SEMESTER 1

YEAR 1
BUSINESS
MANAGAMENT
FAB 0015

PROJECT
PAPER OF
INTEL

COPRORATION
SUBMITTED FOR: SIR RADZI
SUBMITTED BY: GROUP NN
MEMBERS NAME :

Contents
COVER LETTER

BACKGROUND/HISTORY OF INTEL

ABOOUT INTEL

INTEL LOGO

ANNUL REPORT

BUSINESS ORGANIZATION

CORPORAT DIRECTORY

10-11

HUMAN RESOURCE STRATEGY

12-13

STRATEGIC PLAN

14

PRODUCTS

15-17
2

MARKETING

18

FINANCIAL

19-20

Date: May 4, 2015

Mr.
Business Management,
Department and Management and Humanities,
University Teknologi Petronas,
Malaysia

_____________________________________________________________
Dear sir,
SUB: Submission of Assignment
As a first semester students for foundation programmed in University Teknologi Petronas,
this is our pleasure to submit our assignment on the research of Intel Corporation which
were assigned. This is a great opportunity for us as we acquire a lot of knowledge about
Intel. We also gain more experiences as we have to work in group. This is a first attempt
on how we want to communicate with each other and do our assignment by ourselves.
2. We had did a great efforts in order to complete our assignment and achieve our
objectives of this case study based on the Intel corporation and we hope our assignment
has achieved the purpose of this assignment.
3. Thank you for your time and consideration.

Sincerely,
___________________
__________________
____________________

BACKGROUND / HISTORY OF INTEL

Intel was founded in Mountain View California in 1968 by Gordon E. Moore, who was a
chemist and Robert Noyce, a physicist and a co-inventor of the integrated circuit. Arthur
Rock helped them find investors, while Max Palevsky was on the board from an early
stage. Before this, Moore and Noyce had left Fairchild Semiconductor and incorporates a
new venture as NM Electronics. Later that year, they purchase the right to use the Intel
name from a company called INTELCO. Arthur Rock was not an employee, but he was
an investor and was a chairman of the board. Moreover the total initial investment in Intel
was 2.5 million dollar convertible debentures and 10, 000 million dollars from Rock.
Then, just 2 years later, Intel completed their initial public offering (IPO), and raised 6.8
million dollar (23.50 million dollar per share). Intels third employee was Andy Grove, a
chemical engineer, who later ran the company through much of the 1980s and the highgrowth 1990s.
Intel Corporation, is an American multinational technology company that had
headquarters in Santa Clara, California. It is one of the worlds largest and highest valued
semiconductor chip makers, based on revenue. Also, Intel was the inventor of the x86
series of microprocessors, the ones that is found in most personal computer. Though, Intel
was originally known primarily to engineers and technologist, its Intel Inside
advertising campaign of the 1990s made it a household name, along with its Pentium
processors.
A little more, about the story behind the name Intel itself, the founder Moore and Noyce
quickly rejected the name Moore Noyce to name their corporation. This is because the
homophone for more noise was an ill-suited name for an electronic company, since
noise in electronic is usually very undesirable and typically associated with bad
interference. Instead, they used the name NM Electronics before renaming their company
Integrated Electronics or Intel for short.

Intel design and manufacture advanced integrated digital technology platforms. A

platform consists of a microprocessor and chipset, and may be enhanced by additional
hardware, software and services. Intel sell these platforms primarily to original equipment
manufacturers ( OEMs ), original design manufacturers ( ODMs ) and industrial and
communication equipment manufacturers in the computing and communication
industries. Our platforms are used to deliver a wide range of computing experiences in
notebooks, 2 in 1 systems, desktops, servers, tablets, smartphones, and the Internet of
Things ( including wearables, transportation systems, and retail devices ). Intel also
develop and sell software and services primarily focused on security and technology
integration. By December 27, 2014 Intel had about 106, 700 employees worldwide,
approximately 51% of those employees are located in the U.S.

