Strategic Management: Intel Organization

INTEL CORPORATION
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Intel Corporation
Business organizations are facing a changing operational environment, thereby demanding their adaptation lest they fail. Multiple political, economic, technological, legal, and social factors affect business operations globally. Such factors are dynamic, and managers barely understand what they will experience at any point. Such dynamism has motivated managers, especially in multinational organizations, to embark on strategic management to steer their organizations into sustainability. While businesses can set goals and hope to achieve those goals, there are always failures characterizing operations in attractive and dynamic environments. Intel Corporation is one of the organizations that are presently faced with the need to re-strategize or fail. Intel has been a market leader in its industry, and people who understand technology would attest to having used their products. This paper analyzes Intel through a proper strategic analysis to identify its primary problem before delving into strategic options that could help the organization regain its position in the industry. Implementing a futuristic growth strategy should help Intel’s advancements into new markets with new or more efficient products likely to help the organization in its growth trajectory.
Strategic Analysis
Intel Corporation is an American multinational technology company located in Santa Clara, Silicon Valley. It was founded in 1968 and has grown to become the market leader in manufacturing semiconductor chips (Hofmann et al., 2017). Currently, Intel is the market leader in the manufacturing of semiconductor chips by revenue. Most personal computers presently run on microprocessors from Intel. Some organizations that use Intel’s chips include HP, Lenovo, Dell, and Toshiba, among other leading global brands in computing. Intel has a wide range of product portfolios that consists of embedded processors, graphic chips, flash memories, server processors, integrated circuits, network interface controllers, and motherboard chipsets. All the above product categories have catapulted Intel into the most successful organizations in the US.
Intel’s historical growth has been anchored on specific strategies. Among the notable strategies was an emphasis on innovativeness. The 1990s marked the primary period for Intel’s growth with the advancements in the developments of personal computers (Hofmann et al., 2017). Intel advanced its semiconductors into computer chipsets that became popular with reputable brands in the computing industry. Intel is also highly diversified and has a wide range of product portfolios that have reduced its operational risks while advancing in the dynamic industry. Ultimately, Intel is known for its vertical integration and takes all the activities in their value. The manufacturing of Intel’s semiconductors and processors is in-house. With an advanced emphasis on vertical integration, the organization limits the costs that it undergoes in manufacturing. Also, it can control its prices considering the manufacturing opportunities. It is worth noting the Intel depended on its superior marketing strategy to gain market leadership. “Intel Inside” is a household phrase that eased the interactions between the organization with its customers or other stakeholders (Hofmann et al., 2017). Given the comprehensive understanding of its operational environment, Intel has traditionally stayed at the top of its industry. However, contemporary developments could steer Intel back to unrecoverable failures.
SWOT Analysis
A detailed understanding of Intel’s present challenges and how to overcome them should begin with an insightful analysis of the organization’s internal environment. SWOT analysis is a framework of organizational analysis that helps to understand the strengths, weaknesses, opportunities, and threats that a business organization faces in its activities.
Strengths
Intel showcases multiple strengths in its present position. Primarily, Intel remains a leader in the technology industry. Its processors are legendary and used in various items, including gaming consoles, laptops, desktops, and servers. Its brand has grown extensively, and it is the one that is mostly associated with the computing world. Intel also has a reputable brand. With a revenue of $77.8 billion, Intel is the 7th most valuable brand among technology companies globally (Ouro, Lopez-Novoa and Guest, 2020). Fortune indicates that Intel’s brand is ranked 46th among the most admired companies in the world. Ethisphere also published Intel as among the leading organizations in ethics. With such a brand, Intel has managed to attract the inputs of a wide range of customers. The other strength that Intel has showcased through its years of presence is in research and development. Intel has invested heavily in research and development in an organization that operates in a highly competitive industry. The Global Innovation of 2020 ranked Intel as the 5th most innovative company globally (Calore et al., 2018). The other strengths that Intel has showcased include the market share in which it is the leading organization and presence where its operations are present all over the world.
Weaknesses
Intel also showcases notable weaknesses in its operations. One of the biggest weaknesses of the organization is overproduction. Intel has the habit of overproducing its semiconductor chips. Besides flooding the market, such a habit also runs the organization through a high cost of production. Diversity is another weakness that Intel faces presently. The organization is majorly present in the computer market segment, which has limited its growth. The other notable weakness of Intel is decreasing profits. While the organization still stands among the most profitable companies globally, the rates are dropping, and the increasing competition is not helping. Ultimately, Intel has a problem with its services in developing economies (Fasi et al., 2021). While Intel has shown efficiency in servicing its developed markets, such as the US and the UK, it casually addresses the needs of its developing markets, which could hamper its growth considering the impacts that the developing world instills in the growth of industries.
