Economics for the Global Manager: Free Essay about Intel Company

Published: 2022-04-21 09:24:34
Economics for the Global Manager: Free Essay about Intel Company
Type of paper:  Report
Categories: Company International business SWOT analysis
Pages: 7
Wordcount: 1819 words
16 min read
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Intel is one of the pioneering American tech companies and the second largest producer of semiconductor chips by revenue globally. At the time of its establishment in 1968, it was known as Integrated Electronics Corporation and headquartered in California. Intel is widely known for its invention of x86 series of microprocessors commonly used in modern computing devices as well as graphics chips, integrated circuits, network interface controllers, motherboard chipsets and other computing and communication devices (Jargosch and Jurich, 2014). In the 1990s, Intel started an aggressive advertising campaign known as "Intel Inside" which resulted in Pentium brand names known as home-used processors.

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Until 1981, Intel was recognized by static random access memory (SRAM) and dynamic random access memory (DRAM) chips. In the late 1980s, the company changed its business model and repositioned itself to focus on microprocessors. As the primary supplier of microprocessors to IBM, Intel started a 10-year campaign that would make it the leading hardware supplier to the computer industry (Markoff, 2015). In the mid 2000s, Intel's main competitor, AMD, increased its market share for microprocessors which greatly diminished Intel's dominance. In response, Intel engaged in several activities in an attempt to diversify its business beyond microprocessors but only a few of them succeeded. In 2006, the company sold the XScale processor unit to Marvel Technology Group so that it could focus its resources on the x86 unit and the production of servers. Four years later, Intel acquired two companies and McAfee in 2011. The acquisition of McAfee enabled Intel to its technology in smartphones, laptops, tablets, and embedded computers.

Intel's Vision, Mission, Values, and Objectives

Intel has a vision of promoting a boundless and continuous innovation to make people's lives more fulfilling, enthusiastic, and manageable. Its vision has inspired commitment to efforts that have transformed the world without limits. In addition, Intel has the vision of becoming the most preferred business solutions and computer technologies including hardware, software, and consultancy services that sufficiently enable and improve the living standards of communities across the world and improve connectivity of big computers globally in the future.

Intel's mission is to make their customers, shareholders, and employees happy through relentless delivery of platform and technology improvements that become integral to how people live and work.

Intel's values include results orientation, quality, risk-taking, discipline, customer orientation, and a great working environment.

Its objectives include providing unparalleled platforms and microprocessors, grow the company's profitability globally, advance their manufacturing leadership and silicon technology, and achieve excellence in client orientation.

Leadership and Organizational Structure

At the time of its establishment in 1968, Robert Noyce was Intel's CEO and was later succeeded by his co-founder Gordon Moore in 1975 (Lidsky and Moore, 2003). In 1979, Andy Grove became the company's president and introduced the CEO title when Moore became the chairman in 1987. Moore was succeeded by Grove in 1998 and Craig Barret who was serving as the president became the CEO. Since then, the power mantle has exchanged hands severally until recently when Brian Krzanish was elected the company's sixth CEO. Intel has a policy that requires CEOs to retire at the age of 62. Although the CEO's position has been held by many people, Otellini is considered one of the most effective leaders mainly due to increase in revenues by 55.8% and net income by 46.7%. The efficiency of the company's leadership structure has received a lot of accolades internationally including the Financial Times magazine that described Intel's board of directors as a perfect example of corporate governance at its best and rated it ten stars (Sonnenfeld, 2003). That was a great achievement because only 21 other company boards have received a similar recognition globally.

One of the notable company's cultures is its tendency to promote from within especially the top executive team. For instance, Paul Otellini had worked for Intel for thirty years before becoming the CEO. Its resistance towards outsiders is demonstrated by the immediate subordinates of Otiellini who had risen through the ranks in the firm over the years. Mostly, the top leadership comprises of people who have worked with Intel throughout their careers.

Intel's head offices are situated in Santa Clara, California but the organization has numerous operation bases worldwide. Washington County has the largest company's workforce globally with over 18,600 employees. As a multinational company, Intel has facilities in Costa Rica, Israel, China, India, Vietnam, Russia, Argentina, and in other 56 countries. Given its large and diverse workforce, Intel has adopted diversity initiatives targeted to its clients and employees. In fact, Intel was one of leading to sanction corporate Gay, Lesbian, Bisexual, and Transgender employee groups, Bible-based Christian group, Muslim employees group, and a Jewish employees group (Jobs at Intel, 2017). Intel's respect and commitment to diversity saw it receive a 100% rating on the Corporate Equality Index released in 2002. In addition, the company has been listed as among the 100 best companies for working mothers since 2005 to 2017 (2017 Working Mother 100 Best Companies, 2017).

