Intel

Intel’s Operations Management Strategy: 10
Decisions, Productivity
UPDATED ONUPDATED ON APRIL 22, 2017 BY JESSICA LOMBARDO
An Intel Micro-PGA2
CPU socket. Intel Corporation’s operations management strategy applies automation to
optimize productivity in the 10 strategic decision areas of the semiconductor business.
(Photo: Public Domain)
Intel Corporation’s operations management (OM) strategy focuses on supporting
product development as the basic factor in the 10 strategic decision areas. Operations
managers deal with these 10 strategic decisions for the purpose of optimizing
organizational processes and productivity. As a leading semiconductor business, Intel
already maintains optimized operations that suit strategic objectives. The company’s
efficient semiconductor fabrication processes are an indicator of operations
management success. A testament to this operational success is Intel’s attractiveness
as one of the major global fabricators of chips for other firms. However, the company
needs to continue evolving to address rapid market changes associated with rapid
technological advancement and obsolescence. This need highlights the importance of
successful operations management to support Intel’s product development objectives
via the 10 strategic decision areas. While the company has high productivity, changes in
market conditions impose challenges that require adjustments in operational
approaches. Intel’s operations management implements these adjustments through
computer-assisted decision-making processes.
Operations management needs in its global semiconductor business pushes Intel to find
new ways to optimize efficiency and productivity. As a technology business, the
company takes advantage of its technology savvy human resources to successfully
maintain automation to support operations managers’ activities. Through these efforts
and a constant monitoring of the global market, Intel remains effective in the 10
strategic decision areas. Such effectiveness depicts continuous success and long-term
leadership in the industry.
Intel Corporation’s Operations Management, 10

Decision Areas
1. Design of Goods and Services. Intel’s mission statement and vision
statement guide operations management decision-making in this strategic decision
area. The company’s objective in this area is to produce profitable and excellent output
that satisfies market demand. For example, Intel’s corporate vision and mission
emphasize leadership in bringing semiconductor products to every customer around the
world. This aim is achieved through microprocessors and other products designed with
cutting-edge technologies and distributed globally. Intel’s operations management
supports these activities through cost minimization and resource planning to optimize
the impact of product designs on organizational stability.
2. Quality Management. The determination and satisfaction of quality expectations are

the objectives in this strategic decision area. Intel’s operations managers evaluate
quality expectations through market research and feedback from customers, sellers and
distributors, among others. The data is used as basis for implementing adjustments in
operational policies. For example, to address concerns regarding defects, adjustments
are made in Intel’s operations management policy on margins of error. Such action
supports optimal productivity while addressing quality issues. Operations management
effectiveness in this strategic decision area aligns with Intel’s generic strategy and
intensive growth strategies.
3. Process and Capacity Design. Operations managers’ objective in this strategic

decision area is to maintain processes through standards compliance and resource
adequacy to support productivity goals. In the case of Intel Corporation, such goals are
achieved through process automation. As part of the company’s operations
management, reviews are regularly conducted on available technologies and related
resources to determine capacity statuses and requirements. For example, operational
capacity levels are evaluated to develop corresponding solutions to optimize Intel’s
operational productivity in its microprocessor fabrication plants. These operations
management efforts ensure high-efficiency processes and advantageous economies of
scale, which are among the strengths highlighted in the SWOT analysis of Intel
Corporation.
4. Location Strategy. Cost-optimal distances from target markets, suppliers and

resources are the objectives in this strategic decision area of operations management.
Intel’s approach to achieve these objectives focuses on human resources and logistics.
For example, the company prioritizes access to talent necessary to maintain the
competitive advantage of its semiconductor business. Nonetheless, to complement this
situation, sellers and Intel Store locations are optimized for maximum reach in target
markets. These locations are included in Intel’s marketing mix or 4Ps. The approach
ensures the company’s operations management effectiveness in this strategic decision
area.
5. Layout Design and Strategy. Intel aims to maximize efficiency of the flow of
resources and information to address this strategic decision area. Through such
maximization, the company’s operations management supports high productivity. Intel
fulfills this aim by using office layouts that facilitate efficient work and creativity. For
example, the company’s office layouts make it easy for employees to meet and share
creative ideas for new product development. Also, many characteristics of layouts,
including processor fabrication plant layouts, are based on Intel’s organizational
structure. Any new product line requires new spaces, layouts, and corresponding
components in the corporate structure. This approach shows that Intel’s operations
management in this strategic decision area is flexible to accommodate changes linked
to business growth and expansion.
6. Job Design and Human Resources. In this strategic decision area, the main
objective is to maintain adequate human resources to support operational efficiency and
productivity goals. Intel satisfies this objective through an operations management
approach that primarily involves human resource management. For example, the HR
strategy involves job designs that support Intel’s organizational culture, which
emphasizes discipline, results orientation, and other factors. Also, the company has
productivity enhancement measures, such as leadership development programs and
seminars for better employee output. Thus, Intel’s operations management addresses
the aims in this strategic decision area.
7. Supply Chain Management. A high-efficiency and adequate supply chain is the

objective in this strategic decision area of operations management. In Intel’s case,
supply chain is automated to maximize efficiency. For example, the company has
computer systems and databases for monitoring and determining areas that need
immediate adjustment. In addition, Intel’s operations management efforts influence
suppliers through policies that extend to their business activities. For instance, the
company develops and implements policies to improve the sustainability and
environmental impact of the entire supply chain, inclusive of suppliers and other
relevant organizations. These operations management efforts are part of Intel’s
corporate social responsibility strategy. These efforts are also partly responsible for the
company’s high operational productivity and economies of scale that contribute to Intel’s
competitive advantage in the semiconductor industry.
8. Inventory Management. Intel’s operations managers are concerned with inventory

holding and ordering to support business productivity goals. The objective is to ensure
that the inventory satisfies capacity requirements alongside market demand. Intel’s
operations management approach for this strategic decision area involves a serialized
inventory and the “first in, first out” (FIFO) method. For example, the FIFO method
addresses issues with technological obsolescence, especially with regard to
intermediate products in semiconductor fabrication processes. Correspondingly,
serialization allows Intel to track every item in its inventory. The resulting combination
ensures the company’s efficiency and effectiveness in satisfying changes in market
demand. This operations management approach supports increasing R&D investment,
which is a significant technological external factor (Read: PESTEL/PESTLE Analysis of
Intel Corporation).
9. Scheduling. In operations management, the objective in this strategic decision area

is to establish short-term and intermediate schedules that satisfy market demand. An
appropriate approach in Intel’s case involves short-term schedules for immediate
concerns and generalized schedules for regular processes. For example, the company
uses short-term schedules for microprocessor fabrication processes involving batches
or projects. On the other hand, generalized schedules are for regular processes like
equipment maintenance and product development iteration. This approach ensures that
Intel’s operations management and productivity efforts satisfy dynamic needs and
relatively steady needs in the semiconductor business.
10. Maintenance. Process stability and reliability are the objectives in this strategic
decision area of operations management. Intel has a multi-pronged approach to ensure
effective solutions for these concerns. For example, operations managers coordinate
with HR management teams to maintain an adequate workforce. In addition, Intel
supports high operational productivity by maintaining cutting-edge technologies, such as
equipment used to fabricate semiconductor chips. Another operations management
approach involves high R&D investment to maintain technological competitive
advantage, which addresses the external force of competitive rivalry (Read: Porter’s
Five Forces Analysis of Intel Corporation).
Productivity at Intel
Considering its global business and a growing product mix, Intel Corporation uses
various sets of measures or criteria for evaluating productivity. Some of these criteria
refer directly to individual employee output, while others measure group or
organizational productivity to guide operations management decision-making. The
following are some of the quantitative productivity criteria applicable at Intel:
1. Batches produced per day (Fabrication productivity)

