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Intel Corp Inc

Student Name

American Public University

BUSN620: Strategic Management

Instructor Name

Date

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Executive Summary

Intel is a 52-year-old company that operates on a global scale producing semiconductor

components for technology devices. The company has focused purely on microprocessors for the

first years of operation though through extensive success the company has had the capability of

diversifying its products and services. Intel has since then expanded and retracted from the

mobile industry and furthermore has expanded its company into the internet of things industry

and the big data industry. Many of the products produced by the company is utilized in any

device that processes data in order to function. The microprocessors produced by Intel are

considered the brain of the computer we all know well today. Intel has used their power and

positioning to support innovation and social justice. A common believe in the work environment

is to ensure that products developed by intel create a better world for tomorrow.

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Intel Corp Inc

Company Overview (INTEL)

Intel Corp, Intel for short, is a company that designs and produces computer products

such as microprocessors and other computer components. Intel is a global corporation that is

considered the world’s highest valued semiconductor chip manufacturer. Intel participates in

many different segments, such as internet of things (IoT), computing, artificial intelligence,

networking, and much more.

With an extremely successful background the company prides itself on focusing on

innovation and working as a team with consumers, shareholders, and employees in mind. The

company has a strong emphasis on making the world a better place. This is expressed through

the company’s vision and mission statements. In addition, this is practiced by the entire

executive management team of Intel.

Company History

Gordon Moore and Robert Noyce started Intel Corp Inc in 1968 after leaving Fairchild

Semiconductor Company (Bellis, 2020). After typing up a general idea of the company Robert

Noyce convinced Art Rock, a venture capitalist, to invest in the new journey. In addition, he was

able to secure $2.5 million dollars by selling convertible debentures (Bellis, 2020). The two then

decided upon using Intel as the name of the company which was short for Integrated Electronics.

Intel began producing static random-access memory (SRAM) in 1969, called the 3101

Schottky TTL bipolar 64-bit (Bellis, 2020). This memory was twice as fast as the memory being

released by the Fairfield Semiconductor Company at the time. In the same year, 1969, the

company produced the first commercial metal-oxide-semiconductor transistor called the 256

1101 SRAM (Bellis, 2020). This was the beginning of everything for Intel.

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Within a few years, the company went public at $23.50 per share with a market cap of

$8.225 million (Duggan, 2019). In 1972, Intel produced the first ever 8-bit microprocessor

calling it the 8008 (Bellis, 2020). Within just two years the company then produced the 8080

which ended up being 10 times more powerful than the previous processor produced in 1972

(Bellis, 2020). The 70’s were huge for the company landing them on the Fortune 500 list and

being named one of the top ten best triumphs of the seventies (Intel, 2020).

In 1981, Intel produced the 8088 16-bit microprocessor which became the standard for

the market competing with the Motorola 68000, eventually IBM picks up the 8088 as their

processor of choice for their personal computers being developed (Tedlow, 2006). In 1983, Intel

introduced complementary high-performance metal-oxide semiconductor (CHMOS) technology

(Intel, 2020). This benefits the power of the PC while also decreasing how much power the PC

consumed. In the same year, the company finally surpassed $1 billion in revenue for the first

time (Intel, 2020). In 1985, Intel began entering the supercomputer world. This is when they

introduced the iPSC/1 which utilized multiple microprocessors working at the same time in order

to solve problems (Intel, 2020). The processors used in the supercomputer were the Intel 286

microprocessors. In two years, 1987, Intel launched its second-generation super computers called

the iPSC/2 (Intel, 2020). These were based on the Intel 386 and Intel 80387 processors (Intel,

2020).

The 90’s started off terrible learning of the loss of Bob Noyce due to a sudden heart

attack. The company quickly turned this around by launching the NetPort print servers allowing

printers to connect to local area networks allowing them to be used by multiple computers (Intel,

2020). The company quickly becomes a household name. In 1992, Intel became the largest

semiconductor company by sales in the entire world (Duggan, 2019). Intel became the third most

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valuable brand in the world according to Financial World (Intel, 2020). Finally, by 1994 and

1995, Intel processors powered approximately 85% of all desktop computers and even used on

the Space Shuttle Endeavor for PC-based conferencing from space (Intel, 2020). By the end of

the 90’s Intel had rolled out many new processors including the Pentium 1, 2, and 3, and the Intel

StrongARM technology. Intel ended the 19th century by being added to the Dow Jones Industrial

Average (Intel, 2020).

