A Presentation by:Thomas Hutcheson, Kristina Giamportone , Stevie Kindler, Brittney McQuesten,

and Kevin Jones

Introduction

• Founded by Robert Noyce and Gordon Moore in 1968.

• Largest semiconductor chip manufacturer in the world.

• Manufacturing plants found all over the world.

Industry Overview

• Industry started in 1960 and is one of the most prominent in the world.

• $249 billion dollar industry in revenue.• Represents 10% of the worlds GDP alone.• Growth rate of 13% in the past 20 years.

Industry Analysis

• Crashed in the 2008 economic crisis btu recovered fully by 2010.

• Moore’s law is a primary limiting factor.• Cyclical supply and demand.• Cost structures include large fixed costs.

Porter’s Five ForcesCompetitive Rivalry

• Top 5 companies have been in the same positions for 5 years.

• Each control different market segments.• Barriers for crossing into other markets are

extremely high.

Threat of Entrants

• One of the most expensive start up costs.• Manufacturing plants can cost over 1$ billion.• Technology changes yearly.• Human capital is required, with high amounts

of skilled labor.• Government regulations.

Bargaining Power of Buyers

• Buyers have a high degree of power.• Chips are purchased in large volumes or bulk

orders.• Relationships are formed between

manufacturers and purchasers.• Bargaining price can be influenced heavily to

ensure partnerships are kept.

Bargaining Power of Supplier

• Suppliers do not have much power.• With such few semiconductor manufacturers,

price has to remain competitive from suppliers.

• Suppliers have to be able to maintain high demand for supplies in random spurts.

Substitute Products or Services

• No substitutes are available outside of the current competitors within the industry.

• Fake chips are currently being produced overseas.

• New materials are trying to be developed as substitutes.

Future Competitive Moves

• Innovation is an ongoing process in this industry.

• Being the first to develop new technologies wins the market segment.

• Intel is trying to break through into the mobile device market.

Intel’s Key Success Factors

• Strategy – retaining skilled labor force• Process – Manufacturing chips and

transitioning manufacturing plants with new technologies.

• Technical – Control and manage data for current technologies that are utilized. Helps innovate.

SWOT AnalysisStrengths

• Recognized global brand.• Advanced technology.• First Microprocessor.• Controls 80% of the market segment.• Constant innovation.• Large partnerships.

Weaknesses

• Strategy based on competitors.

• Large ego.

• Ignoring open market segments.

Opportunities

• Make innovations based on customer preference.

• Break into the mobile device market.• Development of new products.• Reduce fixed and variable costs.

Threats

• Changes in overseas currency.• Rapid pace of the industry.• Rebuilding FABS.• Changing customer preference.

Potential Growth

• The semiconductor industry's average growth rate is highly stable with a annual growth rate of 12.95%. However the monthly growth rate experiences periods of rapid growth and decline such as last month were the monthly growth rate was -45.46%. This is in a large part due to new products coming available in the coming months and a shrinking of soon to be outmoded inventory

Barrier to Entry

• Intel has high security in its industry it would be extremely difficult if not impossible for firms to enter their market. Over Intel’s 45 years in the microprocessor industry they have built a stalwart reputation as the premier chipmaker in the semiconductor industry. This combination of a history of innovation and internal skill make Intel a company that could not be easily replicated. Further they have invested heavily into research and manufacturing process, these investments have kept them at the front of their industry.

Competition Among firms

• Intel is in a highly competitive industry, they benefit from being one of the largest entities in their industry, which gives them considerable leverage over their suppliers and consumers. This leverage makes it extremely difficult for any entity to compete on their level. They are able to keep their prominence in the industry because of the continued reinvestment in their manufacturing and research arms of their business.

product substitutability

• Intel’s products could be easily substituted if a competitor could manufacture a more advanced chip for cheaper. However, they have managed to keep at the forefront of the industry keeping a virtual monopoly on the PC processor industry. Their history of success makes it highly unlikely that someone would be able to make a competitive substitute on the level, quality, and quantity and tell is capable of producing.

Dependency on other products and services

• Intel is highly dependent on complimentary and supporting products because Intel is a part of a larger supply chain of the computer industry. However because of the size they make most of their suppliers and purchasers dependent on them because their abilities are not easily reproduced.

Political Factors Within Industry

• Increased regulation of chemicals used within Industry

• Environmental obstacles• Patents, copyright, trade secrets• Workers Safety

Intel and Political Factors

• Monitoring Chemicals• Looking for ways to reduce water use• Lawsuits with patent infringement

Economic Factors within Industry

• Concerns with World Economy• Moore’s Law• Taxes at home and abroad

Intel and Economic Factors

• How the World’s economic state is affecting Intel

• How PC’s are being replaced• Intel getting into new industries to grow

profits

Social Factors within Industry

• Consumers are dependent on technology• Shift in social norms• Corporate Corruption• Focus on Corporate Social Responsibility

Intel and Social Factors

• Intel is trying to create newest and best technology

• What Intel is doing about Corporate Social Responsibility

Technological Factors within Industry

• Competitive industry• Research and Development

Intel and Technological Factors

• Research and Development• ZTE smart phones• Foreign Investments

Competitive Factors within Industry

• Highly competitive• Research and Development programs

Geographic Industry Factors

• Access to water• Shift in location of companies

Categorizing the Objectives and Strategies of Competitors

• Intel’s competitor: Samsung Electronics

• Offense Approach: It is necessary for Intel to understand their competitors objectives and strategies.