2. Problem tickets processed per day (Customer service productivity)
3. Units delivered per month (Distribution productivity)
4. Units sold per month (Intel Shop productivity)
Intel’s Corporate Social Responsibility
Strategy & Stakeholders
UPDATED ONUPDATED ON APRIL 22, 2017 BY JESSICA LOMBARDO
Intel Galileo
Developer Board. Intel Corporation’s corporate social responsibility (CSR) strategy is
comprehensive but needs improvement to satisfy all major stakeholders’ interests in the
semiconductor business. (Photo: Public Domain)
Intel Corporation employs its corporate social responsibility (CSR) strategy to support its
business. In Archie Carroll’s theory of corporate social responsibility, business
organizations are responsible for addressing their social impacts on stakeholders.
These stakeholders include individuals, groups, or organizations that the business
influences. Corporate responsibility is important to companies because of the effects of
stakeholders on business performance, through such factors as customer perception
and brand loyalty. In the case of Intel, corporate responsibilities are addressed through
a variety of initiatives or programs. In part, the company fulfills its corporate citizenship
through the Intel Foundation. The Intel Foundation serves as the primary body through
which the company reaches out to some stakeholders and implements corporate social
responsibility programs to satisfy stakeholders’ interests. As a leading firm in the
semiconductor industry, Intel needs to ensure the satisfaction of these interests. A
positive relationship with stakeholders optimizes the company’s business performance
by supporting brand awareness and customer loyalty. Intel responds to social and
market factors to adjust its corporate social responsibility strategy to ensure the CSR
strategy’s long-term effectiveness in supporting business performance.
Stakeholders impose significant pressure on Intel to satisfy leadership expectations, not

just in financial performance, but also in other aspects of the business. For example, the
company experiences such pressure in terms of sustainability to address business
impact on communities. Intel needs to consider these facets of its semiconductor
business for a comprehensive and successful corporate social responsibility strategy.
Intel’s Stakeholder Groups & CSR Initiatives

Stakeholder groups have different interests and concerns that have varying effects on
Intel’s organization, market performance, and financial stability. For example, one
stakeholder group’s demands may be more important to the company’s CSR strategy
than the demands of other stakeholder groups. This condition is so because
stakeholders have disparate effects on Intel, especially in terms of revenues and
financial performance, as well as brand image, consumer perception and product
competitiveness. As such, the company’s corporate citizenship approach tends to
emphasize programs and initiatives for the stakeholders that have the most significant
business impact. Intel’s corporate social responsibility strategy prioritizes the main
stakeholder groups of the business in the following manner:
1. Customers (Top Priority)

2. Investors
3. Employees
4. Suppliers
5. Communities
Customers. Intel’s corporate social responsibility strategy gives the highest priority to
customers. This stakeholder group is interested in the quality and price of the
company’s products. Customers are significant because they affect Intel’s revenues and
profits and, thus, financial performance. To address such interests, the company has a
product stewardship goal that involves higher energy efficiency in products. This goal
aligns with Intel’s mission statement and vision statement. For example,
microprocessors with higher energy efficiency satisfy customers’ interests regarding
better products to address the cost of energy consumption and concerns regarding
battery charging. Also, as an initiative in its corporate responsibility efforts, Intel
Corporation continues to improve the sustainability and environmental impact of its
products. This initiative satisfies the stakeholder group’s concerns about the
environmental friendliness of the products. Thus, Intel’s corporate social responsibility
strategy supports the fulfillment of corporate citizenship by satisfying the interests of
customers as the most important stakeholders of the business.
Investors. Investors are significant stakeholders considered in Intel’s corporate social

responsibility strategy because they influence the availability of capital for and the value
of the semiconductor business. The main interest of these stakeholders is the growth
and profitability of the company. This interest is partly satisfied through the premium
pricing strategy in Intel’s marketing mix or 4Ps. For example, the company’s high prices
ensure correspondingly high profits that benefit investors. However, there are corporate
responsibility issues linked to the company’s dependence on its alliance with Microsoft.
Intel’s growth and profitability are significantly dependent on the sales of Windows
systems. In this regard, the company needs to improve its corporate social responsibility
activities to address this concern linked to the interests of investors as the second most
prioritized stakeholder group.
Employees. Intel Corporation values employees as a major stakeholder group in its

corporate social responsibility strategy. Employees are important because they directly
affect organizational performance, such as in terms of productivity. As stakeholders of
the semiconductor business, employees’ interests include job stability, career
development, and competitive compensation. These interests are addressed through
Intel’s human resource programs. For example, the company has HR programs that
support skills development and leadership training for career development. In addition,
as a major technology firm, Intel offers one of the most competitive compensation
packages in the semiconductor industry. Furthermore, to support employee
performance enhancement, the corporate social responsibility strategy involves suitable
training programs for high quality output, as included in Intel’s organizational culture.
These efforts reveal the company’s efforts to integrate the needs of these stakeholders
into the considerations for a comprehensive corporate social responsibility strategy.
Suppliers. Supply chain conditions determine Intel’s business capacity. Changes in

suppliers’ productivity can significantly affect the company’s production capacity. Thus,
Intel’s corporate social responsibility strategy must consider suppliers as a major
stakeholder group. These stakeholders are interested in profitable and growing
business with the company. Intel addresses this interest by auditing and supporting
enhancements in suppliers’ activities. For example, the company conducts on-site
audits of its biggest suppliers for the corporate citizenship purpose of developing a more
sustainable and more socially responsible supply chain. Through these audits, Intel’s
corporate responsibility efforts extend to suppliers and help them improve their CSR
standing and corporate image. This effect supports suppliers’ growth while the company
grows. Moreover, Intel’s operations management strategy facilitates supply chain
efficiency that helps streamline suppliers’ activities. These initiatives in Intel’s corporate
social responsibility strategy simultaneously support the company’s growth and the
stakeholder group’s growth.
Communities. Intel Corporation includes communities in its corporate social

responsibility strategy. As stakeholders, communities are significant because they affect
corporate image and consumer perception. The interests of these stakeholders include
Intel’s business sustainability and corporate support for community development. The
company satisfies these interests through the Intel Foundation and a variety of
corporate citizenship programs. For example, the Foundation gives grants for
organizations and programs that support community diversity, gender-equal leadership
development, and skills development among disadvantaged youth. Also, Intel has
programs expanding Internet accessibility around the world. In addition, the company’s
sustainability efforts minimize negative impact of the business on communities. These
programs and activities show that Intel’s corporate social responsibility strategy
effectively includes the interests of communities as a stakeholder group.
Intel Corporation’s CSR Performance in Addressing
Stakeholders’ Interests, Recommendations
Considering its corporate social responsibility strategy, Intel addresses most of the
interests and concerns of the stakeholder groups identified in this analysis. However,
the company can improve its CSR performance through additional initiatives or
programs, especially for the interests of investors. As noted in this analysis, Intel is
highly dependent on Microsoft Windows systems. This dependence is one of the
company’s weaknesses (Read: SWOT Analysis of Intel Corporation). It creates a barrier
to rapid business growth and expansion, making it difficult for the company to exploit
opportunities in the rapidly growing mobile device market, among other markets.
A recommendation is that Intel should develop new mutually beneficial alliances and
agreements with firms other than Microsoft. This action can reduce the risks associated
with the dependence on Windows systems. In addition, business diversification is
recommended for Intel to further improve market risk minimization efforts. For example,
the company can enter new industries through business creation or acquisition outside
the semiconductor industry. These steps can improve Intel’s corporate social
responsibility status, while supporting business growth and resilience.
Intel Corporation’s Marketing Mix (4Ps)

Analysis
UPDATED ONUPDATED ON APRIL 22, 2017 BY EDWARD FERGUSON
Intel Booth at the
2014 Embedded World trade fair showcasing embedded software and hardware, as
well as related technologies and conventions. Intel Corporation’s marketing mix (4Ps)
emphasizes premium branding and value of its semiconductor products. (Photo: Public
Domain)
Intel Corporation is a leading semiconductor firm that applies a marketing mix that is
heavily focused on advertising and public relations to promote premium-priced
technological products. The marketing mix, also known as the 4Ps (Product, Place,
Promotion, and Price), is the combination of strategies, tactics and tools used to support
a firm’s goals in selling its products in certain target markets. Intel’s marketing mix is
common among technology firms, especially because of the emphasis on advertising
and the use of the premium pricing strategy. The company strategically applies this
marketing mix as a way of ensuring that end-users continue buying its equipment, or
equipment manufacturers’ products that contain Intel technologies, such as laptops that
have Intel microprocessors. An effective marketing mix facilitates business resilience
and long-term success by supporting competitiveness and efficiency in marketing. In
this regard, it is essential that Intel continue to monitor the appropriateness of its
marketing mix relative to the conditions of the semiconductor industry and target
markets around the world.
In using a marketing mix (4Ps) for technology products and markets, Intel Corporation
applies advertising as a way to attract end-users and equipment developers and
designers. Considering the variety of products available from the company, the
marketing mix also involves a corresponding variety of potential places or venues for
distribution. In this way, Intel ensures that target customers and end-users are
effectively reached.
Intel’s Products (Product Mix)
This aspect of the marketing mix identifies the organizational output or products,
inclusive of goods and services. As a semiconductor firm, Intel is popularly known for its
microprocessors. However, the company also has other products, such as memory
chips and computing devices. This product mix is a showcase of the company’s growth
and expansion through the years. For example, as the company grows, new product
lines like wireless technology are added to the product mix. Products are grouped in
Intel’s product mix, as follows:
1. Devices & Systems