Opportunities
Intel can still grow through the multiple opportunities that it faces presently. The first opportunity comes with the computer era, and the demand for computer products and services keeps increasing (Calore et al., 2018). Intel can take the opportunity to diversify into more product portfolios and stay assured of sustainability. The other opportunity comes with the advancements in smartphones. Smartphones have become essential to many consumers. As a developer of chipsets/semiconductors, Intel can advance into the smartphone industry. Drones also provide a new platform for Intel’s growth. In the future, drones will be useful in surveillance and logistics. Such systems will need chipsets that only organizations such as Intel can be trusted to make. Ultimately, the motor vehicle industry is opening an opportunity for Intel products (Adamski et al., 2017). Processors for automatic cars will be needed, especially with advancements in electric vehicles. Taking such opportunities will help Intel to advance its growth agenda deep into the future.
Threats
Intel is facing multiple threats that it must address for future stability. The first threat is dependency. Intel is too dependent on the singular product line, which can be risky. In an industry where advancements are inevitable, focusing on a single product line could lead to easy failures (Calore et al., 2018). Intel also faces threats in China. China has grown to become a manufacturing hub of the world. While the Chinese products have reliability issues, they are advancing fast and are extremely cheap. That eases their market penetration compared to more stable brands such as Intel (Sorokin et al., 2020). The other threats that Intel is facing include the growth towards hands-free devices that it has ignored and the emerging price wars with more companies advancing their development of chipsets.
Competition
The SWOT analysis above outlines competition as the biggest challenge that Intel is poised to face currently. Intel’s competitive edge is crumbling on three fronts. The first front is the competition with consumers. Intel’s chips are built on the x86 architecture, which is different from the ARM chips. The difference between the two chips is simple (Ouro, Lopez-Novoa and Guest, 2020). That is, as Intel chips are built for high performance, ARM’s are designed for efficiency. ARM chips are also characterized by customization that Intel chips have failed to match. Building on ARM-efficient chips is easier for most consumers as they can add their customizations for better outcomes. With the advent of ARM chips, organizations that were Intel’s consumers have grown into their competitors. Amazon started the wave when it replaces Intel chips in the Amazon Web Services data centers. Amazon reported that the custom chips perform 40% better than Intel’s when set into different benchmarks (Adamski et al., 2017). Apple followed suit by ditching Intel processors for their M1 processors that they believe are better performers. The latest organization to join the new wave is Microsoft that is beginning to develop its ARM-based processors. The fact that most of Intel’s consumers are established organizations with the ability to advance and become cost-efficient, Intel must re-strategize.
The last fronts of competition that Intel faces are competition with NVIDIA and AMD. NVIDIA and AMD remain the primary competitors of Intel. NVIDIA’s graphics processing units (GPU) have become more efficient in accelerating heavy workloads such as artificial intelligence than Intel’s chipsets. NVIDIA has shown its intent in becoming a market leader, especially with the acquisition of Mellanox in 2020 (Fasi et al., 2021). With Mellanox in place, NVIDIA has become a competitor both in chipset development and networking. NVIDIA is also planning to acquire ARM, which could pose the biggest problem to Intel if approved. With the acquisition of ARM, NVIDIA will boost ARM’s high energy-efficient CPUs, Mellanox’s high-performance networking, and NVIDIA’s best accelerators. The move could hamper Intel’s growth. Intel also faces competition from AMD. AMD Ryzen processors are becoming more popular and cheaper, which is bad news for Intel. Compared to Intel’s 10th generation processors, Ryzen 500 processor has proven to offer better outcomes in multi-threaded computing, single-threaded computing, and gaming (Ouro, Lopez-Novoa, & Guest, 2020). All such competition can hamper the growth trajectory of Intel.
Strategic Options
Strategic Alliances
Intel has to explore a range of strategic options to overcome the challenges that it presently faces in operations. The first strategy is the pursuance of strategic alliances. Intel’s biggest challenge, as noted in the strategic analysis, is competition. Even with its resources, Intel has not managed a faster development towards new and more efficient products. Intel keeps struggling to develop 7nm chips that are more efficient and high performance while competitors such as NVIDIA and AMD have integrated their development int...