Intel Corporation

Hult international business school.

Introduction:

The particular case study begins by stating the various problems associated with the company after the outburst of smart phones and smart technology in the world, despite the fact that Intel was the leading manufacturer of microprocessor and other computer chips in the world. The company enjoyed a net worth of $11 billion with revenue of over $53 billion, as reported by their finance department. And next to this was AMD which has lost almost $1.2 billion of the gross sales reaching an aggregate of $5.2 billion. Despite their market dominance, Intel still faced a considerable threat from a new technology that rapidly consumed the IT market. Smart phones and smart technology became the latest trend for common users, and many of them tend to buy a tablet or smart phone instead of a laptop or personal system. In 2013, the global sale of personal computers fall almost 13% and one of the largest declines in a period of 10 years and this particular downfall increased with each year forecast.

Major problems:

In order to identify the major problems associated with the Intel Company, the 5Ws is used in order to understand the severity of the problem in this particular case study

· The first W is associated with what happened actually? It is clear from the case study is that the PC market has faced a global downfall that has affected Intel Company and their processor market

· The second W is related is who is involved in this particular scenario? As per the case study, smart phones and tablets has grabbed a large amount of consumer and market share that has led to create a very serious threat for IT industries, including Intel company. One of the most prominent and direct competitors for Intel was the ARM manufacturing company, which was developing microprocessors and microchip for different smart phones and tablets.

· The third W defines when this particular case took place? There is actually no date or time to support this that when exactly this particular scenario took place. The smart phone technology rapidly grabbed the market share within years, however, a figure was stated by the case study indicating that in the year 2013, the global sales of PC went down up to 13% and by the end of 2016, the market share of smart phones and smart technology will reach 60%

· The fourth W describes the place where this case occurred. Clearly, Intel is an international label, one of the leading companies to manufacture microprocessor. However, reviewing the particular case study more thoroughly, the ARM processor is a British based company manufacturing smart phones microprocessors and chip.

· The fifth W refers to the reason why this case happened? This is probably the core of this case study, that according to Moore’s law, the size of electronics are decreasing with each passing year, meaning that with each passing year, there are new technologies that are being invented and tested to replace its previous version. Many of these inventions are better in every aspect than the previous version, making it the most profitable product in market.

Significant Factors

The main factors that are associated with the following case study are listed as:

Products and services: One of the primary reasons is the products and services that Intel is producing at this moment. Right now, Intel has only managed to manufacture one series known as the Atom series in response to the ARM based microprocessor. However, there is very little phone that are using atom series in their smart phones, and with the growing demand of smart phones and tablets in the market, Intel must focus in this line of area as well and make sure they manage to acquire some android, windows or iOS based platforms to use their hardware

Ideas: The second and most needed factor that has led to this particular case is the lack of innovative ideas. In this modern age, where the world has shifted from industrial to a global age, innovation is the essential component for the progression of any company. Intel has managed to manufacture one of the most powerful microprocessor in the PC market industry, but they never tend to look forward and finding new market opportunity. When smart phones and smart technology become the market trend, Intel was far less behind in the race, and despite its innovation and technology integrated in the PC microprocessors, it was nowhere near the smart phones microchips and processors.

Production: Intel has managed to create a well-established production cell for PC microprocessor, chips and other components. It has spent resources in order to maintain that position, which might have led to shift from Research and development towards production of components. As stated above, the resourceful component is the company’s main weapon, and it was production that led Intel the leading microprocessor company in the world.

Recommended course of action:

The recommended courses of action are:

· To immediately enter the smart phone market and develop a new phone series that have a better processing unit, and an appealing design to compete with the other big guns like Samsung, Google, LG and Apple. A quick start could imply an acquisition of a smartphone/tablet company that allows Intel enter the market with a completely new line of products. The necessities and strategies to apply after this could be tackled more effectively.

· Intel can undergo collaboration with many of the companies, for-example, Google, to allow them to establish an android based phone that has the android software and the Intel hardware, creating a symbiosis. Intel can then use its massive marketing channels to promote the phone among the commercial masses throughout the world and see how they react to it.

· Last recommended course of action is to give up on the tablet and smartphone industry and focus on re-establish a solid position in the computer industry, investing in more R&D to overcome competition (and potential new enters).

