GLOBAL STRATEGIC MANAGEMENT
Msc19
12257354
Le Nhat Tan
5 620 words
Table Content
Introduction -----------------------------------------------------------------------------page 2

Analyze Intel’s vision and mission for its organization, how was it implemented…...Page 4

The alarms should Intel have identified in their strategic pursuit ---------------Page 6

What Intel should have done to compete technologically?...............................Page 7

The generic business level strategy Intel pursues today……………………….Page 8

The corporate level strategy Intel pursues today……………………………..Page 9

Intel when into a strategic alliance with Microsoft, explain what possible competitive.Advantages or disadvantage could Intel gain from this relationship…Page 10

Project Future Trends…………………………………………………….Page 13

Introduction
In 1968, Intel Corporation was originated by Robert Noyce and Gordon Moore. Both of them were engineers with outstanding reputations in the field of incorporated course. They had no difficulty in getting venture funding to start up Intel. Intel announced the 4004 microprocessor in the year 1971 and in next year they increased the number to 8008.
Intel had employed nearly 25,000 employees in the year 1984, but the business of their memory chip was throbbing because of the competition from Japan. In the year 2000, Intel had incorporated 70,000 employees in the year 2000. Intel appointed Craig Barrett as the Chief executive, is looking for ways to expand beyond processors, into chips and products for networking and communications. Company appointed Grove as a wandering Intel promoter whereas day-to-day operations are handled by Barrett. (Tim, 1997)
Intel creates an amazing increase in technology every day. Intel is the world’s largest leader in silicon innovation. It develops technologies, products, and initiatives to continually advance how the people work and live. The corporation follows the principles for responsible business and the corporate code of conduct.

