Industry Analysis Case Study Solution
Bargaining Power of Suppliers
As a component of their overall business strategy, Intel has included the use of raw materials as part of their commitment to provide a comprehensive supply of materials for the production of microprocessors.
Threats of Substitute
Because it is difficult for competitors to compete with Intel and needs large investments in marketing to sway consumers away from Intel, it is likely that Intel and alternative sales might have a negative effect on the overall success of the firm. When there are fewer available options, there is a lower probability that one will be substituted for another
Strategy Assessment
Cost leadership
Increased volume has allowed Intel to offset high fixed-costs. As a result, they are capable of keeping relatively low production costs per unit while generating substantial returns on their assets and investments. Other businesses have failed to do this, leaving just Intel with its smaller rivals in a very advantageous position for price and non-price competitiveness.
Differentiation
There are many vendor in the industry. In addition, there are not many investments required for relationships specifically in semiconductor production. The products are not very distinct from one another, and Intel is not required to get its raw ingredients from a single provider. There is therefore little chance for a supplier hold-up.
By keeping a strongly vertically integrated process, Intel lessens its reliance on its suppliers. Intel is able to lessen its strategic risk of supplier power by vertical-integration and so by incorporating the competitiveness in the semiconducting market.
Market Focus
Intel keeps moving forward in the semiconductor industry. The Itanium 64-bit CPU was introduced later than predicted, but it anticipated to overtake the Pentium as the new industry standard. In order to utilize the Itanium for all of its high-end servers, they have an agreement with HP/Compaq. (Yang, 2003)
Nearly half of Intel's income comes from Asia alone, proving that the company has been successful in diversifying into international markets. The biggest corporate venture capital firm in the world, Intel Capital, was also founded by them. Here, they make investments in industries related to technology, particularly ones that could support the development of a future market for Intel's goods. Intel has been able to maximize the first-mover advantage in the semiconductor market through ongoing innovation and business strategy.
Intel’s Core Competencies
As part of Intel's strategy shift away from a concentration on personal computers and toward a focus on data, the company was attempting to broaden its edge over its competitors in end-to-end sectors. One illustration of this would be the incorporation of, as well as the acquisition of, Mobileye by the company.
Intel was looking for a solution that covered the entire process from beginning to end, with a particular emphasis on the vertical integration of its microprocessor products' applications to computer vision software for autonomous vehicles, as well as large-scale data processing and artificial intelligence machine learning.
Innovation, not sales, is where Intel's true strengths lie. They thus made the decision to discontinue selling their products directly for reselling in consumer devices. It is unclear that Intel would wish to try again to independently brand their devices for consumer sales in light of that setback.
The history of Intel has been characterized by broad acclaim from scholarly, commercial, and governmental sources. They have been successful in diversifying into other associated industries, such as embedded semiconductors and flash memory, which are employed in both commercial and industrial applications.
The microprocessor business at Intel makes the majority of its revenues (83 percent of sales), and this is their primary claim to fame. The most widely used computer chips worldwide were the Celeron processors. Nearly 80 percent of all new computers manufactured worldwide came with a processor chip made by Intel.
Intel’s Value Preposition
In order to achieve large scale integrated memory, Intel was established. It has a long history of innovation, and only three years passed before they unveiled the very first micro-processor and erasable programmable memory in history (EPROM). The company's developments in DRAM and EPROM had already started to make Intel's products the norm in their respective industries. Intel went public in the same year (1979), trading with the symbol INTC.
As Intel continued to make strides in memory technology, the following decade was characterized by innovation and leadership. In 1972, the 8008 the first 8-bit microprocessor was released, ushering in the era of the microprocessor.
The microprocessor grew more and more common under Intel's leadership. When IBM opted to utilize Intel in 1981, it was the company's biggest break.
They chose the 8088 chip from Intel for their desktop pc. Amidst intense internal and international rivalry, particularly Japanese price competition in the early 1980s, in 1985 they made the decision to concentrate all of their efforts on micro processing............
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