2. Processors
3. Boards & Kits
4. Chipsets
5. Solid State Drives
6. Server Products
7. Networking & Communications
8. Wireless
9. Software & Services
10. Intel Gateways
11. FPGAs
12. Technologies (Solutions)
The company’s devices and systems include cable modems and the Intel Compute
Card. Different types of processors are available under the Processors product line. For
example, these processors include Intel Core, Xeon, and Atom. The other product lines
contain a wide variety of products. Some of the product lines include equipment
manufacturers’ goods that contain the company’s products, such as laptops with Intel
processors. These product lines show that the company has more products than the
brand’s typical association with microprocessors. It is expectable that Intel will add new
product lines as it continues to seek new revenue streams and enter new markets or
market segments. Any new product line could correspond to changes in the company’s
organizational structure (Read: Analysis of Intel’s Organizational Structure for
Innovation). Such new product line would also reflect the situation of the company and
the global market for semiconductors. Based on this aspect of Intel’s marketing mix,
product development and strategic alliances mark the company’s organizational
progress.
Place/Distribution in Intel’s Marketing Mix

The places or venues where Intel reaches and transacts with target customers are
identified in this aspect of the marketing mix. These transactions define the distribution
strategy and distribution network of the business. The company uses the following
venues to reach its target market:
1. Intel Shop
2. IT resellers
3. Authorized sellers of embedded products
Intel Shop is the most direct venue for the distribution and sale of the company’s
products. For example, the company maintains Intel Shop as part of its official website.
In addition, there are physical Intel Shop locations in key areas around the world. On
the other hand, the company has arrangements with IT resellers, such as retailers of
parts and accessories. The authorized sellers of embedded products include sellers of
computer systems that use Intel microprocessors and boards, among others. This
combination of places/venues helps the company in maximizing its global market reach
to distribute and sell its products. Through this aspect of its marketing mix, the company
effectively applies market penetration as one of its intensive strategies for growth
(Read: Intel’s Generic Strategy & Intensive Growth Strategies).
Intel Corporation’s Promotion (Promotional Mix)

This aspect of the marketing mix deals with the strategies and tactics that the company
uses to promote its products. Intel promotes its products to consumers or end-users of
computing technologies, and to direct customers, who are mostly manufacturers of
laptops, desktops and related products. Promotion is a significant factor that determines
a firm’s ability to maintain or grow its revenues despite competitive rivalry. Intel’s
promotional mix involves the following promotion activities:
1. Advertising
2. Public Relations
3. Direct Marketing
Advertisements are an expensive but effective promotion activity that the company uses
to boost the sales of its products and equipment manufacturers’ products containing
Intel processors and boards. For example, through the “Intel Inside” advertising
campaign that was launched in the 1990s, the company was able to successfully boost
consumer awareness and loyalty to Intel products. The company also implements other
advertisements, such as the one it used for the 2017 Super Bowl. Public relations are
also a significant promotional strategy. For example, the company sponsors special
events, such as science fairs for high schools. Such sponsorship supports brand
awareness and customer loyalty. These public relations programs are also part of
efforts to address corporate social responsibilities (Read: Intel’s Corporate Social
Responsibility Strategy & Stakeholders). Moreover, the company promotes its products
through direct marketing. The company engages in direct communications with
equipment manufacturers and sellers to reach profitable arrangements. This aspect of
Intel’s marketing mix indicates considerably equal significance of advertising, public
relations, and direct marketing in supporting the company’s promotional objectives.
Intel’s Prices and Pricing Strategies

Price points and ranges are considered in this aspect of the marketing mix. Intel’s prices
are based on evaluations of market conditions, as well as the overall competitive
advantage of the company relative to other firms in the semiconductor market. Intel has
the following pricing strategies:
1. Premium Pricing Strategy

2. Market-oriented Pricing Strategy
Intel Corporation uses the premium pricing strategy to maximize its profits. In this
strategy, the company’s prices are relatively higher than those of competitors, such as
AMD. The advantage of this pricing strategy is that it maximizes the profit margin. A
main disadvantage is that it is difficult to implement and could fail in a price-sensitive
market. Intel succeeds in using this pricing strategy by maintaining a premium brand
with a corresponding high perceived value, based on the perceptions of target
consumers. For example, the company advertises its brand and products as leaders in
the semiconductor industry. In doing so, consumers maintain the perception that Intel
products are better than the competition. This condition enables the company to sell its
products at higher prices and expect growing revenues despite cheaper products from
competitors. On the other hand, the market-oriented pricing strategy involves
determining market conditions and the prices of competitors. Intel uses this pricing
strategy to guide the adjustment of premium prices. The company continues to use the
premium pricing strategy as the main strategy for setting prices. Based on this aspect of
its marketing mix, Intel ensures high profits through premium prices, which are
supported through premium branding.
Intel Corporation PESTEL/PESTLE

Analysis & Recommendations
Intel i740 Onboard
Graphics with EP-BXT. A PESTEL/PESTLE analysis of Intel Corporation indicates
external factors that require strategic adjustments to exploit opportunities and
counteract threats in the remote or macro-environment of the semiconductor industry.
(Photo: Public Domain)
Intel Corporation ensures the long-term success of its semiconductor business by
addressing issues in its remote or macro-environment, such as the ones shown in this
PESTEL/PESTLE analysis of the company. The PESTEL/PESTLE Analysis allows
business decision-makers and investors to look into the external factors that affect the
firm and its remote or macro-environment. In this case, Intel’s business performance is
constantly under the influence of such external factors. The company must continually
develop and implement strategies that address these factors. As a leader in the
semiconductor industry, Intel has the resources and capacity to withstand the possible
threats from such external factors. Also, the company is in an industry position that
empowers it to effectively exploit opportunities in its remote or macro-environment.
Continuous evolution of strategies is needed to support Intel, especially when
considering the rapid rate of innovation in the global market for products that involve
microprocessors, such as laptops and smartphones.
A PESTEL/PESTLE analysis of Intel Corporation points to the changing characteristics

of the remote or macro-environment of the business. The changes are linked to the
dynamic nature of the global market for semiconductors, particularly markets for
computing system processors. The analysis shows that Intel faces a wide variety of
external factors that determine the conditions of the semiconductor market. Some of
these external factors highlight opportunities that the company must include in its
considerations for long-term strategic direction. Exploiting opportunities, especially new
ones, is critically important in Intel’s business, which faces issues in its dependence on
Windows systems (Read: SWOT Analysis of Intel Corporation).
Political Factors Affecting Intel’s Business

The remote or macro-environment of Intel Corporation is subject to changes or trends in
the political landscape. This aspect of the PESTEL/PESTLE Analysis accounts for the
effects of government activity on firms. In this case, the following political external
factors are significant in Intel’s business:
1. Continuing government support for globalization (opportunity & threat)

2. Improving intergovernmental action against monopoly (opportunity & threat)
3. Improving intergovernmental support for intellectual property protection (opportunity)
Government support for globalization presents an opportunity for Intel to expand its
business based on improving market conditions. However, this external factor also
creates the threat of increasing potential competition, as more foreign firms gain access
to the global market for semiconductors, especially microprocessors. On the other hand,
the improving intergovernmental action against monopoly facilitates Intel’s growth based
on the increasing number of firms that sell products like laptops and desktops. However,
the same external factor imposes the threat of potential increase in competition in the
semiconductor market. Nonetheless, Intel can benefit from the opportunities linked to
improved protection for its intellectual properties, as governments cooperate to develop
appropriate legal protections. For example, the company can expect enhanced
protection for its patents as it develops and fabricates new microprocessors. In this
aspect of the PESTEL/PESTLE analysis of Intel, strategic decision-making must
consider the notable threats in the remote or macro-environment.
Economic Factors Important to Intel Corporation

Intel’s revenues depend on the economic trends affecting markets around the world.
This aspect of the PESTEL/PESTLE Analysis deals with the influence of economic
changes on the firm’s remote or macro-environment. The following economic external
factors affect Intel’s semiconductor business:
1. Economic stability of developed markets (opportunity)

