are some of the Intel’s future strategies. Recently, the company has announced that it would collaborate with Google to introduce new capabilities in the market. The company seeks to enhance user experience, and at the same time, to introduce novel products in the market. For instance, in collaboration with Google, Intel Corporation intends to develop Chrome operating system and Ultrabook system, which will enhance computing (Norris 20-24).
Conclusion and recommendation
Since its initiation, Intel Corporation has managed to come up with startling innovations in the computing world, leading to its current success. For instance, its success in semiconductor and microprocessor fields is unparalleled until today.
Despite the immense success, other companies are emerging, posing a threat to Intel’s market share. Companies like IBM and Dell are enjoying positive reception in the market. In the process, Intel is losing some of its customers to these companies. This underlines why Intel Corporation has embarked on a strategy to consolidate its market share.
Rather than selling the brand, the company now targets its consumers. Intel intends to convince the consumers about the quality of its products, therefore, wining their trust. To continue enjoying the current success, Intel ought to identify new markets and establish its operations there. Besides, the company ought to focus on the mobile market, as the market will have a significant influence in the future.
Works Cited
Alcacer, Juan and Herman Kerry. Intel: strategic decisions in locating a new assembly and test plant. 2012. Web.
Chapman, Alan. SWOT analysis method and examples, with free SWOT template 2012. Web.
Intel Global Citizenship Report. Vision & Values. PDF file. 2011. Web.
Norris, Donald G. ““Intel Inside” Branding a component in a business market.” Journal of Business & Industrial Marketing 8.1 (2008): 14-24. Print.