Intel Corporation is the world’s largest semiconductor company and has its corporate office at Santa Clara, California, USA. It has around 200 facilities all over the globe. The company was founded in the year 1968 by Bob Noyce and Gordon Moore. Paul Otellini is the Chief Executive Officer and Craig Barrett is the Chairman, Board of Directors of Intel Corporation. In the year 2005 it was ranked 49th in the fortune 500 list and its revenues were $38. 8 billion and net income was $12. 1 billion. In September 2006, Intel had nearly 100,000 employees.
Today Intel is the leading manufacturer of high quality processors, chipsets, motherboards, adapters, Ethernet controllers, micro controllers, PCI bridges, storage systems etc. for a wide range of applications like desktop, laptop, servers and workstations, networking communications, consumer electronics, health care sector and entertainment industry. Paul Otellini the current Chief Executive Officer of Intel Corporation along with Eric B. Kim the Chief Marketing Officer has brought about revolutionary strategic changes in the company.
Under the stewardship of his predecessor Andrew S. Groove Intel Corporation had grown into one of the most powerful technology companies in the world. The company had a very narrow focus as it manufactured and marketed very powerful microprocessors for the personal computers. The company established hyper productive plants that could manufacture very large quantities of microprocessors in a very short period providing for very high economies of scale for Intel Corporation.
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The company made a great contribution to the rapid growth of information technology industry by manufacturing ever-faster and more powerful microprocessors. It had core competencies in design of complex chips for PCs and servers. Intel’s brand grew to be the fifth best known brand in the world. As a result it was way ahead of its competitors in the semiconductor industry in the world and was able to maintain high cash reserves from profits earned over a long period of time since its inception in the year 1968
After taking over Paul Otellini has made major revisions in the strategies of Intel Corporation. The company has made a major strategic shift from a technology focused company in the Groove era to a marketing focused company. Intel in addition to the personal computer industry is now playing a key technological role in half-dozen fields including consumer electronics, wireless communications, health care, media & entertainment, cell phones, servers etc.
Intel Corporation is not just manufacturing microprocessors as before but is also manufacturing all kinds of chips and software that are meld together into platforms that lead to new devices and technologies for specific and emerging applications to provide more value and ease of use to the potential customers using such applications. The company now uses new product development teams for powering product innovations in a given time frame. Earlier in the Groove era engineers in the R&D department developed new products and then the marketing department had to sell them.
Now the product development team comprises of people with a cross section of the skills. The team includes chip engineers, software developers, specialist marketers, ethnographers and doctors who work as a team to come up with compelling and innovative products at a fast pace Paul Otellini has lead Intel Corporation to power innovations in all areas of the consumers right from the living room to the emergency room. He has been able to provide more powerful yet simple technology to the consumers.
He has also revitalized the Intel brand which was the fifth best known brand in the world. The old Intel logo with a dropped “e” has been discontinued and a new logo of Intel Corporation with a whirl around and accompanied by the punch line “Intel Leap Ahead” has been introduced by the company. Though Paul Otellini has been blamed for the new strategies of Intel Corporation expanding into many different lines and for making other strategic changes from the Groove era he is in synchronization with the needs of sound strategic management.
Strategic Management is a set of managerial decisions and actions that determines the long run performance of a corporation. The strategic management process provides a method for monitoring change and examining alternate courses of action. It emphasizes the monitoring and evaluation of external opportunities and threats in light of the corporation’s strengths of weaknesses. Strategy is an integrated and coordinated set of actions that exploit core competencies and gain a competitive advantage.
Strategies should be flexible to adapt to the changes over time in the external environment and the firm’s resource portfolio. The business world today is characterized by intense global competition and is changing rapidly, and the rate of change is increasing. For an organization to address unknown future challenges, it must examine systematically and continuously the contingencies in its operating environment. Intel Corporation’s revised strategic objective of diversifying into a number of other business areas is definitely a very smart move by the company.
Intel needed to change with the changing times. It was a stark necessity to move away from the narrow focus on personal computers because the growth rate of sales in personal computers had dropped drastically as a result revenue growth rate of the company was expected to drop from 13% to 7% and the profit growth rate which was 40% was expected to drop down to 5%. The company was also facing intense competition from its long time rival American Micro Devices Inc. whose market share had risen to 17. 8% and its market share was expected to rise further in the future in the personal computer industry.
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