2. Rapid growth of developing markets (opportunity)
3. Rising disposable income (opportunity)
The majority of developed markets are relatively economically stable. This external
factor presents an opportunity for Intel Corporation to improve the revenues of its
semiconductor business. For example, the company has the opportunity to aggressively
enter new alliances in these markets to strengthen its competitiveness and increase its
market share. In relation, the external factor of the rapid growth of developing markets
creates opportunities to further improve business performance. For instance,
consumers in developing markets like those in Asia are increasing their purchase rates
of computing devices, many of which contain Intel processors. As a result, the company
can expect corresponding improvements in revenues from these markets. Furthermore,
there are opportunities based on the increasing levels of disposable incomes worldwide.
With high disposable incomes, consumers are more capable of purchasing new
computers that contain Intel microprocessors. It is notable that these effects of such
economic external factors are indirect, considering that the company’s direct customers
are equipment manufacturers, such as laptop manufacturers, and not the end-users of
computers (Read More: Porter’s Five Forces Analysis of Intel Corporation). This aspect
of the PESTEL/PESTLE analysis of Intel shows growth opportunities in the remote or
macro-environment of the semiconductor industry.
Social/Sociocultural Factors Influencing Intel’s

Business Environment
Social changes influence Intel’s business and its remote or macro-environment. The
effects of sociocultural trends or changes are considered in this aspect of the
PESTEL/PESTLE Analysis. In the case of Intel, the following sociocultural external
factors are significant in the semiconductor industry environment:
1. Improving wealth distribution (opportunity)

2. Rising attitudes favoring ecological products (opportunity & threat)
3. Increasing interactions via the Internet (opportunity & threat)
Improving wealth distribution is a social trend that increases the buying capacity of more
people. As a result, they are more capable of purchasing computing devices with Intel
processors. On the other hand, the rising attitudes favoring ecological products create
opportunity for the company to improve its products. For example, Intel can develop and
fabricate new microprocessors that have higher energy efficiency. Leaving this
sociocultural external factor unaddressed could threaten the company, as other firms
could develop competitive advantage based on the energy efficiency of their products.
The increasing level of interactions via the Internet is another consideration for Intel’s
strategic decision-making. This external factor creates opportunities for the company to
develop better products for online communications and network gaming. These efforts
should reflect Intel’s generic strategy and intensive growth strategies. For instance, the
company must highlight differentiation in developing products to ensure competitive
advantage. Based on this aspect of the PESTEL/PESTLE analysis of Intel Corporation,
there are significant threats and market opportunities in the remote or macro-
environment of the semiconductor industry.
Technological Factors in Intel’s Business

Intel’s progress depends on the technologies available in the remote or macro-
environment of the semiconductor industry. This aspect of the PESTEL/PESTLE
Analysis identifies the effects of technological trends and changes on firms and their
industries. The following technological external factors are important in Intel’s business:
1. Increasing adoption of mobile devices (threat & opportunity)

2. Rapid R&D investment rate (threat & opportunity)
3. High rate of technological obsolescence (opportunity)
The increasing adoption of mobile devices is a threat because Intel has insignificant
presence in the smartphone processor market. The company’s focus is primarily on
processors for desktop/laptop systems, especially Windows systems. Nonetheless, Intel
has an opportunity to develop competitive processors for mobile devices like
smartphones. This is a significant opportunity, considering the rapid growth of the
mobile device market. The rapid R&D investment rate threatens Intel in terms of
competitors’ increasing aggressiveness in product development. However, this
technological external factor also creates an opportunity for the company to increase its
R&D efforts to counteract competitive rivalry. For example, Intel can develop better
products to effectively compete in the desktop systems processor market and the
mobile device processor market. Furthermore, the company benefits from the high rate
of technological obsolescence, which compels consumers to buy more computing
devices as new models are frequently released to the market. This aspect of the
PESTEL/PESTLE analysis shows that Intel must improve its product development
strategy to exploit the opportunities identified in the remote or macro-environment.
Ecological/Environmental Factors
Ecological trends and changes influence the performance of Intel and the
semiconductor industry. The effects of the natural environment on the remote or macro-
environment of firms are determined in this aspect of the PESTEL/PESTLE Analysis.
The following are the ecological external factors significant in Intel’s business:
1. Increasing environmental contamination (threat & opportunity)

2. Rising interest in environmental programs (opportunity)
3. Rising emphasis on business sustainability (opportunity)
The increasing level of environmental contamination, especially due to electronic waste,

threatens Intel via the response of consumers. For example, this ecological external
factor discourages consumers from purchasing computers that use processors with low
energy efficiency. Inaction makes this factor a threat against Intel. However, the
company has taken appropriate steps by developing more energy-efficient processors,
in the process exploiting the opportunity to satisfy customers regarding this issue. In
relation, the rising interest in environmental programs opens opportunities for Intel to
improve its environmental strategy. Moreover, the rising emphasis on business
sustainability creates opportunities for Intel to enhance its sustainability status to satisfy
customers’ concerns (Read: Intel’s Corporate Social Responsibility Strategy &
Stakeholders). Based on this aspect of the PESTEL/PESTLE analysis of Intel, there is
considerable opportunity to improve the environmental impacts of the firm and address
related concerns in the remote or macro-environment of the business.
Legal Factors
Intel must comply with legal systems’ requirements for business. This aspect of the
PESTEL/PESTLE Analysis considers the influence of regulations on firms and their
remote or macro-environment. The following legal external factors shape the trajectory
of Intel’s business development:
1. Increasing competitive regulations (threat)

2. Improving international patent protection (opportunity)
3. Rising complexity of waste disposal regulations (threat & opportunity)
Intel Corporation experiences the threat of increasing competitive regulations. This legal
external factor is a threat because the company enjoys a virtual monopoly on Windows
systems. Competitors like AMD have considerable market shares but Intel has the
biggest market share. The company is also criticized for aggressive noncompetitive
arrangements with equipment manufacturers. On the other hand, improving
international patent protection presents opportunities in terms of protecting Intel’s
intellectual properties like the designs of its microprocessors. However, the rising
complexity of waste disposal regulations around the world threatens the company
because of their implications on how e-waste is addressed. For example, these
regulations impose pressure on Intel’s designs and efforts to address product end-of-life
concerns. Still, the company has an opportunity to continue enhancing these efforts to
ensure regulatory compliance. This aspect of the PESTEL/PESTLE analysis identifies
considerable regulatory threats along with opportunities for Intel to improve its business
resilience amid challenges in the remote or macro-environment.
Intel Corporation’s PESTEL/PESTLE Analysis –

Recommendations
This PESTEL/PESTLE analysis of Intel outlines key opportunities and threats in the
remote or macro-environment of the semiconductor industry. While the company is in a
strong position, addressing these external factors builds competitive advantage and
long-term business resilience. A recommendation is that Intel should enter new
alliances with mobile device manufacturers, in addition to the one it has with Microsoft.
Such alliances can help address the external factor of the increasing adoption of mobile
devices, especially smartphones. It is also recommended that Intel should continue its
efforts to capture a dominant share of the smartphone processor market. For example,
improved mobile processor designs can increase the company’s share in this market.
Other recommendations include improving business sustainability and the
environmental friendliness of Intel’s products.
Intel Corporation Five Forces Analysis

(Porter’s) & Recommendations
Pentium 4 (2.4
GHz). A Porter’s Five Forces Analysis of Intel Corporation reveals competition and new
entry as the most significant, based on external factors in the semiconductor industry
environment. (Photo: Public Domain)
Intel Corporation is a leading semiconductor firm that strategically addresses the issues
raised in its Five Forces analysis. Michael Porter’s Five Forces Analysis model is a
strategic decision-making tool that evaluates the strengths or intensities of the external
factors in a firm’s industry environment. These external factors are responsible for the
condition of the competitive landscape. In Intel’s case, the external factors in the global
semiconductor industry environment define strategic options. The company uses these
strategic options to succeed in selling its microprocessors and other technological
products. Facing tough competition, Intel must ensure its competitive advantage.
Stronger competitive advantage is needed. In addition, Intel must continue enhancing
its competitiveness, considering the rapid advancement of computing technologies in
the market. Upon understanding the bases of the five forces indicated in this analysis,
the company can develop appropriate solutions to address issues in its business
environment. These solutions must support the long-term dominance of Intel in the
semiconductor industry.
A Porter’s Five Forces analysis of Intel Corporation shows the intensities of the five
forces in the semiconductor industry environment. Accordingly, the company must
develop strategic plans that prioritize the strongest of these forces. Nonetheless,
addressing all of the external factors identified in the analysis maximizes Intel’s
competence and resilience. These external factors determine the extent of influence
that the five forces have on the business organization.
Summary & Recommendations: Intel’s Five Forces

