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Executive Summary
Intel is a famous multinational American organization which is expertise in producing microprocessors and different other parts of the personal computer. As per the growing developments, different types of modern concept, theories, and technologies are introduced in the information technology industry. In this paper, we will discuss the current situations of the Intel organization. We have analyzed the different perspectives of the organization such as its market segment, product, competitor analysis, and various others. All these help us in providing a solid knowledge about the current market position of the organization and its strategies to deal with its competitors. A deep analysis of organization provides us knowledge about the core products of the organization which help the organization in gaining competitive advantage and large size of shares in the existing market. If the organization want to gain regular success in the global market, then it should focus more on maintaining the existing quality of its products with which it can represent itself in the market. The quality of its products and innovative technology will become the main factor on the basis of which the organization can make itself the leader of its products like microprocessors. Thus, the overall knowledge about the market position and its strategies provide us with a glimpse about the organization which can be used in future products significantly.
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Introduction
Intel Corporation is known as an American Multinational Corporation which specializes in manufacturing high technical products and services. It is a technology organization whose headquarter situated in Santa Clara, California. Intel established by Robert Noyce and Gordon Moore. In this paper, we will study about the competitive position and capabilities of the market in meeting the different requirements of the market. External environment and SWOT analysis study enable us to know the features, and qualities of the organization to survive in the market on long term basis (Spoon, 2014). The organization considered as a highest valued semiconductor chip manufacturers as per its revenue. It is considered as an inventor of the x86 series of microprocessors. The quality of products makes the organization different from the other existing organizations. Intel Corporation provides different processors for computer system producers like Lenovo, Dell, Apple and Hewlett-Packard. It is an organization which spent a huge amount of its revenue in conducting research and development activities. The high quality of research enables it to introduce innovativeness in its product. The organization was established in 1968. It deals with a range of products such as motherboard chipsets, flashes memories, embedded processors, network interface controllers, graphics chips, and other devices related to computing and communications.
Current Marketing Situation
Market Segments
Intel operates through the following business segments: Client Computing Group (CCG), Data Center Group (DCG), Internet of Things Group (IoTG), and Software and Services Group (SSG). The CCG segment includes all the platforms that have been crafted for tablets, desktops, notebooks, wireless, phones, mobile communication, etc. The DCG includes platforms that have been crafted for communications infrastructure, enterprise, cloud, technical computing segments, etc. Intel has an intense competition with Avago Technologies (AVGO) in this particular segment, and with the acquisition of Broadcom (BRCM) by Avago, a big deal has been created in the data center market (Annual Report, 2015). On combining these two, Intel has been facing a run for its own money in the marketplace.
On the other hand, the Internet of Things Group includes retail, industrial, transportation, home and building use along with other market segments. The Software & Services Group includes software products for delivering solutions that help in securing networks, mobile devices, computers and software products and related services which help in the promotion of the Intel architecture as the perfect platform for the development of software.
Product
The organization provide a different range of products and technologies, containing a chipset, microprocessor, multichip package or SoC. A microprocessor- the central processing unit of a computer system- controls devices or processes system data in the different systems. The organization offer single or multiple processors in different cores.
A chipset transmits data between the input and the microprocessor, storage devices and display like a mouse, hard drive, optical disc drives, and monitor (http://csimarket.com/stocks/compet_glance.php?code=INTC). Chipset enhances the video, audio and other capabilities in a systems to perform different logical functions. Apart from these the organization also offering following technologies to make it more competitive:
Transitions to next-generation technologies: The organization is considered as a market leader in transitioning the next-generation process technology and producing a latest product by utilizing such technology. The products of the organization are mainly utilizing 14 nm process technology in its existing market, and it focuses more only on the development of next-generation 10nm process technology for its products (Annual Report, 2015).
Alignment of its network of assembly and manufacturing with different test facilities. The organization spent a significant amount on conducting research and development activities, which facilitate the organization to have more control over its manufacturing processes, design, development and quality control of products (http://www.intel.com/Assets/PDF/general/Intel_IT_2011APR_English_standard.pdf).
Competitive Analysis
Competitive analysis is considered as a process of recognizing the potential competitors and their strengths and weaknesses. It helps the organizations to develop product or services which are unique from their potential competitors. Competitive analysis of Intel is done in the following manner.
The close competitor of the organization in revenue and operating segments are IBM and NVidia. IBM is considered as the largest manufacturer of personal computer processors or advanced micro devices (Fleisher, 2015). On the other hand, NVidia is considered as the largest manufacturer of the system-on-a-chip unit or graphic processor.
