Strategic Systems Management of INTEL Corporation - Case Study Example

INTEL Corporation By Yours INTEL Corporation Introduction: Technology implementation is a new phenomenon for business companies. Technology adoption has risks and posses the failure that makes the companies’ survival at stake. Sometimes software packages installed become incompatible with other software packages and products’ delivery is delayed. Many new technology products have been developed. Manufacturing and designing companies have adopted the new emerging trends of Technology for customers’ ease and their own benefits. Technology impacts on Intel (Past, current and future) First Microprocessor was introduced by Intel in mid 1960s that sparked the revolution in technology spread. Intel has become the unequivocal company for a successful story. Global strategy of new technology driving served the international market and increased the preference of customers’ for new brands of Intel. Intel stockholders were also served well over many years. Pentium processors’ sale was driven by 1996 and a high record sale was not observed in year 1997. Intel has developed the rapid, smarter and faster computing solutions by integration of revolutions in technology for their customers in 1913. Core processor was the main highlight released for 4th generation. This innovative technology product enabled the convertible devices, which acted as a personal computer as well as a tablet (Khan, 2013). Intel Co. believes that Wi-Fi radios, which are large and traditional devices and operate externally to Chip are expected to be incorporated in coming years. Huawei Technologies with the alliance of Intel in China has made Intel’s products more palatable for indigenous buyers. This alliance was made to push more Intel’s products in China’s market. On other hands, Chinese government is pushing the use of local manufactured devices rather than buying foreign manufactured technology products (Carsten, 2015). Big data adoption has helped the Intel Company to improve the business decisions and enter into new markets. Intel aims to extend the business strength ranging from descriptive analytics to the predictive analytics by utilizing the big data (Alam et al., 2014). Recently, Intel Corp. has joined the Cloudera Inc. in the area of business software in a deal that makes the Intel as a largest investor. Clark & Gage (2014) in the Wall Street Journal told that Intel’s stake came after financing of $160 million from Cloudera in February 2014. Big data analysis tool Handoop through a joint interest of Cloudera and Intel Corporation has solved the issue of big data analysis. More customers get benefit from Handoop deployment. Intel implemented the first cloud solution for its internal application owners and developers in late 2010. This solution was specific for Intel IT end users in the context of storage and exposure of IaaS computing. In 2011, Intel augmented the cloud with an approach of open source that allowed the developers to use the latest technology (Cox et al., 2012). Open Cloud is a good foundation for Intel Technology but requires still optimization of cloud computing. Intel Corp. has taken step to build up its business in healthcare industry by adopting technology to assist the patients of homebound having chronic and medical issues like diabetes, heart diseases and hypertension. Intel’s software and hardware incorporated services are focused to help the elder people by monitoring their heath conditions at their homes. These services are connected together through medical devices like blood pressure, scales and glucose readers and record the information, which are shared by health professionals (Omachonu & Einspruch, 2010). Intel realized that capital benefits it could draw from technology adoption were impossible for other companies. To generate the innovative ideas remained rare for competitors. All benefits drawn from technology adoption are regarded as valuable. Intel also believes that a learner in every part of world deserves to acquire the skills, which are essential to thrive in world of digital technology. Education technology of Intel is providing the access programs and solution to transform the learning and teaching to enable the effective advocacy to make their goal as a reality. Globally, Intel works in an alliance with the government leaders, educationists and industry people to document, develop and deploy the fast and advanced technology solutions. Technology impacts have been focused to improve the learning and teaching through ICT adoption in academic institutes. Philanthropic programs of Intel are the initiative where learning solutions use the latest technologies. Intel brings the combined capabilities of transformation learning environments. Internet access, healthy dose of new technology and teachers’ professional development is seen in the learning environment. Innovative technology platforms support and inform the ICT solutions from experts’ commitment towards the educational issues (Druin, 2009). Emerging market centers of Intel were established in main four markets of world including the Cairo Egypt, Shanghai in China, Bangalore India and Paulo in Brazil. A comprehensive