Analysis
This Five Forces analysis (Porter’s model) of Intel Corporation shows the most
significant external factors that contribute to the intensities of the five forces affecting
the company’s industry environment. In this case, the strongest of the five forces are
competitive rivalry and the threat of new entrants. Intel must prioritize these two forces
in strategy formulation. However, the other forces are also significant factors in the long
term. The following are the intensities of the five forces determined in this analysis of
Intel’s business environment:
1. Competitive rivalry or competition (moderate force)

2. Bargaining power of buyers or customers (weak force)
3. Bargaining power of suppliers (weak force)
4. Threat of substitutes or substitution (weak force)
5. Threat of new entrants or new entry (moderate force)
Recommendations. Based on the results of this Porter’s Five Forces Analysis, Intel
needs to develop appropriate competitive advantage to address the most significant
forces affecting the business and its industry environment. An improvement in overall
competitive advantage enables the company to deal with competition and the threat of
new entrants. A recommendation to enhance Intel’s competitive advantage is to
continue its rapid innovation strategy, which is at the core of the firm’s competence in
providing cutting-edge microprocessors (Read: Intel’s Generic Strategy & Intensive
Growth Strategies). Also, it is recommended that the company must find new alliances
in addition to the one it already has with Microsoft. The new alliances should enable
Intel to open new opportunities for its processors and other products. For example, an
alliance with a smart home appliance manufacturer can create new revenue streams for
the company, thereby reducing dependence on Windows systems. While competition
and the threat of new entry are the forces with the highest intensities determined in this
Five Forces analysis, Intel must develop strategies to remain resilient in the face of the
other forces. For instance, market diversification can address the external factors that
create the weak but significant force of the bargaining power of Intel’s customers.
Competitive Rivalry or Competition with Intel

Corporation (Moderate Force)
Intel’s market performance depends on the level of competitive rivalry. This aspect of
the Five Forces Analysis determines how other firms affect the company. In Intel’s
industry environment, the following external factors and their intensities are responsible
for the moderate force of competitive rivalry:
 Moderate aggressiveness of firms (moderate force)

 Moderate market growth rate (moderate force)
 High switching costs (weak force)
The moderate aggressiveness of firms creates a moderate force on Intel’s industry

environment. Even though the company is highly aggressive, especially in fighting
competitors in legal battles, these rivals are only moderately aggressive because of
their limited capabilities compared to Intel’s economies of scale, which is a major
strength (Read: SWOT Analysis of Intel Corporation). In addition, the moderate market
growth rate imposes limits on the level of competition. Moreover, the effects of
competition are only of moderate intensity because of high switching costs. For
example, it is difficult for customers like laptop manufacturers to switch from Intel’s
processors to other processors, such as those from AMD, because doing so requires
significant costs in design change, as well as a potential decline in sales. Based on the
external factors in this aspect of the Five Forces analysis of Intel, competitive rivalry is a
major factor to consider in strategy formulation.
Bargaining Power of Intel’s Customers/Buyers (Weak

Force)
Customers determine the sales volume and profits of Intel’s operations in the
semiconductor industry environment. This aspect of the Five Forces Analysis deals with
the influence of buyers or consumers. The weak force of the bargaining power of Intel’s
customers are based on the following external factors and their intensities:

 Low substitute availability (weak force)
 Low backward integration of customers (weak force)
The high switching costs make it difficult for customers like desktop manufacturers to
move from Intel to other microprocessor manufacturers. This external factor weakens
the bargaining power of customers. On the other hand, the low availability of substitutes
also prevents customers from abandoning Intel, further weakening such power. Also,
the low level of backward integration weakens the intensity of customers’ power on the
company. For example, most manufacturers of laptops, desktops and related computing
devices do not have microprocessor fabrication facilities. Thus, customers exert a weak
force on Intel’s industry environment, as described in this aspect of the Five Forces
Analysis.
Bargaining Power of Intel’s Suppliers (Weak Force)

Intel’s business capacity and the conditions of the industry environment partly depend
on the sufficiency of suppliers. The effects of suppliers on firms are determined in this
aspect of the Five Forces Analysis. The following external factors with their intensities
contribute to the weak force of the bargaining power of Intel’s suppliers:
 Moderate overall supply (moderate force)

 Moderate size of individual suppliers (moderate force)
 Low forward integration of suppliers (weak force)
Intel has access to a moderate overall supply of materials, such as the raw materials
used for microprocessor fabrication. This external factor exerts a moderate force on the
company. In addition, the moderate size of individual suppliers creates a considerable
but limited force on the semiconductor industry environment. The bargaining power of
suppliers is also limited because of the low degree of their forward integration, which
corresponds to the high degree of Intel’s backward integration. For example, the
company maintains significant control on its supply chain. In contrast, suppliers have
limited control on Intel’s supply chain. In this situation, the overall combination of the
external factors leads to the weak intensity of the bargaining power of suppliers. Based
on this aspect of the Five Forces Analysis of Intel Corporation, the bargaining power of
suppliers is a minor consideration in strategic decision-making.
Threat of Substitutes or Substitution against Intel

(Weak Force)
Substitutes can reduce the sales and overall performance of Intel, thereby imposing a
threat in the industry environment. The intensity of such threat is considered in this
aspect of the Five Forces Analysis. The weak force of the threat of substitution against
Intel is based on the following external factors:

 Low availability of substitutes (weak force)
 Low performance-to-price ratio of substitutes (weak force)
The high switching costs make it difficult for substitutes to draw customers away from
firms like Intel. This external factor exerts a weak force on the company and the
semiconductor industry environment. Also, the low availability of substitutes weakens
the threat of substitution against Intel. For example, even if customers are interested in
using substitutes, these substitutes are not readily available. On the other hand, the
relatively low performance-to-price ratio of substitutes exerts a weak force in the
industry environment. As a result, customers like laptop manufacturers are unlikely to
easily switch from Intel’s processors to substitute products. The intensities of the
external factors determined in this aspect of the Five Forces analysis point to the minor
role of the threat of substitution in Intel’s business.
Threat of New Entrants or New Entry against Intel

Corporation (Moderate Force)
Intel Corporation faces the potential impact of new entrants in the semiconductor
industry environment. This aspect of the Five Forces Analysis deals with the influence
of new firms on the industry. In Intel’s case, the following external factors and their
intensities are responsible for the moderate force of the threat of new entry:
 Presence of high-potential new entrants (strong force)

 Moderate brand differentiation (moderate force)
There are only a few possible new entrants in the semiconductor market, particularly in
the microprocessor market. However, these firms have high potential to succeed in
competing head-to-head against Intel. For example, Apple has the foundations
necessary to develop advanced processors for non-Mac systems and capture a
significant market share (Read: SWOT Analysis of Apple Inc.). This external factor
imposes a strong force against Intel. On the other hand, the moderate degree of brand
differentiation strengthens new entrants to a limited extent. This external factor exerts a
moderate force on firms like Intel. The high switching costs further limits the intensity of
this threat because it is difficult for customers like computer manufacturers to readily
change the processors in their designs. Based on this aspect of the Five Forces
Analysis of Intel Corporation, the threat of new entry is a considerable issue in the
semiconductor industry environment.
Intel Corporation’s SWOT Analysis &

Recommendations
A Tiffany toaster with

Intel Inside sticker. A SWOT analysis of Intel Corporation shows current strength and
industry leadership, but vulnerability because of competition in the global market for
semiconductors and microprocessors. (Photo: Public Domain)
Intel Corporation’s successful semiconductor business strategically addresses the
strengths, weaknesses, opportunities and threats (SWOT) in the organization and the
external environment. The SWOT analysis model is a tool used to determine the most
significant internal strategic factors (strengths and weaknesses) and external strategic
factors (opportunities and threats) that affect the performance of the firm. Intel’s
performance is subject to the impacts of these factors. As a leader in the global desktop
microprocessor market, the company must overcome its weaknesses and the threats to
its business. Intel must also develop its strengths and exploit its opportunities to stay
ahead of competitors like AMD in the desktop market, and ARM and Apple in the mobile
device market (Read: SWOT Analysis of Apple Inc.).
This SWOT analysis of Intel shows that the company is in a comfortable position where
it is easy to maintain market dominance. Nonetheless, the company must address the
critical issues shown in the SWOT analysis, to ensure long-term success, considering
rising competition from other technology firms.
Intel’s Strengths (Internal Strategic Factors)