Analyze Intel’s vision and mission for its organization, how was it implemented and the strategies had they implemented to strategically position them in a competitive market?
Analyze the Company Mission According the company website, Intel Corporation’s mission statement is as follows: “Delight our customers, employees, and shareholders by relentlessly delivering the platform and technology advancements that become essential to the way we work and live.” As the world’s foremost manufacturer of technology-related products, Intel has continuously delivered on this mission. In the following paragraphs, the reasons why Intel has enjoyed such success with its mission statement will be delineated. The first goal contained in Intel Corporation’s mission statement focuses on not only serving customers, but “delighting” them. In order to understand how Intel achieves such a goal, we must establish who constitutes Intel’s customer base. Intel’s customers include “original equipment manufacturers (OEMs) and original design manufacturers (ODMs) who make computer systems, cellular handsets and handheld computing devices, and telecommunications and networking communications equipment; PC and network communications products users (including individuals, large and small businesses, and service providers) who buy PC components and board-level products, as well as our networking and communications products, through distributor, reseller, retail and OEM channels throughout the world; and other manufacturers, including makers of a wide range of industrial and communications equipment.” A focus geared toward customers “causes managers to realize the importance of providing quality customer service.” By placing customers first—whether major manufacturers or PC users—Intel has been able to build a positive reputation with those who utilize Intel’s products. Strong employee relations are important to the ultimate success of any company. Intel presently employs over 90,000 people in numerous countries, so the potential difficulties in “delighting” employees are quite plain to see. Intel overcomes the odds, however, and has been named one of the “100 Best Companies to Work for in America” by the Great Place to Work Institute for eight of the past nine years. In addition, Intel has been recognized internationally as an exceptional place to work. Delighting shareholders is an essential element in raising capital to pursue growth in the technology industry. Over the past 20 years, Intel has delivered on its mission to delight shareholders by splitting its stock six times and increasing stock price nearly 5000%. Comparatively, Advanced Micro Devices has not split its stock during the past two decades and has seen only relatively moderate gains in its price per share. “Intel's approach to investors appears to rest on a principle of transparency and trust. Intel ensures that investor queries are answered, whether the answer comes from the investor relations department; the public relations department; the environmental, health, and safety department; or the corporate responsibility department.” Intel takes great pride in the relationship that it has built with its investors, and as a result shareholder loyalty to the company seems to have remained strong. “Relentlessly delivering the platform and technology advancements” that Intel offers is the way that the company fulfills the aforementioned goals of its mission. Intel’s customers, employees, and shareholders reap the most benefits from Intel through its ability to produce, expand, and market its cutting edge technology. As Intel continues to broaden the capabilities of existing products while entering new markets with fresh, innovative products, the potential for the company to “delight” anyone who has a vested interest in the company becomes more feasible. Intel’s mission statement has been finely tuned over the past 35 years to become a fitting compass for the company’s future. The appropriateness of Intel’s mission statement lies in its congruence with company values and objectives. According to the company’s website, Intel’s values include “customer orientation, results orientation, risk taking, [being a] great place to work, quality, and discipline.” In addition, Intel’s stated objectives are to “extend leadership in platform and silicon manufacturing, deliver architechtural innovation for market-driving platforms,” and to “drive worldwide growth.” The effectiveness of a company’s mission statement can be measured by the extent with which the company adopts the mission. It is clear to see that Intel’s mission statement has permeated the core values and objectives to the point that all three serve as guiding elements of the company’s philosophy.
Vision of Intel Corporation is to become faster, mobile and smaller. The vision for subcontinent is to make computing and communication pervasive in the sub-continent. Intel decided to launch Linux version with some supporting software when it would release Windows version (About Intel, 2008).
The process of strategy choice involves generating strategy options, evaluating them and choosing one that suits the firm’s requirement of growth. Generally, the strategy choice begins with the evaluation of the opportunities. The firms basically choose strategies that suit their requirement of growth.
The critical strategic choice of Intel is that it ignores the standards to gain early market entry, or wait for standards and yield first mover advantages to its competitors. In the process, the firm has to first fix the future course of each existing businesses (Corporate Strategy Analyses: Intel Corporation, 2003). This involves finding out the current performance position of each of them and grabbing the upcoming opportunities.
Current members of the board of directors of Intel consist of Craig Barrett, Charlene Barshefsky, Susan Decker, James Guzy, Reed Hundt, Paul Otellini, John Thornton, and David Yoffie. Intel has a Diversity Initiative, under which it has employee diversity groups with supplier diversity plans (About Intel, 2008). Intel includes groups based on race, nationality, sexual identity and religion. In the year 1994, Intel allowed one of the first corporate Transgender, Lesbian, Gay, and Bisexual employee groups and it also supports a Muslim, Jewish and Bible-based Christian employees group. The number of employee incorporated in Intel is near about 87000 in the year 2007 (About Intel, 2008).
According to Mr.Otellini, Intel provides building blocks, including wireless networking and next-generation computing and communications architectures, for products that make people more productive virtually anytime, anywhere at Intel. With the help of advanced manufacturing technologies, the company provides high-tech products at lower costs to its customers. Due to other technology companies, the company has faced adverse business conditions in terms of restricted opportunities for its financial growth, but with its potential, Intel has gained a position to achieve growth (Anonymous, 2007)
There is proper fit between the new mission, strategies and implementation of strategies of the Intel Corporation. Intel is positioned as the no. 1 company in world for overall e-commerce revenue. On an average, Intel is getting $1 billion worth of online orders every month from the customers in 46 countries. All the information is personalized for every company and for every type of users. Half of Intel’s direct customer business is happening on-line due to the strategies made (Ramaswamy &Namakumari, 2005). The chief executive officer, Paul Otellini has restructured the corporation to refocus its core mainframe and chipset business on platforms like digital health, digital home, enterprise and mobility. All this led the corporation to the hiring of over 20,000 new employees.