platform approach has been used to integrate software and hardware for interoperability. Apart from technology advantages for company’s stockholders, technology at Intel improved the lives of those people who were living in poor or developing countries of world. Cohen (2012) told that ongoing progress in cloud transition has fueled the massive built up of project that is worth of $ 82.9 billion by 2016. This development will help the business, developers and infrastructure to offer the gaming and mobile services to consumers. Cloud computing system at Intel has an opportunity to create the ecosystem of federated clouds. In future, competing companies and cloud computing services providers will focus on the interoperability through the agreed upon standard and applications. Global Web Scale is the future attribute of Intel technology adoption where distributed applications, nodes, services and virtualized computers will come together and form a global environment. Ethical, Social, legal and Professional Issues Ethical Issues: Although technology and ethics are not directly interacted but a relation exists between them. Globally working companies have improved standards over the nation-wide working companies. Sometimes, companies make the selective or a complete commitment to the best services. Intel’s Silicon chip uses the higher of Arizona and other waste management standards to the operations of Costa Rica. Workers’ rights, wages and labor conditions are issues covered in the initial set, while resource and environmental degradation are issues for second set. Third set of issue includes the human rights in reference of social, political and cultural sense. These ethical concerns’ sets have emerged as a core and global principles in business management. Code of Ethics from Intel is their “Code of Conduct” that applies to all workers including the directors, all officers and those who are not workers of company but relate with their activities. All employees at Intel are trained according to Code of Conduct. Code of Conduct is available in varying 15 popular languages. Ethical training in Intel to their employees is provided on important grounds including the anti-corruption, antitrust, insider trading and export-import compliances. Electronic storage of personal information and data exchange and misuse of potential healthcare information are key concerns for Intel global services in healthcare information exchange (Malvey & Slovensky, 2014). Intel is responsible to regard the customers rather than keeping in cost versus benefits. Intel must reply if Pentium has problems because customers expect actions from company. Social and Cultural Issues: All moral and social aspects arising from technology spread need their investigation prior the clients know well all about the issues. People in Intel as a technology adopting must be honest. Intel faced the competition from Japanese companies in terms of marketing, fabrication and design devices. Intel Company has explicit considerations of impacts related to technology adoption and stakeholders’ activities affected by the management’s business decisions. It was found that Intel included all those people who were influenced directly or indirectly by company’s operations. Stakeholders of Intel Company include the employees, shareholders, customers, suppliers and society as a whole. Social problems of stakeholders are focused under the strategic management policy. Employees’ health and education, and use of toxic material which can pollute the environment by installing the new technology equipments are serious concerns. On company’s side the responsibility is to increase the wealth of company’s stockholders. However, spending and expenses on social causes do not contribute towards the profit of company. If Intel Company donates the charities to improve the social values of communities then they take away money of stockholders. On other hands, companies support the business role to serve the social needs. Intel as a multinational company reduces the risks and builds stronger and long terms social connections with people. Intel filters the customers’ information through business planning, marketing and sales and makes decisions on forecasting. In Intel, co-workers are encouraged to initiate the face to face relation with other co-workers and reduce the email loads. It results into improvement of quality for internal communication. New technology adoption of Intel aims to connect and enrich the lives of people living on earth. Technological products and programs of social impacts have positive changes. Expending opportunities for women and girls’ education have shown real Intel’s commitment towards the value creation for company’s stakeholders, society and Intel itself (Intel Corporation, 2013). Legal Issues Legal issues are related with the data protection when it exported or imported from other countries. Cloud computing technology adoption is influenced when these legal concerns of customers and employees are not addressed. It pointed out that data security is obligation of service provider, outsourcer and data owner, while laws mandate the service provider or outsourcer to ensure the accurate configuration