Strategy Development at Intel

Document Type:Case Study

Subject Area:Management

Document 1

This case study also evaluates the impact of management control systems and organizational culture. Is Intel adapting to change? Intel is the world largest organization that specializes in making semiconductor chips for laptops and computers. It is an American based company which has the highest revenue globally in the semiconductor chip with almost every computer having Intel chips today. The entry of Japanese competitors in the DRAM market had a profound impact on the leadership strategy of Intel. When the prices declined, Intel shifted their capital allocation away from DRAM. Currently, the future of Intel lies on the core growth areas of cloud and data center, IOT (internet of things), programmable and memory solutions. Therefore, Intel has focused on cloud growth to support the expansion of analytics and virtualizations. It is important to note that the PC business is still the bed lock of Intel hence it has continued to innovate in this business aggressively. Intel has also embarked on driving innovation across the fast-growing IoT category. Intel's Competitive Advantage Competitive advantage comprises of things that a company has or does something better than their competitors. Intel enjoys a competitive advantage as a result of economies of scale, cost, government protection and customer captivity. Historically, Intel has used DRAM has their technology driver that lead to development and improvements of the company's processes. Intel has been described as "manufacturing monster". The company can develop its products and bring them to the market faster than anyone else in the industry (Kim & Lee, 2009).

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Through this, the company can leverage its manufacturing capability. Its production process is automated and uses sophisticated robotic machines to ensure accuracy. The company also ensure that the computer chips it produces serves different market segments depending on gender, age, or geographic location. For instance, the DRAM'S technology strategy employed by Intel is matched with its market differentiation strategy. Intel also designs quality products that incorporate new technology which combines market led, product led, and user-led features. The Vision and Mission of Intel Intel vision statement is "if it is smart and connected, it is best with Intel. Also, the company may face price wars from the ongoing PC producers due to strong competition. A major threat that Intel faced was changing customer preferences and tastes that may reduce brand loyalty.

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Strategic Management/Planning Andy Grove said that "if you want to know an organization's strategy. Don't ask, observe". This appears to be the situation in the case of Intel in 1985. This lead Intel to make a net loss of $ 173m in the year 1986. Social, cultural factors The arrival of the era of the internet in the year 1988 challenged the company to broaden their horizons. Therefore the company not only needed to maintain design competence and product development but also understand the needs of the users. Technological factors. The increasing adoption of mobile devices at homes was a great threat to the Intel as at the time it only focused on processors for desktops and laptops and not smartphones. Increased adoption of mobile devices 5% 2 0. Changing customer tastes and preferences 15% 1 0. IFE Matrix Internal factor evaluation matrix is a strategic tool that used to perform the internal strengths and weaknesses of a firm.

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Below is the IFE matrix of Intel: Key internal strategic factors Weight Rating Weighted score Strengths 0. Globally recognized brand 0. Below is the CPM matrix of Intel: Intel corporation Japanese companies Critical success factors weight Rating Score Rating Score Product differentiation 0. Product quality 0. Customer service 0. Market share 0. Global expansion 0. Therefore Intel uses "vendor-driven" system of managing inventory to respond to any fluctuations in customer demands. Marketing and sales Due to the wireless technology development, Intel used a web-based system on the web to reduce errors by 75%. Also, they were able to take orders round the clock and eased transaction Service Intel provides a variety of service to other customers such as wireless, networking, and communications. Business strategies, software development, and hardware design. Through these services and other strategic alliances, Intel can add value to their customers.

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Japanese had very strong manufacturing lines with low cost of capital as they viewed DREAM as a strategic component for Intel. Therefore they sought to dominate the market. Intel's customers' bargaining power The change from "techies" to "purchasing department" by customer was a huge blow to Intel as they required greater emphasis on price, quality and reliability Intel's supplier's bargaining power Intel required equipment suppliers for innovation which mostly came from Japan. Therefore, Japanese suppliers preferred to work with their Japanese firms rather than Intel. Threat of substitute Due to low switching costs and high availability of substitute products from the Japanese firms. Pearson Education. Kim, W. Lee, J. D. Measuring the role of technology-push and demand-pull in the dynamic development of the semiconductor industry: the case of the global DRAM market.

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IEEE Micro, 1(1), 8-21.

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