ABOUT INTEL
Intels Mission
To delight our costumers, employees, and shareholders by relentlessly delivering the
platform and technology advancement that become essential to the way we work and live.

Intels Vission
Create and extend computing technology to connect and enrich the lives of every person
on earth, by focusing on the following key strategic objectives.

Intels Objetives

To extend our silicon technology and manufacturing leadership

To deliver unrivaled microprocessors and platforms
To grow profitability worldwide
To excel in customers orientation

Intels Key Success of Factors

Strategy retaining skilled labor force
Process Manufacturing chips and transitioning manufacturing plants with new
technologies.
Technical Control and manage data for current technologies that are utilized. Helps
innovate.

Intels Values

Customers orientation
Results Orientation
Risk Taking
Great Place to Work
Quality
Discipline

Intels Logo
The first logo, the dropped-e Intel logo was wide use and was highly recognizable
worldwide during 1960s. And when Intel has become one of the worlds most
recognizable computer brands thanks to its long running Intel Inside Campaign. Intel
branding Campaign was originally started with The Computer Inside tagline in 1990 in
the US and Europe. The Japan chapter of Intel proposed Intel in it tagline in December
25 in 1990. Several months later, The Computer Inside incorporated the Japa idea to
become Intel Inside which eventually elevated to the worldwide branding campaign in
1991, by Intel marketing manager Dennis Carter. The case study of the Inside Intel was
put together by Harvard Business School. The Intel swirl logo was the work of Dahlin
Smith White art director Steve Grigg under the direction of Intel president and CEO
Andy Grove. This Intel Inside logo was used from 1991 until 2006.

2014
Annual
Report Current
6

Progress of Intel Business

For 2014, Intel reported record revenue of $55.9 billion, up 6% from 2013. Net
income rose 22% to $11.7 billion, and earnings per share were $2.31. Their operating
income of $15.3 billion was up 25% over 2013. They achieved record annual unit
shipments for PCs, servers, tablets, phones, and the Internet of Things.
According to the Chairman of The Board of Intel, Andy D. Brant, 2014 was a year of
significant and tangible progress for Intel.they solidified their strategy and executed it
well in 2014, resulting in a very strong year for Intel. Intel sharpened their focus,
accelerated their pace of innovation, and delivered stockholder return. As Intel move
forward, it will continue it work to ensure that if its smart and connected, it is best with
Intel.
In reviewing cash policy, the Board looks first at the needs of the business. Most of
Intels investments focus on advanced technologies critical to business success. In 2014,
Intel made capital investments of $10.1 billion, the largest portion of which was used to
build and equip leading-edge manufacturing capacity. The company also spent $11.5
billion on research and development. About 70% of this was for technical capabilities and
intellectual property, the costs and benefits of which are shared across Intels business
segments. This broad and deep foundation allows us to integrate functions into the
platform products that customers increasingly require.
After reviewing plans for the business, the Board considers the dividend and then
stock repurchases. In 2014, the Board announced the first increase in the dividend since
2012, from $0.90 to $0.96 per share. It also authorized an acceleration of stock
repurchases to return more cash to investors. Intel repurchased $10.8 billion worth of
Intel stock in 2014, five times the level of 2013. Through dividends and repurchases, Intel
returned cash to stockholders in 2014 of $15.2 billion, more than two times the amount in
2013.
These actions extend Intels commitment to deliver long-term value to owners. In the
last five years, Intel returned $54.2 billion to stockholders through dividends and stock
repurchases. Since 2009, the dividend has risen from $0.56 to $0.96 per share, and
average shares outstanding have decreased from 5.6 to 5.1 billion shares.
With an eye to Intels future, the Board reviewed its composition to make sure it has the
appropriate skills and experience for stewardship. We added a new Board member who
brings more than 20 years of experience in enterprise software innovation and cloud
computing, areas that are key to Intels business.
For them, change is essential for innovation. We must continue to embrace change
and innovate. Their goal is to continue the foundational technology investments and drive
Intels profitability.
.

Business Organization
As of December 31, 2011, Intel managed their business through the following operating
segments.

