Latin American Factory Start-Up Harvard Case Solution & Analysis

Synopsis of the Situation

 

Intel has always been keen to expand its market at global level, the decision regarding the business expansion in Costa Rica in 1996 had several challenges and issues. In 1996, Intel made an announcement to enter Costa Rica with an aim to develop US$ 300 million assembly and test plant in the Costa Rica. The decision had attracted several foreign investors to invest in the Costa Rica due to the brand image of Intel. The aim of the corporation is to become the leading brand worldwide in the industry. The company focusses on four areas regarding the product. The firm concentrates on the design and manufacturing of microprocessors of computers.

The corporation also developsmicroprocessors for consumer desktop such as laptops (PCs) as well as servers. Secondly, the firm’s other category of products facilitates the communication and networks for the purpose of integration of computers. Intel’s third category of products is based on wireless products. The last product category of Intelfocuses on business development. Based on the company’s vision, it aims to develop new products realizing the fact of increasing the Internet usage worldwide. Because Intel is entering into the new market, theyhave realized the need of educating the employees in adaptation of new culture.

Key Issues and Problem Definition

The company’s decision to invest into new region had some serious concerns. One of the major questions was that how the corporation should efficiently launch an assembly and test factory in Costa Rica. The Costa Rican young employees who newly joined Intel do not have the experience in the semiconductor manufacturing. This was a concern for the Intel to accomplish its mission. The production demand and requirementof the first quarter increaseddramatically from 150,000 to one million units that was also a big issue faced by the company. These factors could be harmful for the corporation as far as the future prospect of the site was concerned. The other factors that Intel needed to consider was the performance of the Philippines and Malaysia. The assembly and test factories in the Philippines and Malaysia had successfully participated in the industry over the decade.Another problem that Intel faced, was based on the culture, Costa Rica employees had several disparities as compared to the company’s culture.

Cultural differences made the Intel much more reluctant to operate in Costa Rica. The first problem that associated with the culture was the discipline. The employees usually were not punctualand used to come late in the critical meetings. That behavior of the employees needed to be positive to ensure the smooth factory operations.The mindset of the Costa Rican peoplewas entirely based on orientation, which sometimes deviated from the actual results.Another important factor was personal relationships that were important to get success in the Costa Rica. Costa Rican employees had a different frame of mind associated with creating relationships. All these factors were critical to the success of the Intel in Costa Rica but they need to be resolved for the sake of the organization. The corporation had very limited time toovercome these problems for ensuring effective factory operations.

Alternative Solutions

Training and Development

One of the possible solution for the Intel to perform its operations in the Costa Rica is to adopt training and development practices to educate the new hires. Because the employees are lacking technical expertise related to the site operations of the factory, it is better to train them for the sake of the Intel’s corporation. Training and development of the employees facilitate the Intel in the long term. When the employees become trained, they perform their task in an efficient manner as per the company’s vision. Educated employees are always an asset for the organization because they are the main source of promoting other employees for the sake of improvement in the performance. It is beneficial for the Intel Corporation to train and educate the employees and adopt career development practices as well.

If Intel practices training programs within the organization, it can bring about an opportunity to increase the knowledge base of the employees;this step may prove costly as well, by significant factors in the long term (Patrick, 2000).Training of the employees is always a crucial factor it allows the company to improve the capabilities and skills of the employees who needs an improvement. Development practices significantly increase the skills and knowledge of the employees to approach to the higher levels, so it will provide Intel several benefits in this regard. Identification of weak areas among the employees is always a useful factor to consider, if Intel adoptsit, they will be benefited in the future including Costa Rican region. Intel should provide training to the deserving employees to ensure the best standards in the manufacturing of site operations (William, 2004).

Cost Leadership

It is a concept introduced by Michael Porter, it defines a method to gain a.....................

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Latin America
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by Caren Siehl Source: Thunderbird School of Global Management 5 pages. Publication Date: June 9, 2004. Prod. #: TB0125-PDF-ENG

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