In the manufacturing of DEG microprocessor, Microchip Technology is considered the closest competitor of the Intel Corporation. MCHP is especially dealing in manufacturing microcontrollers, and analogue and memory semiconductors (Fleisher, 2015).
In the manufacturing of motherboard, DEG chipset, Advanced Micro Devices is considered the potential competitor of Intel Corporation (http://www.intel.com/Assets/PDF/general/Intel_IT_2011APR_English_standard.pdf). It is the organization which competes with the Intel in several important markets.
EMC Corporation is also considering a strong rival of Intel in producing data centre products. It is an information infrastructure organization which was acquired by Avago Technologies during 2014 (http://www.investopedia.com/ask/answers/120114/who-are-intels-intc-main-competitors.asp). It is mainly dealing in production of MIPS processor, NetApp, semiconductor and PMC-Sierra.
Distribution
The company uses intensive distribution and tries to cover as much market as possible for it to gain. The distribution channel of the company updates on the regular basis for correcting any mishappening taking place (http://www.intangiblebusiness.com/news/marketing/2005/11/ingredient-branding-case-study-intel). The company also pays full dedication and attention to the critical points especially in the context of effectual packaging and purchasing points. The organization has been benefitted due to its distributing channels being intense enough to penetrate the market at one time.
SWOT Analysis
Strengths
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Intel is a well-known brand name and has strong brand loyalty in existing market.
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Pioneer and dominant suppliers of microprocessors for personal computers.
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World’s largest chip and semiconductor manufacturer, based on revenue (Fan, 2008).
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Superior chip design which enables the organization to deal with growing edge mechanised capability.
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Large market shares of the microprocessor.
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Broad portfolio of high-quality technical products.
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Utilization of advanced technology during a production of products such as composite and utility transmission line.
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Core competency in developing differentiated products such as microprocessors.
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Global Presence in countries like US, UK, and Germany.
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Expansion of portfolio to include products with higher stiffness, and impact, improved wear and enhanced the appearance or low emissions (Annual Report, 2015)
Weaknesses
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Utilization of Decisive strategies to defend its market position.
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Poor decisive strategy lost its leading market position.
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Faces a high financial loss during 2008 which bring a decline in its revenue level (Annual Report, 2015).
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Failed to get the economies of scale in its existing market.
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The absence of business in ultra-mobile processors market.
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Poor relationship with supplier due to inability of a supplier to meet delivery orders on timely basis (http://seostar.96.lt/wp-content/uploads/2016/03/Intel_portfolio-version.pdf)
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High capacity constraints due to labour disruption or production delays
Opportunities
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Changes in preferences of customers bring opportunities to the organization to meet their demands with the changing products.
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Growing demand for personal computers as well as innovative products such as laptops, and tablets.
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Continuous development of technology provide opportunities to offer new and innovative products.
Threats
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High-level completion between competitors of the industry.
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Increasing volatility in prices and availability of raw materials has a significant negative impact on the financial margins.
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Fluctuations in environmental regulations concerning climate change influence the profitability level
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Presence of various unanticipated operational or commercialization difficulties such as the development of competing technologies
Objectives
Sales Volume
The Company has been facing low sales in the Personal Computers and expects that the growth in chip sales for data centres would be helpful in making up for the loss being incurred in the PCs. With the release of new chips that are specially designed for the enterprise and on the basis of Broadwell micro-architecture, the company believes that the sales are going to be picked up for the chips (Annual Report, 2015). The organization is, however, gaining momentum in the second half and remain highly cautious in the PC market. Therefore it is expecting high forecast built on the programmable solutions, internet of things and strength in data centers.
Market Share
Intel has enjoyed the biggest market share in overall worldwide mobile PC microprocessor with 84.4% and PC microprocessor market which is over 79.3 percent. Historically, the company was considered to be one of the top ten sellers of semiconductors in the world, in the 1980s and pioneered the chip market on the basis of revenues and achieved the highest ever position in 1991. The major competitors in the market of PC Chip include VIA Technologies, Advanced Micro Devices, Nvidia and Silicon Integrated Systems. In the field of networking, the competitors include Infineon, NXP Semiconductors, Marvell Technology Group, Broadcom Limited and Applied. In the fourth quarter of 2015, the Intel's x86 processor market share was 87.7 percent and was 86.3 percent in 2014 (http://files.shareholder.com/downloads/INTC/1830462424x0x883908/C237A7E5-BD77-4792-BCFD-8019EFEBAAB9/Final_2016_Proxy_Statement_web.pdf).