• 5 Key Components: Competitive Scope, Strategic Intent, Market Share Objectuve, Competitive Position/Situation, Strategic Posture, Competitive Strategy

Competitive Scope

• Intel and Samsung are both Global Companies

• Samsung was calculated by Forbes to be the 20th largest public, global corporation-Intel was ranked 77th

• Both companies consider themselves to be the leader in global electronics

Strategic Intent

• Samsung and Intel both consider themselves to be and intend to be the leader in the memory industry

• Intel should be aware of Samsung’s Strategic Intent since it is the same as theirs

Market Share Objective

• Aggressive Expansion Strategy• via both acquisitions and internal growth

• Samsung acquired Nokia

• Intel acquired McAfee

Competitive Position/Situation

• Both companies are well established in the memory Industry

• Innovation is essential

• Quality is necessary

Strategic Posture

• Ever-changing industry

• Offensive Strategy: updating technology, introducing new products, larger processors

• Defensive Strategy: must always catch up to the new and successful product

Competitive Strategy

• Differentiation through technological superiority

• New and innovative products

• Research and Development– Samsung spend more thena $6 Billion a year

Strategic Position and Action Evaluation (SPACE)

• Intel takes an Aggressive Posture

• 22-Nanometer Process

• Windows 8

Weighted Competitive Strength Assessment:

• How Important are the Strengths?

• How Important are the Weaknesses?

• What is the cost of not responding?

Organizational Life CycleGrowth Stage–Business concept– Formation of business plans that obtain

funding–Begins operations, establishes and expands

customer base–New competitors may enter the market place–Demand for product begins to level off– Intel begins to mature

Organizational Life CycleMature Stage• Pricing becomes more competitive • New opportunities for existing products need

to be recognized• Re-enter the growth stage • Maximizing Value While Remaining Mature

Organizational Life Cycle

Decline Stage• Intel has not reached the decline stage

because of their ability to change, re-invent itself and re-grow

• Intel is dependent on the effectiveness of its leadership adopting sound values, strategies, and creating an aligned, empowered organization

Executive Office

Andy D. Bryant-Chairman of the Board

Executive Vice President

William M. Holt-GM, Technology and

Manufacturing Group

Renée J. James-GM, Software and Services

Group

Thomas M. Kilroy-GM, Sales and Marketing

Group

Brian M. Krzanich-Chief Operating Officer

Senior Vice President

Sohail U. Ahmed-Director, Logic

Technology Development

Dian M. Bryant-GM Datacenter and

Connected Systems Group

Shmuel Eden-President, Intel Israel

A. Douglas Melamed-General Counsel

Vice President

Michael A. Bell-GM, Mobile and

Communications Group

Rani N. Borkar-GM, Intel Architecture

Development Group

Robert E. Bruck-GM, Technology

Manufacturing Engineering

Christopher J. Bruno-President. Intel Americas Inc.

Jonathan Khazman-GM, Visual and Parallel

Computing Group

Cary I. Klafter-Legal & Corporate Affairs, Director, Corporate Legal Corporate

Secretary

Michael C. Mayberry-Director, Components

Research

Christian Morales-GM, Europe, Middle East,

Africa

Babak Sabi-Director, Assembly and Test

Technology Department

Sunil R. Shenoy-GM Visual and Parallel Computing Group

Stephen L. Smith-Director, Tablet Development

Kimberly S. Stevenson-Chief Information

Officer, Information Technology

Douglas L. Davis-GM, Arizona

Fab/Manufacturing site

Hemann Eul-GM, Mobile

Communications group

Douglas W. Fisher-GM, Systems Software

Division

Ron Friedman-GM, Intel Architecture

Development Group

Erik Huggers-GM, Intel Media Ravi Jacob-Treasurer

Joshua M. Walden-GM, Chief Operating

Officer Strategy Office

Xu Yang-President, Intel China

Stuart C. Pann-General Manager, Business

Manager Group

Gregory R. Pearson-World Wide Sales and

Operations Group

Justin R. Rather-Director, Intel Labs, Intel Chief Technology Officer, Intel Senior Fellow

Deborah S. Conrad-Chief Marketing Officer

Robert B. Crooke-GM, Non-Volatile Memory

Solutions Group

Leslie S. Culbertson-Director, Finance

Patricia Murray-Director, Leadership

Strategy

Kirk B. Skaugen-GM, PC Client Group

Richard G. A. Taylor-Director, Human

Resources

David Perlmutter-GM, Intel Architecture

Group, Chief Product Officer

Stacy J. Smith-Chief Financial Officer and Director, Corporate

Strategy

Arvind Sodhani-President, Intel Capital

Paul S. Otellini-President and Chief

Executive Officer

Intel’s Organizational Chart

Assessment of Cultural ElementsNoyce, Moore, and Grove are the forces behind

Intel

Assessment of Cultural Elements• Executive’s style–Mentoring Program– It’s about what you want to know, not

who you know• Recognition of Individual–Awards and Honors

• Enforcement of Policies–Works with governments, organizations,

and industries all around the world to enforces policies that encourage new ideas and protect resources

Assessment of Cultural Elements• Degree of Innovation– Intel is a developer of the hardware at the heart of

the modern PC• Culture and Climate of Organization– Values initiative, risk taking, and confrontation of

ideas• Sense of Belonging to the Community– Support local schools, non profits, and educational

math and science based programs all over the globe• Maturity of Organization– Intel only continues to grow in size, securing more

jobs all around the world