Swot Analysis

Strengths

The field-programmable gate array technology (FPGA) is a key strength of Intel. Intel acquired Altera in 2015, an electronics company that manufactured and produced FGPA (Darrow, 2015). The acquisition of Altera has enabled Intel to produce reprogrammable chips that have significantly expand and strengthen their servers as well as optimize their data centres. The demand for FPGA has been increasing mainly due to telecommunication companies integrating their networks with the Internet of Things-enabled devices.

Another Intel's strength is Artificial intelligence that has been described as the next big thing in the computing world. Intel is focused on maximizing the benefits of this market niche as demonstrated by the recent purchase of Nervana and Movidius to help in improving its AI portfolio. Nervana chips transfer data at a rate of 2.4 terabytes per second and have a ten times low latency than traditional chips (Pressman, 2016). The combination of Nervana's sophisticated learning framework with Intel's advanced fabs and vast resources, the company will be able to become the leader in the AI sector.

Intel has an efficient big data analytics platform. In 2015, the company's management demonstrated this by developing new strategies to assist the sales and marketing group (SMG) earn more revenues. The new strategies have enabled the SMG to make more informed decisions on prices and future demand by leveraging machine learning and big data. As a result, the group recorded an increase of $1 billion in revenues (ACG Silicon Valley, 2017). It is expected that this trend will continue in the future where the sales and marking department will work closely with the IT department to optimize and increase sales as well as develop more focused marketing campaigns.

Brand recognition is perhaps the key strength for Intel. After the realization that the Intel Inside campaign had become unpopular, the branding team refocused their efforts to come up with "create amazing experiences outside" campaign. The new campaign involved hosting highly publicized and highly-visible e-sports events and unique and breathtaking visual graphics. The new campaign helped the company engage with their customers at a humane level, improved its retail and B2B strategies, and reimagined the company's sales and marketing efforts. The new strategy has seen Intel's rank in terms of brand value rise to position 40 worldwide in 2016. When ranked among technology companies, Intel is position 7 with a brand value of $22.845 (Finance, 2017). In addition, The Fortune Magazine ranks Intel number 46 in terms of the most admired companies globally.

(Finance, 2017).Intel is highly committed to research and development. The company constantly looks for ways to make its products and services better, faster, and more efficient. As a result of their commitment, they have gained a competitive advantage over their competitors. In fact, the Global Innovation 1000 of 2016 ranked Intel position 5 as among the most innovative companies.

Strong market presence is another key strength for Intel. The company is the largest microchip manufacturer in the world in terms of revenue. This has created a barrier for new entrants and the competitors as well a competitive advantage for the company.

Weaknesses

Intel's biggest weakness over the years has been its inability to enter the smartphone market. At the time of the smartphone boom, Intel had dominated the personal computer segment (Michell, 2010). Contrary to what was expected, Intel's reputation in the PC market turned out to become its greatest weakness in a boom in mobile products. Market analysts have attributed this to the fact that Intel's powerful x86 design was well suited for high-performance personal computers connected to the mains while the design requirements of smartphones were different. As a result, AMD and Qualcomm overtook Intel to become the leaders in the smartphone segment.

A significant percentage of Intel's revenues is generated from the PC segment. In the recent past, there has been a decline in the demand for PCs mainly due to the increased popularity of smartphones. This has come to be a major concern for the company as it has come up with new ways of generating income. In addition, most revenues come from the computer segment where Intel has been the dominant player. As this market segment continues to diminish, the company must look for other markets for its products (Milkyway Media, 2018).

Opportunities

The advent of computer era is a huge opportunity for Intel. As time goes by, the demand for computers has been increasing and will continue to increase as long as the world becomes more digital. As more technologies and computer devices continue to emerge, Intel can come with innovative ways of making their new products appealing to the clients (Milkyway Media, 2018). Successful implementation of this strategy would see the company increase its market share significantly.

Smartphones, drones, and automatic cars are all vital opportunities for Intel (MIC Research Team, 2016). The smartphone segment is on the rise and Intel could benefit by entering the market and developing high-performance chips for the gadgets. Further, drones have become popular and will in future become the core of surveillance, logistics, among other tasks. Successful execution of these tasks will only happen if the processors used to develop the drones have high energy efficiency and high performance. Hence, manufacture of processors for drones is a promising future opportunity for Intel. Similar to drones, automatic cars are in high demand. The level of their efficiency is dependent on the processors used hence an opportunity for Intel.

With the increase in demand for connected devices, manufacturers of semiconductors will benefit from IoT both directly and indirectly. IoT devices must have a microcontroller, several sensors for data collection, and chips to facilitate data transmission (Jargosch and Jurich, 2013). For Intel, this is a unique opportunity to supply the companies with processors specifically developed for IoT devices in the car, healthcare, energy, and other industries.

In addition, Intel will indirectly benefit from the data collected by the devices using IoT. The collect...

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