Profit
Intel has seen to made a high progress especially in its restructuring of initiatives which benefitted in focusing on the internet of things and cloud services. However the company and its key businesses were seen to failed in delivering considerable enough growth for boosting the promotion of chip sales. A revenue of $13.5 was collected for the Quarter 2 2016 representing the growth in revenues by three percent (http://innovisio.blogspot.in/2012/11/using-innovation-to-create-competitive.html). But in the latest quarter, the profits were seen to be down by more than half limiting it to $1.3 billion (almost 51 percent loss) and resulted in high restructuring costs of $1.4 billion.
Marketing Mix
Place, product, promotion, and price are considered the important 4 P’s in marketing. All these four products together formulate marketing mix. Marketing mix divides a business into different business pieces that can be rearranged and tweaked dependent on the requirements of the customer (Liu, 2016). Marketing mix of Intel Organization are following:
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Product: During its initial stage the organization was dealing with shift-register memory integrated circuits and random-access memory. After getting experienced in its operations, it becomes the leader OF DRAM, SRAM, and ROM in its existing market. After this achievement, the organization produced its first microprocessor. During 1971, the organization launched Intel 4004 in its existing market. During 1983, the organization only focus on production of microprocessors, but they were not able to earn high revenue (Mintz, 2013). During 1989, the organization launched 486 microprocessors and various others. It spends a huge amount of its income on designing microprocessors and become a growing and dominant provider of microprocessors for different personal computers.
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Place: Intel Corporation has its base in Santa Clara but mainly it operates in a different range of countries. The largest concentration of the organization workforce is in Washington country with 18,000 employees in different branches. The organization deals in different 63 countries such as Russia, India, Malaysia, China, Costa Rica, Argentina and Ireland. Intel is considered as the biggest private employer in Oregon and New Mexico (Grant, 2016). Mexico is considered as the largest industrial employer country. The organization has different development centres and production plants in different countries such as China and Israel. It also has a big distribution channel that is managed on the regular basis so as to measure any mishaps. It especially concentrates more on effectual packaging and purchase points. The massive distribution network of the organization helps it in penetrating large markets.
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Price: The pricing policy of the organization depends on different factors. The organization has achieved an efficient position in the market, and its pricing strategies played an attractive role in its achievement. It permits its competitors to determine a base price of their products and formulate pricing strategies on the basis of these rates. The cost of Intel products is lower than its competitors (Fan, 2015). This is because the organization utilize mass production concept, due to which the organization earn high revenue in case of lowering the price of its products.
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Promotion: Branding of the technical product is considered very difficult for an organization. The main reason behind the popularity of the organization is that it teaches different business houses how to market a product in the market that they cannot perform efficiently. The main problem in front of the management of the organization is that the produced product is within the CPU, and the customers cannot directly observe the efficiency of the brand, so it could not be marketed by following traditional methods of marketing (Huang, 2014). It efficiently introduced its products by providing them with the name of qualities of performance and speed. With the help of these names, the organization has leveraged its brands into a high brand equity. It adopted the policy of mass marketing for promoting its products. During 1991, the organization decided to utilize a marketing and branding campaign known as Intel Inside; then the organization earn a huge popularity in its existing market.
Recommendations
The organization is considered as a market leader in transitioning the next-generation process technology and producing a latest product by utilizing such technology. The products of the organization are mainly utilizing 14 nm process technology in its existing market, and it focuses more only on the development of next-generation 10nm process technology for its products (Annual Report, 2015). All these advancements in products facilitate the organization in different areas such as energy efficiency, cost, and performance features. It is the responsibility of the organization to utilize the product in an efficient manner. High-level collaboration with its customers and third parties facilitate the organization in operating significantly on multiple operating systems and end-user platforms and products (http://innovisio.blogspot.in/2012/11/using-innovation-to-create-competitive.html).
Conclusion
After studying all this, it can be said that innovativeness and high quality of existing products enable the organization to capture the large size of existing market. With the help of SWOT analysis, the organization can utilize its strengths in an efficient manner to capture the available market opportunities (Liu, 2016). Large focus on the quality of products also facilitates the organization in providing high-level customer satisfaction to its target customers. The organization should also focus more on an expansion of its business activity which can be efficiently done by enhancing its product portfolio.
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