Corporate Directory
BOARD OF DIRECTORS
Ambassador Charlene Barshefsky5
Senior International Partner
Wilmer Cutler Pickering Hale and Dorr LLP
Aneel Bhusri
Co-Founder and Chief Executive Officer
Workday, Inc.
Andy D. Bryant
Chairman of the Board
Susan L. Decker
Principal
Deck3 Ventures LLC
John J. Donahoe
President and Chief Executive Officer
eBay Inc.
Reed E. Hundt
Principal
REH Advisors
Brian M. Krzanich
Chief Executive Officer
James D. Plummer
John M. Fluke Professor of Electrical Engineering
Stanford University
David S. Pottruck
Chairman and Chief Executive Officer
Red Eagle Ventures, Inc.

Frank D. Yeary
Executive Chairman
CamberView Partners, LLC
David B. Yoffie
Max and Doris Starr Professor of International
Business Administration
Harvard Business School

EXECUTIVE OFFICERS
Andy D. Bryant
Chairman of the Board
William M. Holt
Executive Vice President,
General Manager,
Technology and Manufacturing Group
Renee J. James
President
Brian M. Krzanich
Chief Executive Officer
Gregory Pearson
Senior Vice President,
General Manager,
Sales and Marketing Group
Stacy J. Smith
Executive Vice President,
Chief Financial Officer

10

Intels Human Resource Strategy

One of the Human resource strategy applied in Intel is the HR people strategy. The
human resource management strategy has shifted to hiring professionals with cross
sectional skills. These teams then work in collaboration to come up with compelling
products that are inline with the product driven strategic plan process. All the units have
received processor experts or IT managements for the sake of sustaining the Intel IT
strategy. With the people strategy, the company carefully correlates the human resource
policies to achieve the Intel IT strategy in several ways. First, a team of professionals
within the IT department consisting of engineers, architects and business analysts within
the company keeps a close eye on the implementation and achievements of the strategic
plan. This is done by analyzing the gaps with the within the strategic plan and makes
recommendations necessary to implement the change. Such recommendations must
reflect the broad range of functions within the Intel Company.
After the analysis and the recommendations, the next thing is to keep the employees
updated on the new strategic plan approach. The employees are then assessed on how
much of the organization direction they understand for the sake of training. In this
instance, all levels of the organization embrace the communication of the strategic plan.
In this way, the understanding and support of the strategic plan is made possible for the
personnel.
One of the approach adapted for such communications included the IT employee
communication with which exposure of employees to the product driven strategic plan
would be maximized. In this approach, managers provide briefings to the employee. They
also provide employees with presentations, video casts and articles through which the
employees get a clear and bigger picture of the composites of the revised strategic plan.
To boost the people strategy, Intel company reorganization put into place the old
employees into new jobs and increased the employees with about 20, 000 new faces as a
way of encouraging the launch of new products(Craig, & Johnson, 2008). Most of the
employees are highly specialized in dozens of fields including the doctors, software
developers, engineers, marketers, and other managers. Market specialist analyze the
competitive nature of the market environment and report to the management who assign
duties and responsibilities to core teams, subject matter experts and the decision makers.
To recognize the contribution of its employees, the company has a reward and
recognition strategy which as a way of employees motivation and performance
improvement. As a way of motivating its employees, Intel Company includes both
monetary and non-monetary rewards. With the monetary awards, the employees are
motivated to perform even better in their duties. The non-monetary awards like informal
or formal acknowledgement of employees or more enjoyable duties are provided as a way
of building up the confidence and satisfaction feelings of the employees. Additionally,
non-monetary awards to employees promote employees retention.