The alarms should Intel have identified in their strategic pursuit Intel primarily competes in the microprocessor industry. Defining the scope and boundaries of the industry is important in evaluating Intel’s competitive position. If boundaries are not defined well enough, then firms may be considered competitors when they actually should not be. Inversely, if an industry is too narrowly defined, then forces affecting the industry may not be used for consideration in strategy development. Once an industry is defined, competitive advantages of firms in the industry can be assessed using the “five forces model” developed by Michael Porter. The five forces consist of entry barriers, extent of rivalry, supplier power, buyer power, and substitute products. Industries vary on forces that hold greater importance. Capital intensive industries naturally have entry barriers, while other industries may have a focus on cost reduction and operational efficiency as a basis to decrease competition. Intel is the beneficiary of numerous entry barriers in the microprocessor industry. The first major benefit is economies of scale. Since the production of microchips necessitates high quality equipment, Intel can produce chips at a lower cost per unit if fixed assets produce a greater number of chips. Capital requirements also prevent other firms from entering the industry. Companies in the microprocessor industry have to stay alert of trends, so large amounts of capital are used in research and development cost. Small companies cannot compete in the industry because they cannot match the cost advantages established by the larger firms. Although product differentiation is difficult to establish since quality is measured by performance and capability of chips, Intel has developed a brand image of perceived quality. The second most important force is the threat of substitutable goods. Since microchips are used as a component in finished goods and the chips have no significant physical differences, product differentiation is difficult to manage. For example, Pepsi has tried to differentiate its product from Coke on the notion of superior taste. Intel has had to differentiate its chips through capability and through marketing channels. Intel chips are given names such as “Celeron” or “Pentium” to establish a brand and establish perceived quality in the end user. AMD, a primary competitor of Intel, could produce the same processor, but the typical mainstream consumer may still choose Intel products because of effective marketing. The same perceived quality is seen in name brand drugs over generic drugs. Having entry barriers and substitution threat as industry driving forces has helped to shape Intel’s operating environment. The industry has forced technology companies to be more adaptable to change. Technology products generally have shorter life cycles than most consumer goods. As a result, implementation of strategy is as important as the strategy itself. Intel and other firms have to be efficient in operations with a concentration on speed in production and release into the market. Once a product is distributed, usually to another computer manufacturing company, it has a limited time period before prices must be reduced. Product life cycles can be short as six months to a year. Obsolescence is a concern for customers of Intel because they must be able to sell items in the market at high prices in order to rapidly recover costs. Power of buyers and suppliers is not as important in the microprocessor industry because there is competition at both levels. Intel cannot be an overwhelmingly powerful buyer, even with massive capital, because new technology must be developed every few months. There are also numerous suppliers to the industry because raw materials are readily available and there are multiple uses for supplied goods. Buyers in the industry may pay more for higher quality of raw materials because that usually translates into better quality in the end product. Rivalry in the industry is not extremely intense since Intel is one of three major firms in the industry. AMD and Texas Instruments are the two other major firms. Small firms do exist in the industry, but they usually compete in a niche environment. The small firms tend to specialize in one specific product or compete in a small area.
The growth of the industry starting in the early 1990s has also helped shape the industry. Intel and AMD are known primarily for producing semiconductors and processors, while Texas Instruments has a more diversified product line. Texas Instruments is known mainly for their “TI” line of calculators and have some recognition in developing “DLP technology” for high definition television. Although AMD is a smaller company, it is known to produce higher quality processors. Intel is known for being more marketable to mainstream computer companies such as Dell and Hewlett-Packard. AMD has sold processors in lower quantities, partially due to manufacturing capability, to lesser known companies such as E-Machines. E-Machines has been acquired by Gateway.