Intel Corporation is the strongest competitor in the global market for semiconductors.
This part of the SWOT analysis identifies the company’s main strengths or internal
strategic factors that have an enabling effect for business success. The following are
Intel’s strengths:
1. Strong partnership with Microsoft

2. High-efficiency fabrication processes
3. Economies of scale
Intel has an enduring partnership with Microsoft Corporation, which dominates the
market for desktop operating systems (Read: SWOT Analysis of Microsoft). This
partnership is partly responsible for the success of the two companies. For example,
Intel continues to benefit from the wide profit margins of its processors developed for
market-dominant Windows systems. On the other hand, Microsoft benefits from the
partnership through the satisfactory performance of Windows systems based on the
processing power of Intel’s products. Both companies use this strength as a barrier to
counteract the effects of new entry (Read: Five Forces Analysis of Intel). The high
efficiency of fabrication processes is a major strength that Intel uses to build competitive
advantage. Such efficiency allows the company to supply processors to equipment
manufacturers on time and at adequate amounts. Also, the company’s long history of
focus on semiconductor fabrication has led to economies of scale that competitors find
difficult to match. In this part of the SWOT analysis of Intel, organizational capabilities
and strategic alliance strengthen the business.
Intel’s Weaknesses (Internal Strategic Factors)

Intel remains the industry leader, but continuing this leadership requires addressing the
company’s weaknesses. This part of the SWOT analysis specifies the organization’s
weaknesses or internal strategic factors that impose challenges or limits on
performance. Intel has the following weaknesses:
1. Insignificant presence in the mobile market
2. Dependence on Windows machines
3. Limited business diversification
Intel has a mutually beneficial partnership with Microsoft. However, this partnership
leads to a weakness because it compels Intel to focus on the design and fabrication of
microprocessors for Windows systems. As a result, the company lacks comparably
extensive business processes for other products. For example, Intel remains
unsuccessful in developing competitive and profitable processors for mobile devices.
Also, the partnership makes the company susceptible to declines in desktop/PC sales.
Another weakness is Intel’s minimal business diversification. Diversification shields the
organization from market-based risks. Intel needs to implement major strategic changes
to address the weaknesses specified in this part of the SWOT analysis.
Opportunities for Intel Corporation (External Strategic

Factors)
Major opportunities are available to improve Intel’s performance. This part of the SWOT
analysis identifies business opportunities or external strategic factors that facilitate
growth. The following opportunities are available in Intel’s external environment:
1. Business diversification
2. Product development for the mobile market
3. Flexibility of processors
Business diversification is an opportunity for Intel to improve its performance. For

example, the company can develop semiconductor products to target new segments in
the household appliance market. Acquisition of other firms can also diversify the
business. Diversification remains a significant opportunity that has not been fully
exploited, considering Intel’s generic strategy and intensive growth strategies. In
addition, the company has the opportunity to develop products for the mobile market,
considering the lack of successful Intel processors for mobile devices. Also, the
company can increase the flexibility of its processors to widen their potential use. In this
part of the SWOT analysis of Intel Corporation, the opportunities point to increased
effort outside of developing microprocessors for Windows systems.
Threats Facing Intel (External Strategic Factors)

Intel’s business could potentially decline as a result of unaddressed threats in the
external environment. This part of the SWOT analysis specifies the threats or external
strategic factors that reduce or end businesses. In this case, Intel faces the following
threats in its business environment:
1. Rapid market shift to mobile computing

2. Competition with ARM in the mobile processor
3. Competition with AMD and ARM in the PC market
Intel leads in the PC processor market, especially because of the dominance of

Windows systems. However, the rapid market shift to mobile computing is a growing
threat against the company. For example, as PC sales decline, mobile device sales
increase. This condition threatens Intel, which has failed to capture the mobile device
processor market. In relation, competition with ARM devices is a major threat against
the company. ARM Holdings develops processor architectures used by the majority of
companies in the mobile device market. Moreover, in the PC market, minor competitor
AMD has potential to capture a bigger market share, and ARM Holdings has potential to
succeed with its enhanced processors for desktop systems. Intel must ensure
competitive advantage in the PC market and develop a competitive product for the
mobile device market to address the threats specified in this part of the SWOT analysis.
Intel’s SWOT Analysis – Recommendations

This SWOT analysis of Intel indicates current stability based on business strengths. A
dominant industry position shows that the company has what it takes to withstand the
effects of competition and new entry. However, weaknesses make the company
vulnerable to threats in its business environment. For example, because of its
insignificant presence in the mobile market, Intel is vulnerable to the threat of the rapid
market shift to mobile computing. Also, the company is dependent on Windows
machines, making it vulnerable to the threat of competition with AMD and ARM.
Nonetheless, Intel has opportunities to address these issues.
Based on the results of this SWOT analysis, a recommendation is to improve Intel’s

position in the semiconductor industry through increased efforts to develop competitive
and profitable processors for mobile devices. It is also recommended that the company
should establish new partnerships to reduce its dependence on Microsoft. Another
recommendation is to diversify Intel’s business, such as through new acquisitions in
other industries, for the purpose of reducing market risks and the potential impact of
declining PC sales.
Intel’s Organizational Culture for Business

Resilience (An Analysis)
UPDATED ONUPDATED ON APRIL 19, 2017 BY CHRISTINE ROWLAND
An Intel 80386 CPU
with Intel 387 Math Coprocessor. Intel Corporation’s organizational culture empowers
the business to remain resilient despite challenges in the global market for
semiconductors, microprocessors, and related products. (Photo: Public Domain)
Intel Corporation’s organizational culture defines the company’s capabilities in the
global market for semiconductors, microprocessors and other technological products. A
firm’s organizational culture indicates the values and traditions that influence employees
and their decisions. In the case of Intel, the corporate culture is applied as a way of
ensuring the company’s competencies despite competition and other challenges in the
industry. For example, the company’s organizational culture promotes human resource
support for high quality products, which help fulfill Intel’s mission statement and vision
statement. The company maintains capabilities to address rapid changes in the market.
As an industry leader, Intel benefits from using its organizational culture for business
resilience.
Intel’s organizational culture enables business capability to withstand challenges in the

global semiconductor market. This corporate culture is a critical factor that supports the
company’s effectiveness in developing competitive and profitable microprocessors and
related products.
Intel’s Organizational Culture & Its Characteristics

Intel Corporation’s values are the main defining factors of the organizational culture,
according to CEO Brian Krzanich. The company is known for its corporate culture of
meritocracy, which considers employee ability and output. This culture differentiates
Intel from competitors, maintains a high-end brand, and influences customers and
suppliers to adopt technological efficiency in their mindsets. The following are the main
characteristics of Intel’s organizational culture:
1. Customer orientation
2. Risk Taking
3. Discipline
4. Great place to work
5. Quality
6. Results orientation
Customer Orientation. Customers are a focal point that defines Intel’s organizational
culture. This cultural characteristic is strengthened based on the principle that the
company must effectively satisfy customers’ needs. For example, employees are
trained to identify possible issues customers might experience with products. This
corporate cultural feature enables the company to determine concerns that must be
included in the product development process. Through this characteristic of the
organizational culture, Intel also enhances customer service to maintain partnerships
with other technology companies and to address end-user concerns.
Risk Taking. Intel Corporation includes risk-taking as a value integrated in the

organizational culture. This cultural feature is all about taking the extra step to try new or
novel things. For example, Intel’s workers are encouraged to bring up solutions for
consideration among upper management. This characteristic of the corporate culture
contributes to the company’s proactive ability to address issues. Thus, Intel’s
organizational culture supports proactive problem solving.
Discipline. This cultural characteristic puts emphasis on rules and norms. Intel has a
system of rules on employee behavior and how to conduct business. This feature of the
organizational culture addresses the need to maintain effective business processes and
to streamline the organization according to general strategies and Intel’s operations
management policies. For example, discipline in workers’ activities minimizes deviations
of output quality relative to the company’s standards. In this way, the organizational
culture helps Intel maintain business efficiency.
Great Place to Work. Intel Corporation uses its organizational culture as a tool for
optimizing employee motivation and morale. Motivation and morale minimize employee
turnover and associated costs. This characteristic of the corporate culture is applied in
cooperation with the employees for their own benefit. For example, Intel has HR
programs that foster camaraderie and rapport among employees. The company
benefits from its organizational culture in terms of a motivated workforce that satisfies
the goals of the semiconductor business.
Quality. Quality is a major selling point aligned with Intel’s generic strategy and
intensive growth strategies. As such, the company makes sure that its organizational
culture embodies quality principles and ideals. For example, HR training programs
highlight output quality as a measure of employee excellence. This characteristic of the
corporate culture supports efforts to differentiate Intel’s microprocessors from
competitors like AMD.
Results Orientation. This feature of Intel’s corporate culture aligns with the principles
of meritocracy. For example, the company considers output and achievements as
criteria in determining employees’ merits in performance appraisals and promotions.
Intel integrates results orientation in its organizational culture through HR programs that
recognize satisfactory output. The behavioral impacts of such programs become part of
the company’s organizational culture.
Advantages & Disadvantages of Intel Corporation’s

