A Case Study on the Strategic Development of IntelThis 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 technical areas to excel were one of the choices it has to create. entertainment and the wireless companies such as BridgeCo. the company is faced with the challenge of broadening its horizons. Intel was faced with the decision of distancing its product development areas. Among its weaknesses are the internal rivalries on the technological expertise of some products. Value Chain Analysis . 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. However.down approach which is balanced with the recognition of knowledge and technical excellence. With the advancement of the digital age. Intel with its new approach to technology was able to rethink its idea by shifting from being product based. Moreover. Alongside with its early success. Entropic and Musicmatch. The competition in the market has prompted the company to maintain its competencies and thus adopt new strategies. Marketing developments and middle management priorities are eventually adopted by the company. Formal strategic planning was introduced but apparently resulted to repetitive business plans. Additionally. the company remained driven by innovation to gain competitive advantage while considering its past mistakes towards becoming more market savvy. The strategic planning was informal with potential ideas from engineers and marketers assessed and supported by the top management (2005). The future for all kinds of semiconductors other than that of PC’s Service • Creation of customer relationships with the avoidance of designing products that is not desirable to them. the company’s efforts were directed to wireless technology development Human Resource Management . It consists of the series of activities that culminate in the total value delivered by the company to its customers. Technology Development • With the advancement of the digital age.This value chain analyzes the development to the competitive advantage of Intel. Inbound Logistics • Independent manufacturing process Operations • Technical excellence incorporated with the senior management. New business groups formed from the top management to propose new business plans Outbound Logistics • Alliances and partnerships with lead customers of products such as Microsoft and Apple Marketing and Sales • The flourish of activities and ventures provide more venues for sales. Support Activities Procurement • 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. social and technological factors respectively.• Recruitment process focused on the hiring staff suitable for the culture. It includes the internal assessment of the functional . High performances are associated with rewards. economical. Firm infrastructure • 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. Political Factors • Industrial Espionage and Anti Trust Laws Economic Factors • • Alliances and Acquisitions Slowing of PC demand and rise of low cost PC Social Factors • • • Trust and Brand loyalty of consumers High Spending power Boost in Consumer Confidence Technologic • • al Factors Technological advancements prompted by Digital Age Wireless technology development SWOT Analysis This analysis presents the internal and the external factors that affect the business strategy of Intel. It involves the four relevant factors including the political. The strategic planning was informal with potential ideas from engineers and marketers assessed and supported by the top management PEST Analysis The following is an analysis of the external macro-environment in which the Intel operates. The tough competition though has necessitated the company to adopt changes and make . With the identification of these key factors for success. Part of flexibilities is defined by its past strategic approaches and those that it has chosen to do repeatedly. Strengths • • • • • Company Name Recognition in Computer Brands Product Specialization Outstanding Financial Performance Flourishing Company/Corporate Ventures Value to Employees’ Diversity and Competence Weaknesses • • • • Technical problems on products Internal Rivalries on the products’ technological competence Informal strategic planning Lack of innovation and the repetition of strategic planning Opportunities • • Increasing Demand for Computer Products in the Market New technologies for business innovation Threats • • • Presence of major competitors such as Advanced Micro Devices (AMD) Lack of technical areas to excel Threat of Infringement and Espionage Strategic Drift and Strategic Fit As the market continues to change and the demands increase.processes of the company by identifying its key strengths and opportunities. Over the years. idea system of the company is focused on the ideas that are born out of their marketers and engineers. external factors are assessed with the weaknesses and the threats that are faced by the company. Intel was compelled to become more flexible to cope up with the competition. more challenges are faced by Intel and thus changes are again introduced to fit the market. Thus. Thus. The potential of PC though escaped the attention of managers. Intel has found its place in the corporate venture being considered as the world’s largest. it adopted new ideas focusing on the development of marketing and setting priorities on the middle management. While being driven to innovation. At this same time. Additionally. The strategic fit of Intel indicates how its mission and strategies fit its internal capabilities as well as its external environment. With the particular market it caters. the . Strategic Value of Intel’s Core Competencies Collaborative arrangements aimed at multiplying internal resources enable the company to gain core competencies. the changes undergone by Intel since its establishment pave the way for the shaping of the marketing strategy of the company. it has adopted this strategy in the effort to keep up with external factors and the changing market as a whole.decisions on what particular technical areas it is likely to excel. Strategic freedom is left on the corporate managers that in turn incited internal competition in terms of technical competence of products. Indeed. business units established their sub committees that developed business plans submitted to the corporate. The corporation upon its expansion makes the informal strategy development difficult. the technical excellence was the core principle at Intel. distancing the development of product areas was ensued. Given this need. internal business ventures were started. Fundamentally. At the time when internal rivalries were experienced within the company on the issue of DRAM. 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). with the advent of the Internet era. This initiative was out of the need to form alliances that will enable the company to gain insights on the latest technological developments. Clearly. However. the potential of microprocessors was seen as a strategic direction for the company. (2005) The performance on the microprocessor industry earned the company financial gains. it continuously adopted strategies that will fit its internal abilities as well as external factors. The strategic intent of the corporate ventures was to promote technology development especially in the era of internet. Managers understood the rationale for having alliances. Through the Intel Capital.corporate core competence was focused on introducing innovative products while at the same time strengthening the internal management. As such. ventures are aimed on monitoring new technologies and finding acquisition targets. Intel has become the largest corporate venture in technology. Fundamentally. A corporation with the enormity of Intel is able to gain insights on emerging technologies from start ups. The microprocessors are determined as the core product of the company. new businesses and ventures are created. The alliances and ventures add to the competencies of the company in terms of competing in the market. the company regained its entrepreneurial flourish. Hence. Interface between these new business and the entire company were created for the development of internal competence and externally strategic business proposals. investments and acquisitions are made for the growth of the internet economy that supports the interests of the company. the coordination becomes simplified and the technologies throughout the corporation are consolidated. Indeed. As such. the ability to champion microprocessors is essential. Parts of the investments are hardware. 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. After the adherence to the microprocessor. Thus. strategic reasons are behind the corporate venture program. The creation of new business groups was encouraged among the top management. 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. software and services companies in different segments of the market such computing. Considering this. Such fosters growth and blocks other products that may compete with that of the company. At this. investment. networking and wireless . Ultimately the ability of the management to combine corporate wide technologies and production skills to achieve competencies are the sources of advantage. access is gained by the investing company to the technology portfolio of the company. making the investment is more of a research and development expense. Moreover. 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. Intel is indeed capable of leading the industry of designing. it has put its efforts in promoting wireless technologies through investments. Part of the undertaking is the evaluation of prospective investments and guidance on business and technology to their portfolio companies (2007).communications (2007). . Companies that sell software recording and organizing music are also invested upon (2005) With the strategy of having corporate venture. marketing and selling chips. Strategic Benefits of Corporate Ventures • • • • • • Development of business relationships Insights to emerging technologies in the market Reduction of potential risks on missing technological developments Blocking products that may compete with Intel’s Supplements to the research and development investments Adoption by many players of the company’s technologies New activities and ventures has enabled Intel the acquisition of access and rights for dozen of new products. Intel continues to seek out and invest on companies worldwide both on established and new technologies.