COMPANY PROFILE -Intel
Business Sector :Information Technology, Semiconductors
Operating Geography :United States, North America
About Intel :Intel Corporation in is an American multinational having its headquarters in Santa Clara, California. It was founded by Robert Noyce and Gordon Moore in July 1968. It is the world's largest chip maker & microprocessor making company. It is the manufacturer of the X86 series of chips and is a prime supplier for many computer system manufacturers like Apple, Lenovo, Dell etc. Apart from the manufacture of microprocessors it also manufactures motherboard chipsets, embedded processors and graphics chipsets. The business units of Intel include Client Computing Group, Data Center Group, IOT Group, Non-Volatile memory solutions group and programmable solutions group.
Intel Revenue :
USD 62.8 billion – FY ending 30th Dec 2017 (y-o-y growth 6%)
USD 59.38 billion – FY ending 30th Dec 2016
Competitive Analysis of Intel
|1. First Mover Advantage|
2. Monopoly and strong competitive presence in the microprocessor industry.
3. Economies of scale.
4. Strong Brand Loyalty
|1. Unable to tap the market of smartphones & tablets.
2. Dependent on large revenue from a single segment.
3. Higher retail prices as compared to competitors.
|1. The rise of Internet of Things.|
2. Progression towards artificial intelligence.
3.Rise and rise of Big Data
|1. Increase in competition in both microprocessors and semiconductor industry:
2. Volatile nature of Microprocessors market:
3. High cost of material:
4. Product Specialisation remains a big threat
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Detailed SWOT Analysis of Intel
1. First Mover Advantage: Intel is the first in the semiconductor industry and is the first to manufacture the X86 series of microprocessors. Robert Noyce and Gordon Moore founded Intel in July of 1968 while its major competitor AMD was not founded by Jerry Sanders and seven others till as late as May 1st, 1969. Upon launch, the users of these two processors got separated. Corporate users, SME's, schools, and universities chose the Intel processor for its superiority on applications while gamers and people on low budgets opted for AMD because of the cost advantage.
2. Monopoly and Strong competitive presence in microprocessors industry: Being the largest player in the market it creates a huge entry barrier for new competitors. Intel enjoys what Warren Buffet coined as an “Economic Moat”.
3. Economies of Scale: The cost of manufacturing an additional chip decreases considerably once a technology has been developed and the company enjoys economies of scale. Also, the price of the building components of the chip decrease thus leading to profits. Intel has a huge advantage in terms of manufacturing capabilities all around the world which is a barrier to the entry of new competition.
4. Strong brand loyalty: According to brand finance report of 2016, Intel was at 40th rank among word top brands and had acquired 7th position when it came to tech companies. According to fortune, it ranks among 46th position for most admired companies. Intel has always established itself as ”brains” of the computer and always stayed away from the obvious positioning as a commodity.
1. Unable to tap the smart phone market: Being mostly present in the personal computer segment Intel was unable to tap on the boom in the smart phone industry. Ironically, Intel’s legacy in the PC market actually turned out to be its biggest weakness when it came to boom in mobile products. The company’s powerful x86 architecture was perfectly suited for mains connected high performance PCs, but the requirements of mobile were different. Eventually companies like Qualcomm and AMD took the lead in the smart phone and mobile segment taking a prospective opportunity away from Intel.
2. A Large share of revenues comes from PC as a segment: There has been a decrease in the demand in PC industry after the advent of smart phones and this has come up to be a concern for Intel Inc as it tries to look for alternative avenues for business revenues. Still, the major chunk of its revenues comes from PC segment where Intel has been the market leader. But as this segment is shrinking Intel needs to look for another market for its microprocessors.
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