Strategic Analysis of Intel Corporation

Intel Corporation is a leading manufacturer of microprocessors and other semiconductor products. The company has its headquarters in Santa Clara, California, but operates globally with a significant presence in countries such as Washington, China, Israel, and others. Intel's pricing strategy is based on factors such as market conditions, competitor pricing, and product features, resulting in lower prices than competitors. The company uses branding campaigns like 'Intel Inside' to promote its products and has leveraged mass marketing strategies for a wider reach. Intel's focus on innovation and quality enables it to capture the large existing market and provides high customer satisfaction. The organization should continue to expand its business activities by enhancing its product portfolio.

Marketing Management
Intel Corporation

Table of Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................3
Current Marketing Situation............................................................................................................3
Market Segments..........................................................................................................................3
Product.........................................................................................................................................5
Competitive Analysis...................................................................................................................6
Distribution..................................................................................................................................7
SWOT Analysis...............................................................................................................................7
Objectives........................................................................................................................................9
Sales Volume...............................................................................................................................9
Market Share..............................................................................................................................10
Profit...........................................................................................................................................10
Marketing Mix...............................................................................................................................11
Recommendations..........................................................................................................................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................15
1

Executive Summary
Intel is a famous multinational American organization which is expertise in producing
microprocessors and different other parts of the personal computer. As per the growing
developments, different types of modern concept, theories, and technologies are introduced in
the information technology industry. In this paper, we will discuss the current situations of the
Intel organization. We have analysed the different perspectives of the organization such as its
market segment, product, competitor analysis, and various others. All these help us in providing
a solid knowledge about the current market position of the organization and its strategies to deal
with its competitors. A deep analysis of organization provides us knowledge about the core
products of the organization which help the organization in gaining competitive advantage and
large size of shares in the existing market. If the organization want to gain regular success in the
global market, then it should focus more on maintaining the existing quality of its products with
which it can represent itself in the market. The quality of its products and innovative technology
will become the main factor on the basis of which the organization can make itself the leader of
its products like microprocessors. Thus, the overall knowledge about the market position and its
strategies provide us with a glimpse about the organization which can be used in future products
significantly.
2

Introduction
Intel Corporation is known as an American Multinational Corporation which specializes in
manufacturing high technical products and services. It is a technology organization whose
headquarter situated in Santa Clara, California. Intel established by Robert Noyce and Gordon
Moore. In this paper, we will study about the competitive position and capabilities of the market
in meeting the different requirements of the market. External environment and SWOT analysis
study enable us to know the features, and qualities of the organization to survive in the market on
long term basis (Spoon, 2014). The organization considered as a highest valued semiconductor
chip manufacturers as per its revenue. It is considered as an inventor of the x86 series of
microprocessors. The quality of products makes the organization different from the other
existing organizations. Intel Corporation provides different processors for computer system
producers like Lenovo, Dell, Apple and Hewlett-Packard. It is an organization which spent a
huge amount of its revenue in conducting research and development activities. The high quality
of research enables it to introduce innovativeness in its product. The organization was
established in 1968. It deals with a range of products such as motherboard chipsets, flashes
memories, embedded processors, network interface controllers, graphics chips, and other devices
related to computing and communications.
Current Marketing Situation
Market Segments
Intel operates through the following business segments: Client Computing Group (CCG), Data
Center Group (DCG), Internet of Things Group (IoTG), and Software and Services Group
(SSG). The CCG segment includes all the platforms that have been crafted for tablets, desktops,
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notebooks, wireless, phones, mobile communication, etc. The DCG includes platforms that have
been crafted for communications infrastructure, enterprise, cloud, technical computing segments,
etc. Intel has an intense competition with Avago Technologies (AVGO) in this particular
segment, and with the acquisition of Broadcom (BRCM) by Avago, a big deal has been created
in the data center market (Annual Report, 2015). On combining these two, Intel has been facing
a run for its own money in the marketplace.
On the other hand, the Internet of Things Group includes retail, industrial, transportation, home
and building use along with other market segments. The Software & Services Group includes
software products for delivering solutions that help in securing networks, mobile devices,
computers and software products and related services which help in the promotion of the Intel
architecture as the perfect platform for the development of software.
(http://files.shareholder.com/downloads/INTC/1830462424x0x883908/C237A7E5-BD77-4792-
BCFD-8019EFEBAAB9/Final_2016_Proxy_Statement_web.pdf)
4