of equipments on cloud computing. Intel Company faces the legal claims from its customers, employees and stockholders on global bases. Form 10-K reveals that company is engaged in a number of regulatory as well as litigation matters. Intel company is subject to varying administrative as well as legal proceedings such potential claims, replacement or repairing of parts. Such contingencies are measured as a charge to income if a liability incurred and loss of amount is estimated. All agreements are legally binding and enforceable on the company specified terms, and quantity purchases. Intel management considers that outcomes of the legal proceedings in aggregate and individually do not harm the financial positions of company, cash flows, and overall trends. Monetary damages are the unfavorable conditions. However, settlement of financial matters is always in best interest of company’s employees, stockholders and customers. Johnson (2015) stated that new technologies need extensions or modifications in the existing law mechanisms, and artificial agents were not best if existing laws were extended to address the responsibility and legal concerns. Therefore, engineers and developers who manufacture and develop program for running are liable for the design and development. Professional Issues Availability of well educated and skilled workers is beneficial for the company. Computing across the varying industries requires resources like power, space, money for infrastructure, and qualified IT professionals. Professional concerns about technology adoption are to integrate the human values and computer technology in a way that technology protects the precious company’s assets as it advances. Professionals at Intel have their responsibilities that arise from impacts of technology adoption. IT professionals have to follow the code of conduct as well as code of practice (Shakib & Layton, 2014). Conclusions: In this paper, focus has been made to present the impacts of technology adoption by the Intel Company. Technology impacts have been seen in the perspective of past, present and future on IT, healthcare and academic industries. Role of technology has been acceptable in all field but some of field have been highly impacted by new advancement in technology. Information sharing through software and hardware integration is advantageous for patients’ health monitoring at their homes. Technology adoption and changes brought various ethical, social and cultural, legal and professional concerns at Intel. Ethical concerns involve the protection of all people involved in the business and environmental concerns. People at Intel follow the Code of Conduct while they perform actions. Technology impacts on social values of all stakeholders of Intel are strongly considered. Intel Company expenses on raising the social values of all employees, stockholders and customers. Company in its technology and business operations is legally obliged to laws and claims from its clients. Liability of engineers and developers of Intel is what they manufacture and develop for technology advancement. In the end, professional concerns at Intel are stated. References Alam, J. R., Sajid, A., Talib, R. & Niaz, M. 2014. A Review on the Role of Big Data in Business. International Journal of Computer Science and Mobile Computing, 3, 446- 453. Carsten, P. 2015. Huawei, Intel expand tie-up amid Chinas rising scrutiny of U.S. tech firms [Online]. Available: http://uk.reuters.com/article/2015/03/05/uk-intel-huawei- tech-idUKKBN0M10DW20150305 [Accessed 17-04-2015. Clark, D. & Gage, D. 2014. Intel Invests in Former Big Data Competitor. The Wall Street Journal. Cohen, R. 2012. The Pas, The Present and The Future of Cloud Computing. Intel Technology Journal, 16, 20-25. Cox, B., Duan, J., Feng, F., Kamhout, D., Li, S. & Liu, T. 2012. OpenStack and Intel Technology Best Practice. Intel® Technology Journal, 16, 78-91. Druin, A. 2009. Mobile Technology for Children: Designing for Interaction and Learning, Burlington Elsevier Inc. Hill, C. & Jones, G. 2013. Strategic Management Theory: An Integrated Approach, Mason, CENGAGE Learning. Intel Corporation (2013). 2013 Annual report, Available from http://intc.client.shareholder.com/intel-annual-report/2013/Intel_ARand10K_13.pdf Accessed on 17-04-2015. Johnson, D. G. 2015. Technology with No Human Responsibility? Springer, 127, 707- Khan, M. 2013. Technology predictions for 2014: Higher tech adoption rate to bring more investment [Online]. Available: http://www.dailytimes.com.pk/business/30-Dec- 2013/technology-predictions-for-2014-higher-tech-adoption-rate-to-bring-more- investment [Accessed 15-04-2015. Ma, T. 2014. Professional Marketing and Advertising Essays and Assignments, UK, Tony Ma. Marketline 2014. Company Profile Intel Corporation. California. Malvey, D. M. & Slovensky, D. J. 2014. MHealth: Transforming Healthcare, Florida, Springer. Omachonu, V. K. & Einspruch, N. G. 2010. Innovation in Healthcare Delivery Systems: A Conceptual Framework. The Innovation Journal: The Public Sector Innovation Journal, Volume, 15, 1-20. Riaz, A. 2014. A SWOT Analysis of Intel [Online]. Available: http://seekingalpha.com/article/2235253-a-swot-analysis-of-intel [Accessed 