What Intel should have done to compete technologically?
Support activities, sometimes called staff functions, are those activities that “assist the firm as a whole by providing the infrastructure or the inputs that allow the primary activities to take place on an ongoing basis.” Intel’s most noted support activity is the company’s extensive research in areas such as technology. The firm operates with more than 100 standards and industry groups worldwide including: networking and telecommunications, general, software and web, silicon and semiconductors, and computing platforms. Intel’s affiliation with these standards and groups worldwide give way for the company’s primary activities to occur on a continuous basis. Intel’s primary rivals are AMD, Samsung, and Texas Instruments. The fact that these three companies are all technologically based like Intel, gives the assumption that the primary and support activities of each company are relatively similar to those of Intel. However, Intel feels that they hold a competitive advantage over the other companies due to the firm’s leadership in chip technology. Intel has a long history of translating technology leaps into tangible benefits that people can appreciate. After evaluation of the company, it is obvious that Intel does hold a leadership position and foresees at no time in its near or distant future losing that position.
The generic business level strategy Intel pursues today
In order to fully realize the potential outlined by the company’s mission statement, objectives, and values, Intel must capitalize on the many business level opportunities that are available to pursue. In particular, Intel should focus on strategic alliances, joint ventures, concentrated growth, and product development. Strategic alliances are “an agreement between two or more individuals or entities stating that the involved parties will act in a certain way in order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths.” Currently, Intel is pursuing a strategic alliance with Apple Computer, Inc. to offer Intel’s computer chips with Apple’s increasingly popular line of home computer systems. “This major strategic shift [by Apple] signals the end of longstanding relationships with IBM and Freescale Semiconductor, which until last year was a division of Motorola. The two companies manufacture the Power PC chips currently found in Macintosh computers.” The example that Intel has set by pursuing a strategic alliance with Apple Computers serves as an overall guide for the company when pursuing strategic alliances. Of course, there are pros and cons to any strategic pursuit, and strategic alliances are not exempt from this rule. The benefits of pursuing a strategic alliance are increased brand recognition, increased market share, and the ability to “quickly provide value to the customer” by creating another avenue for potential customers to purchase Intel’s products. The inherent risk, however, is that Intel could overstretch its assets and neglect key aspects of its business, which may allow competitors to catch up to Intel’s level of expertise.
Joint ventures would result in many of the same benefits as strategic alliances. As a “contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking,” joint ventures are an attractive way for companies to minimize risk while increasing overall market presence. Currently, Intel is pursuing a joint venture with Micron Technology, Inc. to “manufacture flash memory for use in consumer electronics, removable storage, and handheld communications devices. The new company will manufacture exclusively for Micron and Intel. Intel and Micron have each entered into separate long-term agreements to supply Apple with a significant portion of each of their share of IM Flash Technologies’ NAND flash memory output.” This joint venture, along with any others that Intel may decide to pursue, could have the benefits of allowing Intel to establish itself in a new product market while minimizing risk. Once again, however, the primary drawback of a joint venture is that Intel would be allocating assets toward the venture that would otherwise be earmarked for Intel’s current areas of expertise.
The concentrated growth strategy has a certain level of potential for Intel Corporation. By “focusing on a specific product and market combination,” Intel can continue to capitalize on and further develop its expertise as the world’s leading manufacturer of microprocessors. A concentrated growth strategy would devote most, if not all, assets toward widening the gap between Intel and competitors when it comes to microprocessor manufacturing. Unfortunately, however, Intel’s current position is not ideal for pursuit of a concentrated growth strategy. First, Intel’s industry is based on major technological advancements, which is a strike against concentrated growth. Perhaps the largest drawback of pursuing a strategy of concentrated growth would be the potential limitations it would place on Intel as a company. With so much technological experience and expertise, Intel still has plenty of unexplored potential to offer the microprocessor industry. As a result, focusing on a strategy of concentrated growth would not allow Intel to reach its fullest potential as a company. As personal computers have become increasingly commonplace in American homes, the Intel brand name has enjoyed increasing recognition as a high quality, reliable source of information technology. As a result, Intel is drawing closer to a position where marketing new or substantially improved products under the Intel name could prove very successful. Such products would be marketed to existing Intel customers through currently utilized channels of distribution. By further developing Intel’s product lineup, becoming a household name will be even more feasible, and Intel will be able to apply its expertise in more diverse segments of the technology industry. As previously mentioned, any reallocation of funds away from Intel’s core business function could result in a slipping competitive advantage in exchange for unknown results. The primary disadvantage of each of these strategies, as mentioned, is the shifting of focus away from Intel’s primary, most successful business segment. According to one Intel executive, “we operate in intensely competitive industries that experience rapid technological developments, changes in industry standards, changes in customer requirements, and frequent new product introductions and improvements. If we are unable to respond quickly and successfully to these developments, we may lose our competitive position, and our products or technologies may become uncompetitive or obsolete. To compete successfully, we must maintain a successful R&D effort, develop new products and production processes, and improve our existing products and processes at the same pace or ahead of our competitors. We may not be able to successfully develop and market these new products; the products we invest in and develop may not be well received by customers; and products developed and new technologies offered by others may affect the demand for our products.” Relaxing a competitive advantage will surely mean increased competition from companies such as AMD, Texas Instruments, and Samsung Electronics, among others. While it is extremely important for Intel to pursue business level strategies, care must be taken to follow paths that will not hinder Intel’s undeniable success in the microprocessor market.