Product
The organization provide a different range of products and technologies, containing a chipset,
microprocessor, multichip package or SoC. A microprocessor- the central processing unit of a
computer system- controls devices or processes system data in the different systems. The
organization offer single or multiple processors in different cores.
A chipset transmits data between the input and the microprocessor, storage devices and display
like a mouse, hard drive, optical disc drives, and monitor
(http://csimarket.com/stocks/compet_glance.php?code=INTC). Chipset enhances the video,
audio and other capabilities in a systems to perform different logical functions. Apart from these
the organization also offering following technologies to make it more competitive:
 Transitions to next-generation technologies: The organization is considered as a market
leader in transitioning the next-generation process technology and producing a latest
product by utilizing such technology. The products of the organization are mainly
utilizing 14 nm process technology in its existing market, and it focuses more only on the
development of next-generation 10nm process technology for its products (Annual
Report, 2015).
 Alignment of its network of assembly and manufacturing with different test facilities.
The organization spent a significant amount on conducting research and development
activities, which facilitate the organization to have more control over its manufacturing
processes, design, development and quality control of products
(http://www.intel.com/Assets/PDF/general/Intel_IT_2011APR_English_standard.pdf).
5

Competitive Analysis
Competitive analysis is considered as a process of recognizing the potential competitors and their
strengths and weaknesses. It helps the organizations to develop product or services which are
unique from their potential competitors. Competitive analysis of Intel is done in the following
manner.
 The close competitor of the organization in revenue and operating segments are IBM and
NVidia. IBM is considered as the largest manufacturer of personal computer processors
or advanced micro devices (Fleisher, 2015). On the other hand, NVidia is considered as
the largest manufacturer of the system-on-a-chip unit or graphic processor.
 In the manufacturing of DEG microprocessor, Microchip Technology is considered the
closest competitor of the Intel Corporation. MCHP is especially dealing in manufacturing
microcontrollers, and analogue and memory semiconductors (Fleisher, 2015).
 In the manufacturing of motherboard, DEG chipset, Advanced Micro Devices is
considered the potential competitor of Intel Corporation
(http://www.intel.com/Assets/PDF/general/Intel_IT_2011APR_English_standard.pdf). It
is the organization which competes with the Intel in several important markets.
 EMC Corporation is also considering a strong rival of Intel in producing data centre
products. It is an information infrastructure organization which was acquired by Avago
Technologies during 2014 (http://www.investopedia.com/ask/answers/120114/who-are-
intels-intc-main-competitors.asp). It is mainly dealing in production of MIPS processor,
NetApp, semiconductor and PMC-Sierra.
6

Distribution
The company uses intensive distribution and tries to cover as much market as possible for it to
gain. The distribution channel of the company updates on the regular basis for correcting any
mishappening taking place
(http://www.intangiblebusiness.com/news/marketing/2005/11/ingredient-branding-case-study-
intel). The company also pays full dedication and attention to the critical points especially in the
context of effectual packaging and purchasing points. The organization has been benefitted due
to its distributing channels being intense enough to penetrate the market at one time.
SWOT Analysis
Strengths Weaknesses
 Intel is a well-known brand name and
has strong brand loyalty in existing
market.
 Pioneer and dominant suppliers of
microprocessors for personal
computers.
 World’s largest chip and
semiconductor manufacturer, based
on revenue (Fan, 2008).
 Superior chip design which enables
the organization to deal with growing
edge mechanised capability.
 Utilization of Decisive strategies to
defend its market position.
 Poor decisive strategy lost its leading
market position.
 Faces a high financial loss during
2008 which bring a decline in its
revenue level (Annual Report, 2015).
 Failed to get the economies of scale in
its existing market.
 The absence of business in ultra-
mobile processors market.
Poor relationship with supplier due to
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 Large market shares of the
microprocessor.
 Broad portfolio of high-quality
technical products.
 Utilization of advanced technology
during a production of products such
as composite and utility transmission
line.
 Core competency in developing
differentiated products such as
microprocessors.
 Global Presence in countries like US,
UK, and Germany.
 Expansion of portfolio to include
products with higher stiffness, and
impact, improved wear and enhanced
the appearance or low emissions
(Annual Report, 2015)
inability of a supplier to meet delivery orders
on timely basis (http://seostar.96.lt/wp-
content/uploads/2016/03/Intel_portfolio-
version.pdf)
 High capacity constraints due to
labour disruption or production delays
Opportunities Threats
 Changes in preferences of customers  High-level completion between
8