11

To a competitive company like the Intel company, retaining employees is as

important as ensuring a given product is sustained. Product-driven strategic plan calls for
expertise in innovations of the existing products to advance them as well as inventions
and new creative ideas (Craig, & Johnson, 2008). Having such employees within the
work force is one thing but retaining them is another. As a way of retaining their
competitive advantages, employees within Intel Company are rewarded to ensure
expertise is not lost to other competitors likeTexas instruments, or HP.
The reward system in Intel, whose aim is to achieve product differentiation also
promote innovations and creativity as a way of providing unique products and services.
This way, the all level managers identify the work of the employees under their docket
recognize their efforts informally by showing regular appreciations as a way of
encouraging a given code of conduct in an employee. Finally, the company can then
formally recognize the individual by awarding certificates, vacations, training or even
promotions. This is effective since like is the case, the current CEO was a former
employee of the company, Otellini. Though he holds no degree in engineering, he took
over from his predecessor Barret who was an engineer. The company is going places with
the new CEO despite all odds.

12

Intels Strategic Plan

One critical element of any successful business is the strategic plan. Like many other
IT companies, Intel has to remain in touch with its present activities while keep a close
eye on the future (Craig, & Johnson, 2008). As a matter of fact, such a move is aimed at
enabling the business to have rapid, timely and effective response to shifting business
climate and to delivering solutions which are in tune with the corporations needs as a
whole. The only way to achieve such corporation goals is to engage in a process of
strategic planning.
Currently, the company strategic plans high priority is on aligning the business. This
is in the efforts to make information available for the leaders to make the decisions right
and best for the company (Craig, & Johnson, 2008). Additionally, such an alignment is
important in keeping the business activities well within the budget. Since the IT field is
dynamic, the strategic plan is also incorporates diversification and change possibilities as
a way of ensuring new directions and growth opportunities are pursued to make future
company goals possible.
A purpose-driven strategic plan process is what Intel Company uses to date (Craig, &
Johnson, 2008). In this way, the companys strategic plan is integrated in that it is
combines the strategic planning calendar with the planning cycle of the corporation. This
way synchronization of the companys activities in IT with the direction of the company
is possible.
Additionally, Intels purpose driven strategic planning process holistic nature is a
good way to explore both the companys business direction and the investment in
technology (Craig, & Johnson, 2008). In this way, the entire of the corporate work
environment can be well understood in depth since ideas and expertise can be
consolidated explicitly from across the Intel IT.
A sustainable strategic plan is very crucial since all decisions made today will affect
tomorrow by all means (Craig, & Johnson, 2008). In this light, the purpose driven
strategic plan process of Intel requires sound decisions so that future generations will not
be provided with limited choices that may limit the continued growth of the company.
Sound decisions and effective implementation of such decision is only possible when a
company has a sou

13

Products
Intel Corp is the worlds largest semiconductor broad line industry by market
capitalization. Intel supplies to the computing and communications industries. The
product composition that Intel supplies to these industries include, but limited to
microprocessors, chipsets, network processor chips, embedded control chips, and flash
memory used in cellular handsets and handheld computing devices. Board level products
include Ethernet network interface cards and complete PC motherboards for OEMs. End
markets for Intel products include Personal Computers (PCs), servers, and networking
and communications equipment.
1.

Microprocessor

A microprocessor is the central processing unit ( CPU ) of a computer system. CPU acts
as the brain of the computer and it function to process system data also controls other
devices in the system. Intel offer microprocessor for a variety of products such as laptops,
netbooks, servers, and handhelds. Intel also offer microprocessors with one or multiple
processor cores. Multi-core microprocessors can enable improved multitasking and
energy-efficient performance by distributing computing tasks across two or more cores.
Their 2nd and 3rd generation Intel Core processor families integrate graphics
functionality onto the processor die. In contrast, some of our previous-generation
processors incorporated a separate graphics chip inside the processor package. We also
offer graphics functionality as part of a separate chipset outside the processor package.
Processor packages may also integrate the memory controller.
2.

Chipset

A chipset sends data between the microprocessor and input, display, and storage devices,
such as the keyboard, mouse, monitor, hard drive or solid-state drive, and CD, DVD, or
Blu-ray drive. Intel chipsets are also in a wide variety of products and is very often seen
paired with Intels microprocessor units. Chipsets extend the audio, video, and other
capabilities of many systems and perform essential logic functions, such as balancing the
performance of the system and removing bottlenecks. Some chipsets may also include
graphics functionality or a memory controller, for use with our microprocessors that do
not integrate those system components.
3.