Intel did not slow down in the beginning of the 20th century. They began with releasing

the Intel Pentium 4, which had an initial speed of 1.5gigahertz, the first processor made by Intel

started at 108 thousand gigahertz (Intel, 2020). The growth was quite substantial. However,

during the 2000’s, AMD began picking up quite a bit of market share mainly in low-end and

mid-end processors whereas Intel held the high-end market. With this in place, Intel continued

development in processors but also tried to diversify their products and services. In 2003, Intel

introduced a new cellular processor, the Intel PXA800f, that combined key components in a

single piece of silicon (Intel, 2020). Later in 2006 and 2007, Intel produced the world’s first

quad-core processor and began developing the classmate PC which was a small child-friendly

computer that was designed to teach children in remote regions (Intel, 2020).

In 2010, Intel purchased McAfee which was security software and services for computers

(Intel, 2020). This was a key acquisition for Intel as it supports their goal for providing excellent

security for hardware features and software on all of the Intel platforms available. Intel also

introduced AppUp in 2010, in hopes that it would spread to not only laptops, but computers,

mobile devices, televisions, and eventually smart phones (Intel, 2020). With this software, users

were able to look through a wide variety of applications to buy and or use for free depending on

the price. These applications came in a wide variety of categories from books and business to

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games and music. The application was eventually closed in 2014 due to the company wanting to

focus on other areas of the business (Intel, 2020). In 2013, Intel announced the Intel Quark which

is a small processor used to power Internet of Things (IoT) devices and wearable devices

(Hollister, 2016). This processor was just one-fifth of the size when compared to other existing

Atom cores. In addition, it only used about one-tenth of the power of current cores. The

company’s goal here is to continue growth to lead every segment of computing. Interestingly

however, Intel decided to pull out of the smartphone market completely in 2016 (Savov, 2016).

This was due to a number of failed devices that the company had developed in the smartphone

market. This is probably for the best due to competition already ruling these markets with an

extreme amount of market share. In 2018, Intel took a large hit on their stock value as it fell 8.8

percent due to the CEO announcing that the processor technology, they planned on releasing

being delayed to 2019 (King, 2018). In 2019, Intel announced the 10th Gen Intel Core processors

and Intel’s new innovation program called Project Athena which brought the bar up for computer

processing in all facets (Intel, 2019).

Products and or Services

The primary product that Intel produces is microprocessors for computers that are

manufactured by many well-known manufacturers such as Apple and Dell. In addition, Intel also

produces motherboard chipsets, complete systems, graphic cards, software, modems, memory

hardware, and even drones. The processor is the part of a computer that executes computer

programs and pretty much tells the computer what to do. This is known as the brain of the

computer. The company started with the Intel 4004, a single chip microprocessor using a silicon-

gate technology to the 10th generation Intel Core i9-10980HK with 8 cores, 16 threads, and up to

5.3GHz processing speed.

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Many devices now-a-days require a processor in order to execute instructions passed

through it to perform the duties that a product was designed to do. Therefore, due to IoT, Intel

has begun to find itself participating with many varieties of products because more and more

products are becoming connected requiring the processing of information (Whitmore et al.,

2014). With that, the company continues to develop processors focused in the area of IoT and

computing to continue to stay relevant and continue technological growth. While doing so as the

leading company in the microprocessor industry.