Strategic Alternatives:

The strategic alternatives can be devised by using the 4Ps marketing mix in order to plan the best strategy for Intel to use in their business operations. These are:

· Product & services: The ARM based microprocessor and microchip specialized in smart phones and smart technology that is being used in the majority of smartphones and tablets. Intel must decide if focusing or not its manufacturing plan in this product line as well. The company could tackle the entry to the new industry by creating new smartphones or tablets, or by providing more competitive components to other companies such as Microsoft, or Huawei. Intel could develop more of the Atom series and launch new phones based on these series. The company may also decide not entering this market, and therefore focus on improving what it already has to offer to computers at this moment. Consolidating its position in the computer industry can be a good choice to follow.

· Promotion: Intel has already enjoying a well-established position in the PC market. Intel can use its promotional channels to launch its new products and to gather the consumer groups from other different corporations such as Apple or Samsung.

· Place: Intel is a leading microprocessor company in the world, there are no reservations to the where it should launch its new products (whether if those new products are new phones and tablets, chips for smartphones and tablets, or better processors for computers), but on a safer side, Intel must set a direction and based on the context start slow and limited, or enter the market more aggressively.

· Pricing: Intel must hedge its prices to keep a competitive edge over its steadily growing number of competitors. In all the industries involved (computers, smartphones, tablets, and chips), competition is high, and lower prices demark a difference.

Implementation strategy:

The implementation strategy can be divided into four steps, as constructed in the previous sections:

· Innovation: The first and foremost strategy that needs to be implemented is improving the innovation and Research and development sector of Intel, specifically in terms of smart phone and smart technology. This will help in inventing new technology that can be further used to develop Intel’s own smart phone

· Product and services: Intel must develop a strategy to immediately plan out the products and services that can be most beneficial in the market. While retaining their PC market, Intel must establish itself in the smart phone market as well

· Collaboration: Intel must collaborate with different companies that are has a sufficient market share in the smart phone industry that will allow Intel to enter in the market and then grab consumer groups through that collaboration

· Promotion: Intel has always practiced a powerful marketing campaign from the very start of its operation and it has led Intel to grasp the number one spot in the market as well. It can use the same channels to promote its product as well and let it benefit the company by gaining new consumer groups.

Contingency Plan

The contingency plan is also based on the four steps of the implementation strategy and to rate them as per their best and worst plan scenario:

The worst-case scenario after applying the suggested strategies could simply make Intel more innovative and provide (despite of the not successful measurements applied) a new image. It would also have to face costs of operations and R&D without revenues after not being able to develop new products accepted by the market, however, this R&D gives the company a new edge to grow, once it decides if becoming more stable in the computer’s industry or expand to tablets and smartphones industry.

In the best-case scenario, however, Intel could recover its strong position in, not only the computer industry, but also in the new growing industry of smartphones and tablets, giving the company a wider area of action and hence, more revenues.

The different aspects to take into consideration when developing an action plan are:

· Innovation: (High) Innovation is the much-needed strategy for Intel in order to come up with a design of a processor that can outmatch the ARM processor. This will create new opportunities and new market share for both smart phone companies as well as consumer.

· Products: (Medium) By creating new range of products in different market sectors, Intel can able to retain its market share as well as consumer share and with that it can progress towards more R&D products.

· Collaboration: (Medium) Collaborating and merger is an important step for any industry towards rising threats and competition. Since Intel is already far behind in the smart phone industry, its best to collaborate with a certain company.

· Promotion: (Low) At this moment, promotion is the least important strategy that needs to be implemented by Intel to gain new consumer and market share.

Relevance to strategic management:

There are few strategic management terms that has been used in this case study which are the innovation, positioning, and research and development as part of strategy that needs to be implemented by the Intel Company. The marketing mix that draws the overall plan of the possible market Intel should focus its operations in. Collaboration, acquisition and merger are some of the economics and management elements that are used to join operations of different companies with mutual objectives and motives.

Intel must find its way, either entering the new market of smartphones and tablets (by creating a new line of smartphones and tablets, or developing new chips that can be taken decisively in the industry), or re-establishing its position in the computer industry to assure no new enters appear to gain market share.