Organizational Culture
Intel’s organizational culture has the advantage of support for business improvement
through risk taking, and ensures business resilience in the face of global competition.
This factor helps the company develop new or novel products. Another advantage of
this corporate culture is that it contributes to Intel’s competitive advantage. For example,
as one of the cultural characteristics, quality ensures attractive products to maintain the
company’s market share.
A disadvantage of Intel’s organizational culture is the limited support it has for rapid
innovation. Even though risk taking encourages employees to take certain risky steps
that could benefit the company, this cultural feature does not push all employees to
contribute to the innovation process. A recommendation is to improve the organizational
culture through additional emphasis on innovative thinking, which is critically important
in addressing challenges associated with the dynamics of global markets for
microprocessors, mobile devices, and related technologies.
Intel’s Organizational Structure for

Innovation (An Analysis)
UPDATED ONUPDATED ON SEPTEMBER 8, 2018 BY CHRISTINE ROWLAND
Intel Japan’s
Tsukuba Head Office in Tsukuba City. Intel Corporation’s organizational structure puts
emphasis on the products of the semiconductor business. (Photo: Public Domain)
Intel Corporation’s organizational structure is based on the nature of the technology
business. For instance, the conditions of the market for microprocessors and related
technologies impose challenges that the company can address through its current
organizational structure. A firm’s organizational or corporate structure is the composition
or arrangement of components necessary to keep a system of effective and efficient
operations. In Intel’s case, the organizational structure is strongly based on product
types. As a leading player in the semiconductor industry, Intel uses the characteristics
of its organizational structure to ensure success in developing and marketing its various
technological products to target customers around the world.
Product types define Intel’s organizational structure. This corporate structure is partly
responsible for the successful introduction of many Intel products through the years.
Intel’s Organizational Structure & Its Characteristics

Intel Corporation has a strong product-type divisional organizational structure. The
company’s processors and related products are classified according to their functions
and markets. The corporate structure takes this classification into consideration. The
following are the main characteristics of Intel’s organizational structure:
1. Product-Type Divisions (main feature)

2. Functional Groups
3. Geographical Divisions
Product-Type Divisions. Product-type divisions are the strongest of the features

defining the organizational structure of Intel. These divisions are based on the types of
products that the company offers. For example, the Data Center Group is a division for
products for energy-efficient servers, networks and storage. Each of these corporate
structural divisions is treated as a business segment that has its own set of strategies
for marketing and business growth, although they all follow Intel’s generic strategy and
intensive growth strategies. The following are the product-type divisions in Intel’s
organizational structure:
1. Client Computing Group

2. Data Center Group
3. Internet of Things Group
4. Software and Services Group
5. Others (New Devices, Non-Volatile Memory Solutions)
Functional Groups. Function-based groups are the second most significant

characteristic of Intel’s organizational structure. These groups are based on
administrative activities and managerial needs. For example, Intel’s CEO’s office and its
staff are a functional group. Considering the emphasis on product types in the
company’s corporate structure, many of these functional groups also correspond to
certain product types, for the purpose of effective administration and management.
Intel’s organizational structure has the following functional groups:
1. Chief Administration/CEO
2. Technology and Manufacturing
3. Intel Capital
4. Data Center
5. Non-volatile Memory Solutions
6. Human Resources
7. Automated Driving
8. Communications and Devices
9. Platform Engineering
10. Software and Services
11. Sales and Marketing
12. Internet of Things
13. Intel Labs
14. Programmable Solutions
15. Client and Internet of Things Businesses and Systems Architecture
16. Legal
17. Client Computing
18. Manufacturing, Operations and Sales
19. Finance
20. Information Systems/CIO
21. New Technology
22. Intel Security
Geographical Divisions. Intel Corporation has geographical divisions as a minor

characteristic of its organizational structure. These structural divisions are mainly used
for financial reporting and other minor managerial tasks. For example, the company
assigns a geographical division for the U.S. market, considering this market’s
significance in the semiconductor and microprocessor business. Intel has the following
geographical divisions:
1. U.S.
2. Non-U.S.
Advantages & Disadvantages of Intel Corporation’s

Organizational Structure
An advantage of Intel’s organizational structure is its enabling effect on product
development efforts. For example, through the Client Computing Group, the company
develops cutting-edge processors for notebooks and desktops. Intel’s organizational
structure also has the advantage of strong corporate managerial control. For instance,
strategies from the company’s headquarters are easily implemented through the
functional groups in the corporate structure.
Intel’s organizational structure has the disadvantage of limited flexibility in addressing

regional market differences. This disadvantage is based on the minimal significance of
the geographical divisions in the corporate structure. Thus, a recommendation to
improve Intel’s organizational structure is to increase the significance of the
geographical divisions, or to create new geographical divisions, to improve the
company’s flexibility in addressing these differences among regional markets for
semiconductors, microprocessors, and related technological products.
Intel’s Generic Strategy & Intensive Growth

Strategies
UPDATED ONUPDATED ON MARCH 17, 2017 BY CHRISTINE ROWLAND
An Intel Pentium II
266 MHz processor. Intel Corporation’s generic strategy (Porter’s model) and intensive
growth strategies ensure competitive advantage and growth in the market for
semiconductors and microprocessors. (Photo: Public Domain)
Intel Corporation’s semiconductor and computing technology business grows through
an appropriate generic strategy and effective intensive growth strategies. A company’s
generic strategy (Michael Porter’s model) determines how the business achieves and
maintains competitive advantage. On the other hand, the intensive growth strategies
define what the firm does to achieve growth in its target markets. Intel’s generic strategy
is based on innovation that ensures cutting-edge features that differentiate products
from competitors. In relation, Intel’s intensive growth strategies emphasize the cutting-
edge technologies in products that shape the industry and attract target customers
worldwide.
Intel’s generic strategy (Porter’s model) develops competitive advantage through rapid
innovation to lead the industry. Such innovation is also critical to the effectiveness of
Intel’s intensive growth strategies.
Intel’s Generic Strategy (Porter’s Model)

Intel Corporation’s generic competitive strategy is differentiation. In Porter’s model,
this generic strategy builds competitive advantage based on product quality or features,
customer service, and brand image management. In Intel’s case, differentiation is
applied through product quality and features. For example, the company invests in rapid
innovation to produce cutting-edge microprocessors and related technological products.
The advanced features of these products ensure leadership in the global market,
helping fulfill Intel’s mission statement and vision statement. The implementation of the
differentiation generic strategy helps Intel maintain its competitive advantage despite
strong competitors like AMD.
Differentiation requires key strategic objectives that make Intel an industry leader. One
of these strategic objectives is to rapidly innovate to develop new or enhanced products
that competitors cannot easily match. For example, developing faster and more energy-
efficient processors for mobile products can strengthen Intel’s industry position,
especially with regard to the mobile device market. In relation, based on the
differentiation generic strategy, another strategic objective is to increase the company’s
competitive advantage and aggressiveness in the mobile device market. This objective
is based on the fact that Intel is a minor player in the mobile device market.
Intel’s Intensive Strategies (Intensive Growth