Operations

Intel focuses on the design of their products around their consumers and the way work and

life is conducted. Utilizing the newest possible technologies, Intel develops products with that

included in the design and ensures that the products are provided throughout the world. In addition

to designs of goods, quality management is another large operation for Intel. Ensuring that the

products and services meet the needs and expectations of not only the shareholders, but the

consumers as well is high on Intel’s priority list. Supply chain management is another operation

Intel has perfected. A sufficient supply chain can make or break Intel’s operations. Intel utilizes

automation software to identify areas in which adjustments are required to ensure operations run

smoothly. Inventory management is an operation that Intel has struggled with over the years. They

often find themselves flooding the market which ultimately hurts the price of processors. This is

often due to the high demand upon a products release. However, Intel continues to optimize this

operation to this date.

Vision

Intel’s original vision statement was “If it is smart and connected, it is best with Intel”

(Intel, 2020). This has multiple indications and can be broken up into two different segments to

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explain the companies’ vision in a whole. First, “If it is smart and connected”, in this part of their

vision statement they are referring to devices that are capable of performing autonomous

computing and are capable of connecting to other devices through wireless connectivity allowing

data to be transferred between the devices. Therefore, Intel is stating the type of products and

services that they work provide. This can be any device from mobile computing to Internet of

Things. The second part of the vision statement, “it is best with Intel”, refers to how much the

company truly believes that they are the top producers of said products and services. This is

necessary when entrusting a company to produce high quality products and services, they must

believe in what they are doing in order to produce top quality services.

Since then, the company has adjusted their vision to “We are on a journey to be the trusted

performance leader that unleashes the potential of data” (Intel, 2020). This vision statement has a

much more clearly defined goal. It states that the company will not settle for second when it comes

to providing the most powerful product when dealing with data. By this, specific speeds are not

discussed, but rather the entire potential of data as a whole more so then how fast data can be

transferred.

Mission Statement

The mission statement of Intel is stated as “Delight our customers, employees, and

shareholders by relentlessly delivering the platform and technology advancements that become

essential to the way we work and live” (Intel, 2020). There are two key components to their mission

statement that state exactly what the company’s plans are in order to succeed. The first component

refers to the way we work and live. Intel focuses their products development on how the product

or service is going to affect the end user. The second component of the mission statement refers to

how the company is constantly delighting the customers, employees, and shareholders by

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continuously providing technology advancements. The company has always been focused on

innovation and continues to pride themselves on that through their mission statement.

Corporate Values & Culture

At Intel, the values brought by the company are fearlessness, inclusion, customer obsessed,

one Intel, truth, transparency, and quality (Intel, 2020). Being fearless, Intel is not afraid to take

risks. They have shown this in the past diversifying their products and services and learning from

failures. This has supported growth for the company and continues to push the limits of innovation.

Inclusion and one Intel are similar mindsets. The two create a family like culture and support team-

based contributions. This allows employees to work at their fullest potential which also supports

individual growth which results in higher quality products and services. Customer obsession in

business is not a bad thing. Focusing on the wants and needs of customers is what Intel does best.

This allows them to deliver products that consumers are happy with. Afterall, they live by the

saying, “our customers’ success is our success” (Intel, 2020). Being customer obsessed falls

straight into being honest and transparent. Intel prides themselves on being honest and ethical with

information and customers. Lastly, quality is what it is, quality. Intel strives to ensure safe

workplaces and to deliver quality that no other company can top. They instill discipline in their

employees and partners to provide products and services that everyone can always rely on.

Strength, Weaknesses, Opportunities, & Threats (SWOT) Analysis

Strengths

One of the key strengths for Intel is that they are a global leader in technology and the

mastermind behind processor development. The products produced by Intel are used in pre-built

computers, laptops, many other IoT devices, and have been a major focus of the gaming

industry. Intel is the 2nd top semiconductor sales leader as of 2018 (Manners, 2018). This plays

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as a huge strength for Intel as it creates a barrier of entry for competitors and allows Intel to

benefit in other areas such as research and development. Branding is another strength that the

company has had tremendous success with. Their brand value currently sits at 12th, with a value

of $39.5 billion (Intel Newsroom, 2020). With that brand value comes brand recognition.

Fortune ranked Intel as the 3rd most admired company within the semiconductor industry

(Lbelanger, 2020). The branding has built trust with consumers so much that it is a no brainer to

expect Intel to participate in leading technological advances such as artificial intelligence.