The corporate level strategy Intel pursues today
Since corporate level strategies are a direct extension of a firm’s mission statement, core values, and objectives, it is important to pursue strategies that will help to achieve overall company goals. Corporate level strategies serve as a guide for the rest of the firm toward the overall mission, and therefore directly impact a large number of the company’s lower-level decisions. Intel’s aggressive mission, values, and objectives can be more readily obtained by choosing proper corporate level strategies. Outlined below are four alternatives that Intel could choose to pursue in an effort to achieve its overall goals.
Concentric diversification is an excellent avenue for growth, cost controls, and synergy, all of which could improve Intel’s current stronghold in the technology industry. By pursuing this strategy, Intel could potentially increase its current competitive advantages over competitors by acquiring a firm “whose products, markets, distribution channels, technologies, and resource requirements” contribute to the formulation of new strengths while shoring up any weaknesses that exist in Intel’s current corporate structure. Concentric diversification can be a costly strategy to pursue, however, and if Intel chooses to pursue this strategy in the future, acquisitions should be carefully investigated and opportunity costs closely monitored to ensure that the company is heading down the right path.
Over the past 35 years, Intel has grown into a company with nearly 100,000 employees in almost 50 countries. Along the way, Intel has acquired numerous firms, some of which are no longer of much use to Intel Corporation. Pursuing a strategy of divestiture of such firms could result in increased assets that could be put toward the latest in cutting-edge technology. For example, according to Intel’s most recent 10-K filing with the SEC, “during 2003, the company recognized approximately $758 million in tax benefits related to sales of the stock of certain previously acquired companies, primarily DSP Communications, Inc. (DSP), Dialogic Corporation and Xircom, Inc. A net benefit of approximately $420 million was recognized on the divestiture of a portion of the intellectual property assets of DSP, through the sale of the stock of DSP. A benefit of approximately $200 million was recognized on the divestiture of a portion of the assets, primarily real estate, of Dialogic, through the sale of the stock of Dialogic, and a benefit of approximately $125 million was recognized related to the sale of a wireless WAN business, through the sale of the stock of Xircom.” By divesting unnecessary business units, Intel can streamline its operation and modernize its corporate portfolio to more accurately reflect the industry in which it competes. Unfortunately, divestiture is contingent upon having a buyer who is willing to purchase the divested assets for a fair market price. Also, by eliminating business units, Intel could be selling away future, unforeseen opportunities.
Vertical integration makes sense for a company the size of Intel. With numerous products and channels of distribution, and easy way to eliminate costs and gain a competitive advantage would be to either reverse integrate into the supplier market or forward integrate into the customer market. Either method will result in better cost controls, higher quality products, and a general strengthening of Intel’s reputation. Vertical integration does not come cheaply, however, especially in Intel’s industry. A careful cost-benefit analysis should be performed before any vertical integration is pursued in order for Intel to be a savvy customer.
With a market cap over two times its nearest industry competitor, acquisitions are certainly a feasible option for Intel Corporation. Such a strategy can be pursued for numerous reasons, and careful acquisitions could potentially result from a strategy of divestiture if Intel is seeking to update its company portfolio. Acquisitions are extremely costly, however, and should be pursued with care. Reckless acquisitions could leave Intel with numerous “dead weights” that could hamper the company’s competitive abilities.
As stated, corporate level strategies are essential to the overall direction of the company. Intel has numerous alternatives to choose from, and the best choices will yield results that align with the company’s mission statement, values, and objectives.
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Intel when into a strategic alliance with Microsoft, explain what possible competitive.Advantages or disadvantage could Intel gain from this relationship.
A business alliance is a formal business relationship between two or more organizations to achieve collective business objectives. Joint ventures, franchising, cross-licensing, cross-marketing and co-manufacturing are just some of the formal structures used to govern business alliances. Each type of alliance offers both advantages and disadvantages, but generally enables a company to realize its growth potential more quickly than if pursuing an objective alone.