19-04- 2015]. Appendices A. Income, costs and profit and other measures of performance ? How does the company derive its income? In first quarter of 2015, earning of Intel has been reported as mixed. Company’s profit rose to 3% while company’s revenues remained the flat. Intel sells the digital technology products in foreign countries. Intel sells the platforms to manufacturers, designers in communication and computing industries. According to Fortune report the key financial findings of Intel company were as $52708 Millions with profit $9620 in year 2014. Total assets of Intel were accounted as $m92358 Million and Total Shareholder Equity as $58256 Million. Market value was reported as $128347 on March 31, 2014. Before this lower income of Intel Company was seen in year 2013 when revenue declined to $52.7 billion. In data center and PC clients’ groups’ unit sales was decreased. In 2013, net income of company dropped to 12% and $9.6 billion in year 2013. Intel spent more than 5% on research and development (Intel Corporation, 2013). ? Where are its main costs incurred? Main cost incurred from Intel includes the products’ manufacturing and also valuation of the inventory start. Intel follows a criteria prior of products’ sales, cost which cannot meet the research and development also include in cost of sales incurred during the period. ? As a potential investor how do you measure the performance of the company relative to other companies in the sector? Semiconductor industry is not a non-cyclical because boom and bust changes very rapidly in the market. This cyclical trend creates risks for investors. An investor can judge the Intel’s debt to equity ratio. If this ratio is high that means Intel Company has used a large amount of debt for funding of its growth. Profitability ratios are other measures, used for evaluation of company’s performance. Return on assets of Intel remains higher than AMD, AVGO, BRCM but lower than TXN. Appendices B: Value Chain for your chosen company (1 page) Intel has become the leader of market in manufacturing and designing of the microprocessor. Intel has unbeatable advantage over the other competitors. Company focuses upon the easier business with people. E-business strategy is being used since 1988 at Intel to keep the interaction with customers, suppliers and employees. Intel achieved a remarkable success for e-business and reaps the tangible advantages from business volume it does on the Web. It saves time for customers as well as for itself. Before implementing the e-business strategy, Intel used the traditional ways of telephone, paper and pen to keep the track of suppliers and supplies. Customers’ demands were not soon met. Therefore, e-business filled this gap and reduced the order and manufacturing lead times. Ma (2014) reports that Intel has its web based system to exchange the information very quickly pertaining to design specification, customers’ orders and proprietary information. Intel has direct deals with customers and takes a week or hardly two weeks for delivery of products to customers. Appendices C: Value System for your chosen company Value system of Intel has main features including the customer orientation, discipline, quality, risk taking, a good place to work and result oriented. People at Intel always make efforts to listen and respond their stakeholders, suppliers and customers. Intel always provides competitive and innovative products and services to its customers. Uncompromised integrity is ensured during the business conduct. Workers of company are given a safe and workable environment. High standards of the excellence is tried to be achieved by doing right things at the right time. Intel provides a challenging environment to its workers with creation of trust among employees. It also rewards the employees through their fair and firmly performance. It encourages the team to pursue the challenges continuously in order to attain the excellence at a high level. At Intel, it is strived to attain the results at all levels of business. Intel does not only support other companies in achieving the business goals but also help the customers. All interaction with customers, suppliers and workers is electronically based (Ma, 2014). Appendices D: Porters’ Five Forces Framework for your chosen company Rivalry There is a tough rivalry between companies in market. If more companies have a competition among each other then profit and prices of products are driven. Company has no power over the relevant industry if a tough competition between companies exists there. Competition rivalry becomes high when small companies similar to Intel’s business operate in the market. Companies operating in a market have similar strategies. If growth in market is slow then rivalry also increases. Intel has strong competitors like IBM, Motorola, Hitachi, Fujitsu and AMD in market. Threats from New Entrants Intel Company does not have only threats from rivals but also from new entrants in market. New companies enter the market if it is attractive for a long period strategically. However, barriers pertaining to new entrants are very high due to proprietary knowledge and patents. New companies have difficulties in stemming