Having a strong free cash flow is another strength that is allowing Intel to participate in

diversification by investing in new projects (Macrotrends, 2020). With that, the last strength to

mention is Intel’s ongoing research and development. Intel is ranked the 19th most innovative

company in the world (Columbus, 2020). The company continues to innovate and create new and

improved processors for computers and other devices which continue to support growth in the

entire world.

Weaknesses

Intel’s major weakness is the fact that the company is largely dependent on a single facet

of business. Being so invested in microprocessors has made the company successful however,

this holds back the potential of the business with the free cash flow that the company has to be

able to expand further. While Intel continues to attempt to diversify their products to reach more

of the other IoT devices, it remains largely dependent on the computer industry. The company

has recently stopped participating in the mobile market which pushes them further into a singular

strategy. In addition, this weakness will truly show if the computer market takes a hit as it

directly relates to the business that Intel provides, therefore Intel’s revenues will be directly

impacted and the company will not have other means to make up the difference of the revenue

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lost. Intel prides itself on quality and with high quality comes high prices. This is another

weakness of Intel. Due to their higher quality product, the company often times remains one of

the higher costing products within the market. While this has not stopped them in the past, in

recent years AMD has been making gains against the company proving that this is a true

weakness where consumers are concerned (Cooper, 2008).

Opportunities

Internet of Things, big data, and artificial intelligence (AI) are going to be the three

largest opportunities for Intel. Regarding IoT, there are five different categories of devices,

consumer, commercial industrial, infrastructure, and military IoT (Maayan, 2020). Being the

masterminds behind processing data it only makes sense for Intel to participate in research and

development of IoT. These five categories give Intel a wide area in which the company can

participate with IoT and really excel their businesses participation in the industry. It is estimated

that in 2020, there will be 31 billion IoT devices (Maayan, 2020). Every single IoT device will

require a processor of some sort in order to process data, therefore there is a need for Intel’s

processors in every single device.

Big data science jobs are estimated to grow 364,000 jobs by the end of 2020, a 28%

increase (Milenkovic, 2020). With the mind set of improving everyone workplace and living

space, Intel is surely needing to take advantage of big data and use it to improve those areas.

Intel can dive into this field by utilizing the research and development the company is well

known to have to create processors in which completely benefit the processing of big data that

supports analysts. In addition, the company can take it a step further and make complete chipsets

and systems designed to process big data.

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If Intel plans on diving into big data, then they might as well step into the artificial

intelligence world as well. AI has an impeccable ability to work with data analytics that it should

be implemented when processing big data. The company can develop software that analyzes big

data using AI. A step further, Intel can develop systems designed around allowing AI to work

with IoT while analyzing big data to support the performance of the IoT devices. Overall, the

trio, AI, big data, and IoT, is a must for any technologically innovative company to research and

develop.

Threats

Advanced Micro Devices (AMD) provides the most significant threat towards the

company. AMD is their largest competitor when it comes to microprocessors and the

semiconductor industry. In addition to AMD, the microprocessor market alone can be considered

a threat towards Intel considering that the company is so focused on this sole sector. If the

company was more diverse in products and services, then the microprocessor market would not

be as much of a threat, though if the market becomes so volatile then it can affect the company in

a negative manner. High expectations are another threat towards the company. More so towards

the company’s brand than the actual value of the product, however, the company has always

marketed their products with such high expectations and most of the time pulls through.

However, this is a large threat with the rise of AMD as the average Intel consumer always

expects that whatever is developed by Intel must be better performing than what AMD can

produce.

Competition

Intel’s number one competitor is AMD. AMD is a company that participates in the

semiconductor industry developing computer processors, graphic cards, chip sets, and other

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electronic goods just like Intel. In competition when it comes to computer processors, the two have

gone back and forth when it comes to pricing and power however, it as been a general theme that

Intel has always produced the higher priced higher quality device (Kobylecky, 2016). As of recent,

AMD has made strides in their processor development while maintaining lower prices than Intel

(Kobylecky, 2016). This has increased the amount of competition towards Intel.