When Microsoft and Intel decide to co-operate and making an alliances, the boss of both company thought about the powerful combo make from two powerful company of technology. This alliance can make also many advantage. First, A business partnership can help a company to achieve strategic business objectives through the collective objectives of the partners. While conflicting goals, objectives, strategies, ethical standards and business values are some potential threats posed by alliances, opportunities to grow sales can be realized through access to new customers and increased production capabilities. Second, Growth opportunities exist from business alliances by enabling companies to penetrate new business markets. Alliances open access to each partner's network of customers and distribution channels. As an example, airline business alliances related to code-sharing increase efficiencies within the airline industry. A code-share agreement is a business arrangement between airlines who cooperate to sell space on the same flight to manage capacity on shared routes. Third, A business alliance provides access to the unique know-how of the partner company. For example, a tutoring company might find itself challenged to meet the demand for math tutors within the community it services. By partnering with a computer software manufacturer, the tutoring company can release a software series of math tutoring lessons that assists a larger student population with its math services. Finally, Economies of scale might develop from business alliances. Economies of scale relates to the cost advantages that a company gains from expansion. In business alliances, this might include access to wider marketing channels, which a company might not otherwise be able to afford outside the partnership. Costs reductions might also result from joint investments on matters like research and development, or access to a partner's operational facilities.
However, everything has pros and cons. The strong alliance can break down if one of two company make some bad strategic. First, Depending on the alliance you enter into, a business partner can take advantage of you by not fulfilling its end of the bargain; stealing from you if it has access to your property, materials or computers; or stealing or revealing trade secrets. Before you propose or enter into any alliance, list all of the worst possible outcomes, ranging from partner mistakes to outright acts of malfeasance. Look at ways of preventing any such situations to determine if you can safely form the alliance. Even if you have a positive history with a potential partner, calculate the effects of a problem on your business and determine if you can recover from it. Remember, every terrible divorce starts with a hopeful wedding day. Second, If you form a public alliance with another business, the other business's bad public relations can damage your reputation. Even if your partner fulfills all of its obligations to you and faithfully promotes your business, it might still be involved in other acts of bad faith that might stain your company if you are linked to the partner in newspaper, trade magazine, broadcast or Internet articles. If this happens, begin a PR campaign of your own to immediately distance yourself from the partner. Third, In the event of a lawsuit, plaintiffs often sue everyone involved with an incident, letting the court decide who might be responsible. For example, if you donate the use of a sports facility for a charity tournament and the organizer runs off with the money, participants or sponsors might include you in a lawsuit. If you share office space with another company and an employee of that company does not properly secure or maintain common areas of the building, your company might be included in an injury or negligence suit. You might also be named as a partner in a suit that seeks to recover products or services not delivered or funds stolen from a business by your partner.
Project Future Trends
The new technological innovations that Intel came out with this past year allowed Intel to reach highs never before seen in March. The reason Intel is seeing all-time highs in revenue is the fact that they keep creating new innovations in micro-chips. The more chips created to put on the processors, the faster the computer will work and the more information the computer can hold. Customers see that Intel comes out with new and faster computers, and they are attracted to purchase their line of computers rather than other brands. So, the trend in the future seems to be that the brands of computers that have the best technology are the ones customers tend to buy more of.
A major trend that Intel needs to go through is increasing the number of transistors that they place on each micro-chip. According to Moore’s Law, Intel wants to double the number of transistors on each chip, but what if they triple the number of transistors. Not only will they increase the technology of their devices, but they will put the competition to shame. The more changes to technology that Intel does for the better, the more space they put between them and their competition.
As for the implementation of these technological changes, Intel places itself in a whole new market. That market is the speed at which the processors can deal with information at one time. Other companies that are in the micro-processor field do not have quickness in which Intel has to process information. The average speed of Intel’s microprocessor is 1.3 seconds for 300 megabytes. The closest competition comes in a far second at 3.2 seconds. So, one can see that Intel has placed itself in a completely different market than it’s’ competition.
Five years down the road, every company wants to increase in revenue, efficiency, and effectiveness. But Intel wants something different. I spoke with the Southeastern regional manager of Intel, Terry Triplett. Terry Triplett said, “It is very simple. We want Intel to become a household name for micro-chip processors.” After speaking with him, I realized that what Intel wants is when customers want a computer they demand a computer with an Intel processor. Intel is the number one producer in micro-chip processors. Nothing will get in their way as long as Intel remembers what got them to the successful level they are at right now. The best thing for Intel to do for the future is to keep coming up with technological innovations and stay ahead of their competition