from infrastructure or specialized technology. Obstacles from government and economies of scale also offer barrier to new entrants. Threats of the Substitutes From Porter’s defined framework, substitute’s products are found in other companies used for meeting the same demands of customers. Matching up of Sun/Linux machine with the Intel/Windows is a best example of the substitutes. Intel is worried about the substitute products of AMD in the market. Suppliers: It is assumed that Intel’s supplier may have the same power shortage to sell other traders in IT industry. Most required component of Intel is purchased from a number of manufacturers and affords to have a good buying power. Buyers In most areas, customers purchase customized machines in the market. Hewlett-Packard and Dell as big computer manufacturers determine the microprocessor and chipset leverage immensely. Most of manufacturers consider the Intel logo with respects. (Hill and Jones, 2013) Appendices E: A PESTEL evaluation for your chosen company Appendices F: Situation Analysis of Strategic Options for your chosen company Strengths Biggest strength for Intel Company is its commitment for R&D. Research and development required the high level of investment. Products’ development according to customers’ perception requires a high amount to be invested. In 2013, Intel was the major and biggest spender on the R&D as compared to Samsung and Qualcomm. Intel’s spending on R&D was accounted as $10.6 billion. Intel has advantageous in having manufacturing facilities at their own places that shorten to market the products. There is a large and loyal base for Intel’s customers. Market accepts very rapidly new products of company i.e. smart phones and tablets. Intel Quark SoC has accelerated the pace for Intel’s entrance into a new market and competes with other major players in the market with integration of a high level and low power consumption. Weaknesses Main weakness of Intel Company is declining trend of PC market for the last few years. PC shipments are reduced since year 2014. Therefore, Intel needs to enter the adjacent markets to reduce impact of decline in the PC market. There are several factors, which determine success of Intel to enter into new markets. These factors include the marketing strategies, new products’ introduction, competition and distribution. Intel’s success in new markets is only through differentiation in cost and technology. Underutilized capacity of Intel is another weakness as company has not manufactured so many products in number as compared before year 2014. Bottom line of Intel can be improved if Intel can split the fixed cost to manufacture other products and becomes a more profitable company. Opportunities Underutilized capacity as a weakness of Intel can be converted into an opportunity for company. Other companies utilize the capacity and manufacture products in a large numbers. This underutilized capacity can be used to design and develop the mobile products to improve the bottom line. Since 2013, Intel introduced many new products into market that might increase the company’s competitiveness in business of Inter of Things (IoT). Threats Business model of Intel is itself a big threat for company. Some of the companies just sell the design of chips and other companies manufacture the chips. Server industry has been dominated by the Intel but it faces threats from other companies. Google has planned to manufacture its own RAM-based processors. Face book is also work on to produce the ARM-compliant server systems. Two tech giants named above have created worrying position of Intel in market. Due to release of Seattle by AMD has concerned the Intel. (Riaz, 2014) Appendices G: SWOT Matrix Strengths: Technology pioneering since the Intel’s inception in 1968 Metal oxide semiconductor for static RAM Introduced first microcontroller and launched ICE-80 as a first World’s in-circuit emulator Improved Research and Development that enhanced the portfolio product at the Intel Intel’s operations are integrated (manufacturing, assembly and testing environment along with the global architecture for design teams) Weaknesses Margins are declined Decline from $53999 million in year 2011 to $52708 million in year 2013 Net and operating profits declined at 14% and 16% respectively for year 2011 and 2013. Weaker PC demand resulted from a decline in the PC client group There is a product gap for the segments of mobility Investment in mobility impacted the Intel’s margins Opportunities There is a Foray for the wearable and device market Intel’s global presence can assist it to market its wearable products to worldwide customers It is poised for benefits that grow from the Internet of Things There is an opportunity for growth in market of data centers Data center groups are operated at Intel Platform offerings are designed for storage, workstation and server for computing market segments Threats There is seen a decline in PC market Smartphone and tablet market’s sale has slowed down There is an Intense competition McAfee family in security is in a tough competition from other companies Increasing competition may impact the Intel’s shares in the market. (MarketLine, 2014) Read More