bring opportunities to the organization
to meet their demands with the
changing products.
 Growing demand for personal
computers as well as innovative
products such as laptops, and tablets.
 Continuous development of
technology provide opportunities to
offer new and innovative products.
competitors of the industry.
 Increasing volatility in prices and
availability of raw materials has a
significant negative impact on the
financial margins.
 Fluctuations in environmental
regulations concerning climate change
influence the profitability level
 Presence of various unanticipated
operational or commercialization
difficulties such as the development of
competing technologies
Objectives
Sales Volume
The Company has been facing low sales in the Personal Computers and expects that the growth
in chip sales for data centres would be helpful in making up for the loss being incurred in the
PCs. With the release of new chips that are specially designed for the enterprise and on the basis
of Broadwell micro-architecture, the company believes that the sales are going to be picked up
for the chips (Annual Report, 2015). The organization is, however, gaining momentum in the
second half and remain highly cautious in the PC market. Therefore it is expecting high forecast
built on the programmable solutions, internet of things and strength in data centers.
9

Market Share
Intel has enjoyed the biggest market share in overall worldwide mobile PC microprocessor with
84.4% and PC microprocessor market which is over 79.3 percent. Historically, the company was
considered to be one of the top ten sellers of semiconductors in the world, in the 1980s and
pioneered the chip market on the basis of revenues and achieved the highest ever position in
1991. The major competitors in the market of PC Chip include VIA Technologies, Advanced
Micro Devices, Nvidia and Silicon Integrated Systems. In the field of networking, the
competitors include Infineon, NXP Semiconductors, Marvell Technology Group, Broadcom
Limited and Applied. In the fourth quarter of 2015, the Intel's x86 processor market share
was 87.7 percent and was 86.3 percent in 2014
(http://files.shareholder.com/downloads/INTC/1830462424x0x883908/C237A7E5-BD77-4792-
BCFD-8019EFEBAAB9/Final_2016_Proxy_Statement_web.pdf).
Profit
Intel has seen to made a high progress especially in its restructuring of initiatives which
benefitted in focusing on the internet of things and cloud services. However the company and its
key businesses were seen to failed in delivering considerable enough growth for boosting the
promotion of chip sales. A revenue of $13.5 was collected for the Quarter 2 2016 representing
the growth in revenues by three percent (http://innovisio.blogspot.in/2012/11/using-innovation-
to-create-competitive.html). But in the latest quarter, the profits were seen to be down by more
than half limiting it to $1.3 billion (almost 51 percent loss) and resulted in high restructuring
costs of $1.4 billion.
10

