Intel New Business Group Case Analysis

The first issue that Intel must acknowledge in order to improve the success rate for new business ventures is gaining support from the entire organization. Some top execs took personal interest in NBI however, not very many did and often projects were scrapped due to the fact that there was little support by employees outside of NBI. One of the reasons there was little support for new business ventures is due to the structure of the organization. There was little alignment between how NBI management and Intel’s core business management was organized and run.

Intel had set mature and formalized policies in terms of manufacturing, development, and marketing in the mainstream businesses, where as NBI ventures had little structure. Because these two different sides of Intel had such different processes and policies, there was little communication. Therefore, obviously, those outside of NBI did not know much about what was going on with the new ventures, thus, little support. However, it is difficult to integrate the policies and structures from the core businesses for the NBI because they are very rigid and expensive.

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However, by increasing communication about the importance of innovation, especially now that PC sales are slowing, top executives may potentially be more willing to spend extra money on NBI, thus allowing the more expensive processes being used on mainstream business units to be implemented with NBI ventures. This would solve the problems with communication and support amongst Intel employees, as well as the misalignment amongst business units. Another issue that must be changed in order for the NBI ventures group to be successful in the future is the even allocation of money and resources.

Clearly it is difficult to validate spending as much money on new business ventures as is being spent on already successful business units, but it is important, nonetheless. Even more necessary for change is the fact that many of Intel’s technologies are not available to NBI’s ventures. This causes the venture group to have to spend even more money on purchasing from outside manufacturers, and more importantly does not allow the use of Intel’s core competencies, making the process both expensive and inefficient.

In addition to the aforementioned changes, there are also a few recommendations that could improve the success rate of new business ventures. First, Intel should focus primarily on producing “T- Ups”, rather than “new businesses” and “adjacencies”. This means that Intel’s NBI should focus and incubate closer to the core businesses. First, this will cause existing businesses to be more likely to want to be involved in these new innovations because the units will be able to see how the products would fit with their respective units.

In addition, Intel does not tend to support the development of products that will likely just result in spin offs since it provides little benefit for Intel. Therefore, there is little alignment in developing “new businesses” when they will likely only result in a failed business unit or a spin off. A final recommendation in order to improve the overall effectiveness of the NBI at Intel is by holding the ventures in the portfolio for longer than is currently being done.

Because the ventures are being pushed out too quickly, there is a certain amount of risk and costliness that business units must commit to. Therefore, business units clearly are less likely to be interested in the new business ventures. While this will require a decrease in the number of ventures in incubation, the elimination of many “new businesses” and some “adjacencies” will even this number out. By incubating for a longer period of time, there will be a significant decrease on the spending of expense managed divisions, further likely to increase their desire to be involved with new business ventures.

With the implementation of all of these recommendations together, I believe the NBI from Intel Corporation will be significantly more successful and well received. However, many of the recommendations are closely connected so it is necessary to fully commit. In order for Intel’s innovations to be accepted and profitable, the culture and communication of Intel must be well aligned with innovative ideas and the changing environment for the industry.