Strategies)
Product Development (Primary). Intel Corporation keeps product development as its
primary intensive growth strategy. Product development supports business growth
through new products that increase revenues. For example, Intel supports its continued
growth and global market dominance through the introduction of new processors that
make previous processors obsolete. This intensive strategy makes the company’s new
products attractive and profitable, thereby ensuring business growth. Product
development and Intel’s differentiation generic strategy both support competitive
advantage based on product quality and features. A strategic objective based on
product development is to grow the company through rapid innovation. A related
strategic objective based on this intensive growth strategy is to increase Intel’s R&D
investment for new product development.
Market Penetration (Secondary). The market penetration intensive growth strategy

involves selling more products to current customers. Intel implements market
penetration as a secondary intensive strategy through business partnerships and
aggressive deals that favor growth and a strong market presence. For example, the
company has special agreements with laptop manufacturers to use Intel
microprocessors in their products. The differentiation generic strategy pushes the
company to develop competitive advantage based on advanced features and high
quality in product development. Such features and quality support the effective
implementation of the market penetration intensive strategy for Intel’s growth. A
strategic objective based on market penetration is to grow the company through
aggressive marketing strategies.
Market Development (Supporting). The market development intensive growth

strategy serves a supporting role in Intel Corporation’s progress. In implementing this
intensive strategy, growth is achieved by entering new markets or market segments, or
by creating new markets for novel products. In this case, Intel applies market
development when it creates entirely new product lines. For example, the introduction of
Pentium mobile processors in 2011 developed the company’s presence in the mobile
device market. The differentiation generic strategy creates competitive advantage that
increases Intel’s potential success in new markets or market segments when
implementing the market development intensive growth strategy. A strategic objective
based on this intensive strategy is to grow Intel through novel products to enter new
markets, such as the market for smart home systems.
Diversification (Supporting). Intel uses diversification as a supporting intensive growth

strategy. This intensive strategy facilitates the company’s growth through new business.
For example, the 2016 acquisition of the German company Ascending Technologies,
which develops unmanned aerial vehicles, contributed to the diversification of Intel’s
business. The differentiation generic strategy, when applied within the context of
diversification, ensures the company’s competitive advantage through products that
attract target customers. A strategic objective based on the diversification intensive
strategy is to grow Intel’s business through more acquisitions in other industries.
Intel Corporation’s Vision Statement &

Mission Statement
UPDATED ONUPDATED ON MARCH 17, 2017 BY CHRISTINE ROWLAND
An Intel Pro/100
Desktop NIC. Intel Corporation’s mission statement is satisfactory, but its vision
statement needs additional detail to describe the future of the semiconductor and
computing technology business. (Photo: Public Domain).
Intel Corporation’s vision statement and mission statement are directly linked to the
nature of the semiconductor technology business. The corporate vision statement
describes the target future condition of the business. On the other hand, the corporate
mission statement determines the strategic actions suited to reach the vision. In Intel’s
case, the mission statement is based on what one of the company’s founders
envisioned regarding the business and its nature. However, the corporate vision
statement is a general statement that describes the output of Intel’s business. A few
changes are needed to enhance the mission and vision. As the biggest firm in the
microprocessor market, Intel can benefit from these changes to guide organizational
growth.
Intel’s vision statement is strongly related to the business, but additional details are
necessary. The mission statement is detailed enough to represent the company’s
business and what it does in the global market for semiconductors and
microprocessors.
Intel’s Vision Statement

Intel Corporation’s vision statement is, “If it is smart and connected, it is best with
Intel.” This corporate vision is a general description of what the company does. The
following are the main characteristics of the company’s vision statement:
1. Smart and connected

2. Best with Intel
The first characteristic of the corporate vision describes Intel’s organizational output. For
example, smart and connected products include mobile computing devices that use the
company’s processors. This feature of the vision statement defines the kinds of
products that Intel aims to provide to its target market. The second characteristic of the
corporate vision statement highlights the capability of the company. The phrase “best
with Intel” means that the company sees itself as the most qualified and capable of
providing smart and connected products.
Intel’s Mission Statement

Intel Corporation’s mission statement is, “Utilize the power of Moore’s Law to bring
smart, connected devices to every person on earth.” This corporate mission clearly
shows what the company intends to do to strategically grow and to capture the global
market. The following are the main characteristics of Intel’s mission statement:
1. Power of Moore’s Law

2. Smart, connected devices
3. Every person on earth
The first characteristic of the corporate mission statement defines part of Intel’s
strategy, based on Moore’s Law, which states that the transistor count in integrated
circuit chips doubles every one to two years. This feature of the mission statement is a
straightforward strategic guide for product development. On the other hand, the second
characteristic of Intel’s corporate mission echoes the vision statement in determining
organizational output. However, the mission statement is more specific in including
“devices” in this feature. Moreover, the target market is included in Intel’s mission
statement, as specified in the third characteristic. For example, based on “every person
on earth,” the company targets the global market for semiconductors, microprocessors,
and related computing technologies.
Intel’s Mission & Vision – Analysis &

Recommendations
Intel Corporation’s vision statement lacks enough detail to satisfy conventions on how to
write corporate vision statements. For example, the vision statement does not describe
a future scenario that the company wants to achieve. Instead, the corporate vision
merely describes what Intel can do. A recommendation is to include a description of
such future scenario. For instance, Intel can improve its vision statement by adding
details on what the company will be in the next 50 years, relative to the conditions of the
global semiconductor and microprocessor market.
On the other hand, Intel Corporation’s mission statement satisfies conventions on

writing corporate mission statements. These conventions require specific details on
what the company plans to do to achieve its corporate vision. It is clear in the mission
statement that Intel plans to keep enhancing its products, based on Moore’s Law, and to
bring these smart and connected products to all customers worldwide. Nonetheless, a
recommendation is to add details regarding business strategies necessary to achieve
and maintain global industry dominance.

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Intel’s Operations Management Strategy: 10

Intel Corporation’s Operations Management, 10

2. Quality Management. The determination and satisfaction of quality expectations are

3. Process and Capacity Design. Operations managers’ objective in this strategic

4. Location Strategy. Cost-optimal distances from target markets, suppliers and

7. Supply Chain Management. A high-efficiency and adequate supply chain is the

8. Inventory Management. Intel’s operations managers are concerned with inventory

9. Scheduling. In operations management, the objective in this strategic decision area

1. Batches produced per day (Fabrication productivity)

Stakeholders impose significant pressure on Intel to satisfy leadership expectations, not

Intel’s Stakeholder Groups & CSR Initiatives

1. Customers (Top Priority)

Investors. Investors are significant stakeholders considered in Intel’s corporate social

Employees. Intel Corporation values employees as a major stakeholder group in its

Suppliers. Supply chain conditions determine Intel’s business capacity. Changes in

Communities. Intel Corporation includes communities in its corporate social

Intel Corporation’s Marketing Mix (4Ps)

1. Devices & Systems

Place/Distribution in Intel’s Marketing Mix

Intel Corporation’s Promotion (Promotional Mix)

Intel’s Prices and Pricing Strategies

1. Premium Pricing Strategy

Intel Corporation PESTEL/PESTLE

A PESTEL/PESTLE analysis of Intel Corporation points to the changing characteristics

Political Factors Affecting Intel’s Business

1. Continuing government support for globalization (opportunity & threat)

Economic Factors Important to Intel Corporation

1. Economic stability of developed markets (opportunity)

Social/Sociocultural Factors Influencing Intel’s

1. Improving wealth distribution (opportunity)

Technological Factors in Intel’s Business

1. Increasing adoption of mobile devices (threat & opportunity)

1. Increasing environmental contamination (threat & opportunity)

The increasing level of environmental contamination, especially due to electronic waste,

1. Increasing competitive regulations (threat)

Intel Corporation’s PESTEL/PESTLE Analysis –

Intel Corporation Five Forces Analysis

Summary & Recommendations: Intel’s Five Forces

1. Competitive rivalry or competition (moderate force)

Competitive Rivalry or Competition with Intel

 Moderate aggressiveness of firms (moderate force)

The moderate aggressiveness of firms creates a moderate force on Intel’s industry

Bargaining Power of Intel’s Customers/Buyers (Weak

 High switching costs (weak force)

Bargaining Power of Intel’s Suppliers (Weak Force)

 Moderate overall supply (moderate force)

Threat of Substitutes or Substitution against Intel

 High switching costs (weak force)

Threat of New Entrants or New Entry against Intel

 Presence of high-potential new entrants (strong force)

Intel Corporation’s SWOT Analysis &

A Tiffany toaster with

Intel’s Strengths (Internal Strategic Factors)

1. Strong partnership with Microsoft

Intel’s Weaknesses (Internal Strategic Factors)

Opportunities for Intel Corporation (External Strategic

Business diversification is an opportunity for Intel to improve its performance. For

Threats Facing Intel (External Strategic Factors)

1. Rapid market shift to mobile computing

Intel leads in the PC processor market, especially because of the dominance of

Intel’s SWOT Analysis – Recommendations

Based on the results of this SWOT analysis, a recommendation is to improve Intel’s

Intel’s Organizational Culture for Business

Intel’s organizational culture enables business capability to withstand challenges in the