Strategy Statement for Intel - Essay Example

Strategy ment for Intel Introduction Intel Corporation is an American multinational company specializing in the manufacture of semiconductor chips. Presently, Intel is that largest semiconductor chip maker in the world on the basis of revenue. Most personal computers today use the x86 series microprocessor which was invented by Intel. Founded on 18th July 1968 as Integrated Electronics, the company has grown over the years to become a leader in the semiconductor industry and one of the largest corporations across the world. Intel presently manufactures a range of products including motherboard chipsets, integrated circuits, network interface controllers, embedded processors, graphic chips and a range of other communication devices. The management strategy of the organization is closely linked to its founders Robert Noyce and Gordon Moore and the leadership of Andrew Grove. Initially, the company was only known to people in the technology industry. However over the years, intensive advertising campaigns have made Intel a household name across the world mostly arising from its Pentium processor. Intel presently operates as a public company, a status it achieved in 1971 after launching an Initial Public Offering (IPO) (Gawer and Cusumano 44). Development At its formation, Intel was primarily concerned with the production of SRAM and DRAM memory chips which accounted for almost all the sales of the company until 1981. Even though the company invented the microprocessor chip early in 1971, the importance and popularity of this device had not been realized since the personal computer industry had not yet grown sufficiently. The success of the PC triggered a period of much organizational success for Intel as a result of the increased demand for the microprocessors. At this time, Intel grew rapidly as the dominant microprocessor supplier in the computer industry. However, this growth had its own share of challenges. At this time, several major organizations such as Microsoft were coming up in this industry, and this created a lot of struggle for control of the direction of the industry (Elliott 15). In the 1980s and 90s, Intel experienced periods of unprecedented growth given that it had become the primary supplier of microprocessors to IBM and other major computer manufacturers across the world. The Pentium brand became a household name, and this created a lot of brand loyalty for the organization. However, in the 2000s, the growth of the company began to slow down. At this time, there was a reduced demand for high-end microprocessors. Intel’s competitors like AMD gained a lot of market share. In order to address the company’s reduced sales, the then- CEO Craig Barrett began a process of diversifying the product line of the company by engaging in the production of other technology devices. However, it proved difficult for the company to venture into such new fields since other players had already established strong grounds (Metz). Success factors On the basis of most success factors, Intel has indeed been successful. The company is presently ranked at position 49 among the fortune 500 companies and this indicates a good revenue position. In a world driven by innovation, the company has carried forward the spirit of the founders and continues to take the lead in innovation across the industry. The innovation was a result of the proper management structures that have existed in the organization since its formation. In this respect, Moore and Noyce placed much priority on the people as an important asset for the organization. Openness, responsibility and equality have become a driving factors and this greatly motivates the employees. Innovation at Intel is not therefore the prerogative of the R&D department as in other organizations. Rather, every employee has the capacity to ensure an improvement in their area operations. This has seen the company expand its product line from microprocessor to other products like network cards, memory drives and motherboard chipsets. Innovation is certainly indispensable in the electronics and computing industry where technology seems to change by the day. While competition has always been a challenge for Intel over the years, it is one basis through which the organization has managed to achieve its status across the world. The great competition realized in this industry has created the need for proper management strategies and no room for any errors. Opportunities have to be seized as soon as they appear while the whole approach of the management is always proactive as opposed to reactive. The present huge market share controlled by Intel indicates much success for the organization. Today, 75 percent of all personal computers come with an Intel chip inside. By focusing on the niche market, Intel has managed to build its reputation and to stand high above the competition. The company’s market capitalization as at 2012 was $140.84 billion with a rising stock price on the NASDAQ. Intel has practiced a number of strategic initiatives which have propelled it to the current position. One core strategic objective is excellence in new product development. Indeed, innovation at Intel occurs in a consistent, structured and development way which greatly enhances efficiency and excellence of the final products. This has been anchored on the cultural change which continues to take effect in the organization. At Intel, the feedback of the customers is an important consideration in product development (Hardy). When Dell complained that Intel was not effective in its supply process, there was a strategic meeting at Intel which resulted into a very efficient mechanism for addressing the challenge. With a drop in the demand for PC across the world as a result of the popularity in Tablets and smartphones, Intel is keenly adapting to these changes. This was realized by the introduction of the X86 phone design by the company. These strategies have propelled the organization to its present position where it dominates the industry through innovation and new product development (Chesbrough 45). Challenges Like all companies operating in the technology industry, Intel faces myriad challenges despite is dormant position in the market. Most of the challenges are faced in the process of seeking to achieve long term objectives. One growing challenges is the growing mobile industry which continues to present a number of strategic requirements. In order to gain a stronger position in this growing industry, Intel has to invest heavily and institute a number of strategies to approach the market. This has been problem since for a long time, Intel focused on the PC industry which is slowly giving way to the mobile world. Considering that companies like ARM have already established a strong presence in the mobile market, it presents a complex situation for Intel which aspires to retain its current dominant position. Many mobile manufacturers still prefer ARM Holdings processor IP and Intel must therefore strive to share in this market (Chesbrough 52). The Chairman of Intel Andy Bryant has recently been focusing on informing the employees that the operation of the company must now change. The chairman recognized the fact that PC sales continue to dwindle across the world as more people now rely on tablet and mobile phones which do not contain the Intel Microprocessor chips. In the same way, cloud computing technology is becoming very popular but totally unprofitable for companies due to the cheaper and simpler designs. In this case, Intel must place greater emphasis on mobile technology in order to establish an early presence in the growing market (Daily Report). In light of these challenges, it nevertheless realized that Intel still has the right culture and spirit to remain a dominant organization in the industry. Innovation and new product development is therefore the most important strategy which must be enhanced across the organization. More importantly, the company should focus on a variety of product lines in order to insure itself against dynamic technology industry. In such a case, it will still remain a force in the market. Works Cited Chesbrough, Henry. Open innovation: researching a new paradigm. Oxford: Oxford University Press, 2008. Print. Chesbrough, Henry William. Open innovation: the new imperative for creating and profiting from technology. Boston, Mass.: Harvard Business School Press, 2011. Print. "Daily Report: Tech Giants Scramble to Meet the Challenges of a Mobile World - NYTimes.com." Technology - Bits Blog - NYTimes.com. N.p., n.d. Web. 23 Apr. 2013. . Elliott, Heidi. "Building a big rep with reps: Intel touts success of "extended sales force". (Sales Strategies).." Electronic Business 15 Apr. 2012: pp. 5. Print. Gawer, Annabelle, and Michael A. Cusumano. Platform leadership: how Intel, Microsoft, and Cisco drive industry innovation. Boston, Mass.: Harvard Business School Press, 2012. Print. Hardy, Quentin. "Intel Tries to Find a Foothold Beyond PCs - NYTimes.com." The New York Times - Breaking News, World News & Multimedia. N.p., n.d. Web. 23 Apr. 2013. . Metz, Cade. "Intel and ARM Begin Server War on Equal Footing | Wired Enterprise | Wired.com." wired.com . N.p., n.d. Web. 23 Apr. 2013. . Read More