(http://betanews.com/2016/07/22/intel-q2-2016/)
Marketing Mix
Place, product, promotion, and price are considered the important 4 P’s in marketing. All these
four products together formulate marketing mix. Marketing mix divides a business into different
business pieces that can be rearranged and tweaked dependent on the requirements of the
customer (Liu, 2016). Marketing mix of Intel Organization are following:
 Product: During its initial stage the organization was dealing with shift-register memory
integrated circuits and random-access memory. After getting experienced in its
operations, it becomes the leader OF DRAM, SRAM, and ROM in its existing market.
After this achievement, the organization produced its first microprocessor. During 1971,
the organization launched Intel 4004 in its existing market. During 1983, the organization
only focus on production of microprocessors, but they were not able to earn high revenue
(Mintz, 2013). During 1989, the organization launched 486 microprocessors and various
others. It spends a huge amount of its income on designing microprocessors and become
a growing and dominant provider of microprocessors for different personal computers.
 Place: Intel Corporation has its base in Santa Clara but mainly it operates in a different
range of countries. The largest concentration of the organization workforce is in
Washington country with 18,000 employees in different branches. The organization deals
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in different 63 countries such as Russia, India, Malaysia, China, Costa Rica, Argentina
and Ireland. Intel is considered as the biggest private employer in Oregon and New
Mexico (Grant, 2016). Mexico is considered as the largest industrial employer country.
The organization has different development centres and production plants in different
countries such as China and Israel. It also has a big distribution channel that is managed
on the regular basis so as to measure any mishaps. It especially concentrates more on
effectual packaging and purchase points. The massive distribution network of the
organization helps it in penetrating large markets.
 Price: The pricing policy of the organization depends on different factors. The
organization has achieved an efficient position in the market, and its pricing strategies
played an attractive role in its achievement. It permits its competitors to determine a base
price of their products and formulate pricing strategies on the basis of these rates. The
cost of Intel products is lower than its competitors (Fan, 2015). This is because the
organization utilize mass production concept, due to which the organization earn high
revenue in case of lowering the price of its products.
 Promotion: Branding of the technical product is considered very difficult for an
organization. The main reason behind the popularity of the organization is that it teaches
different business houses how to market a product in the market that they cannot perform
efficiently. The main problem in front of the management of the organization is that the
produced product is within the CPU, and the customers cannot directly observe the
efficiency of the brand, so it could not be marketed by following traditional methods of
marketing (Huang, 2014). It efficiently introduced its products by providing them with
the name of qualities of performance and speed. With the help of these names, the
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organization has leveraged its brands into a high brand equity. It adopted the policy of
mass marketing for promoting its products. During 1991, the organization decided to
utilize a marketing and branding campaign known as Intel Inside; then the organization
earn a huge popularity in its existing market.
Recommendations
The organization is considered as a market leader in transitioning the next-generation process
technology and producing a latest product by utilizing such technology. The products of the
organization are mainly utilizing 14 nm process technology in its existing market, and it focuses
more only on the development of next-generation 10nm process technology for its products
(Annual Report, 2015). All these advancements in products facilitate the organization in different
areas such as energy efficiency, cost, and performance features. It is the responsibility of the
organization to utilize the product in an efficient manner. High-level collaboration with its
customers and third parties facilitate the organization in operating significantly on multiple
operating systems and end-user platforms and products
(http://innovisio.blogspot.in/2012/11/using-innovation-to-create-competitive.html).
Conclusion
After studying all this, it can be said that innovativeness and high quality of existing products
enable the organization to capture the large size of existing market. With the help of SWOT
analysis, the organization can utilize its strengths in an efficient manner to capture the available
market opportunities (Liu, 2016). Large focus on the quality of products also facilitates the
organization in providing high-level customer satisfaction to its target customers. The
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organization should also focus more on an expansion of its business activity which can be
efficiently done by enhancing its product portfolio.
14

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application of new and classic methods. FT Press.
Fan, S., Lau, R.Y. and Zhao, J.L., 2015. Demystifying big data analytics for business intelligence
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Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley &
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Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand
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things-spaces/
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BCFD-8019EFEBAAB9/Final_2016_Proxy_Statement_web.pdf
Intel's Q2 2016 by the numbers: $13.5 billion in revenue, $1.3 billion profit. 2016. BetaNews.
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Who are Intel's (INTC) main competitors?. Investopedia. Retrieved from
http://www.investopedia.com/ask/answers/120114/who-are-intels-intc-main-competitors.asp
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intel
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