Qualcomm is the second competitor for Intel. While Qualcomm focuses more on the

mobile device and Intel does not, they still produce semiconductor components and software for

other devices such as modems, laptops, vehicles, and even watches (Qualcomm, 2020).

Mentioning Qualcomm as a competitor is important with the expansion of IoT devices. Qualcomm

has been focusing on smart homes, smart cities, and even artificial intelligence. While the company

is much newer than Intel, it still puts up a tremendous amount of competition.

The third competitor to Intel is going to be Arm Holdings (ARM). ARM is a semiconductor

and software development company based in the UK. ARM is known for developing the

architectures that are licensed out to other companies that use the architecture in development of

memory, interfaces, and radios (ARM, 2020). ARM has also dabbled in the development of

microprocessors. Google has given ARM quite a bit of attention in including their processors in

Chromebook laptops and Apple has also given ARM the attention including their processors in the

infamous iPhone (ARM, 2020).

Leadership

Intel is headed by Robert H. Swan, the current CEO of Intel. Mr. Swan has been apart of

the spear head when it comes to the saying “One Intel”. He has been pushing for the entire

company to be more open when it comes to communicating issues and problems within the

company. Mr. Swan participated as the CEO during the companies strongest performing quarter

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in late 2019 where their revenue reached $19.19 billion (Stank, 2019). The optimism coming from

Mr. Swan has supported the culture change within Intel to this day. Along side Mr. Swan is George

S. Davis, one of Intel’s Executive Vice Presidents (EVP) and the Chief Financial Officer (CFO).

Mr. Davis come from Qualcomm Inc. where he worked as the EVP and CFO as well. He is

responsible for the global finance organization where internal audits, tax, reporting, and investor

relations are dealt with (Intel, 2020). Intel’s executive management team is made up of 21 different

vice presidents and the CEO himself. Each vice president is a general manager of a separate aspect

of the business.

Financial Outlook

Intel currently sits at the second highest market cap within the semiconductor industry at

around $210,141 billion (Macrotrends, 2020). The revenue for 2019 was $71.965 billion

(Macrotrends, 2020). Since 2009, the company has experienced a steady growth in revenue at the

end of each year. Between 2016 and 2019 the company experienced a steep growth of $20 billion

in revenue alone (Macrotrends, 2020). By the end of the quarter in June 2020 Intel was at a 19.53%

increase year-over-year (Macrotrends, 2020). The companies stock price history had a high of

$69.29 per stock and a low of $43.63 per stock (Macrotrends, 2020). The average stock price is

around $56.92 per stock but the highest ever was back in August 2000 where the stock price

reached $74.88 per stock (Macrotrends, 2020).

Strategies

Intel has had winning strategies since the conception of the company. In order to continue

growth Intel has focused on research and development as a primary source of that growth

(Rowland, 2017). Ensuring the company is staying on top of technology developments and trends

has been vital for the company to ensure that they stay as a leader in the technology industry.

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Secondly, the company has maintained many partnerships and other deals with technology

companies that ensures the company maintains a significant market presence (Rowland, 2017).

One of the key partnerships that has just recently ended for Intel was the partnership with Microsoft

as an example. The third and fourth strategies used by Intel is market development and

diversification (Rowland, 2017). While it may seem odd to bring these strategies forward as Intel

announces that they are pulling out of the mobile industry, the company still practices these

strategies. This can be seen by the expansion into IoT devices and maintaining the development of

small microprocessors for these tiny devices that are apart of the family of IoT.

Conclusion

Intel has experienced growth since the beginning of its creation in 1968. The company

has a strong emphasis on innovation and togetherness. This has helped support the research and

development that the company has continued to use to fulfill their vision and mission. The goal

of the company is not just to make money, but to make the world a better place as a whole by

increasing the capability of processing data and allowing data to be used to its fullest potential.

Intel has had tremendous success in doing just that throughout the years it has existed and

continues to plan to do so in multiple other areas rather than just within computers.

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