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