System-on-Chip ( SoC )

Intel also offer and are continuing to develop System-on-Chip (SoC) products that
integrate our core processing functions with other system components, such as graphics,
audio, and video, onto a single chip. SoC products are designed to reduce total cost of
ownership, provide improved performance due to higher integration and lower power
consumption, and enable smaller form factors.
They also offer features to improve their platform capabilities. For example, they offer
Intel vPro technology, a computer hardware-based security technology for the
14

notebook and desktop market segments, designed to provide businesses with increased
manageability, upgradeability, energy-efficient performance, and security while lowering
the total cost of ownership. In 2011, Intel introduced the 2nd generation Intel Core
vPro processor family, designed to deliver security, manageability, and power
management on the 32-nanometer (nm) process technology.
Intel offer a range of platforms that are based upon the following microprocessors:

Motherboards
4.

Motherboard

The motherboard acts as the skeleton for a computing device. Intels designs motherboard
for desktop, server, and workstation platforms. The motherboard is the main board that
houses the microprocessor, chipset, memory, and other essential components. The mother
also acts as a subsystem for transferring data between various parts of the device.

15

5.

Wireless and Wired Connectivity

These products include network adapters and embedded wireless cards that are used to
translate and transmit data across information networks. These wireless connectivity
products are based on WiFi technology, which allow users to connect wirelessly to high
speed Local area networks (LAN) within the range of the network.
6.

Phone Components

In addition to the Intel Atom processor-based products for the smartphone market
segment, Intel offer components and platforms for mobile phones and connected devices.
Key mobile phone components include baseband processors, radio frequency
transceivers, and power management integrated circuits. They also offer complete mobile
phone platforms, including Bluetooth wireless technology and GPS receivers, software
solutions, customization, and essential interoperability tests. Their mobile phone
solutions based on multiple industry standards enable mobile voice and high-speed data
communications for a broad range of devices around the world.
7.

McAfee

McAfee offers software products that provide security solutions for consumer, mobile,
and corporate environments designed to protect systems from malicious virus attacks as
well as loss of data. McAfee's products include endpoint security, network and content
security, risk and compliance, and consumer and mobile security.
8.

Wind River Software Group

The Wind River Software Group develops and licenses embedded and mobile device
software products, including operating systems, virtualization technologies, middleware,
and development tools.
9.

Non-Volatile Memory Solutions

Intel offer NAND flash memory products primarily used in solid-state drives (SSDs),
portable memory storage devices, digital camera memory cards, and other devices. They
offer SSDs in densities ranging from 32 gigabytes (GB) to 600 GB. Their NAND flash
memory products are manufactured by IM Flash Technologies, LLC (IMFT) and IM
Flash Singapore, LLP (IMFS).

16

Marketing
Intels global marketing objectives are to build strong, well-known Intel corporate
brand that connects with businesses and consumers, and to offer a limited number of
meaningful and valuable brands in the Intels portfolio to aid businesses and consumers in
making informed choices about technology purchases. The Intel Core processors family
and the Intel Quark, Intel Atom, Intel Celeron, Intel Pentium, Intel Xeon, Intel
Xeon Phil, and Intel Itanium trademarks make up Intels processor brands.
Intel also promotes brands awareness and preference, and generate demand through
its own direct marketing as well as through co-marketing programs. Intels direct
marketing activities primarily includes advertising through digital and social media and
television, as well as consumers and trade events, industry and consumers
communications, and press relation. Intel markets to consumer and business audiences,
and focus on building awareness and generating demand for new form factors such as
tablets, Ultrabook devices and 2 in 1 system powered by Intel. Intels key messaging
focuses on increased performance, improved energy sufficiency, and other capabilities
such connectivity, communications, and security.
Purchases by customers often allows them to participate in cooperative advertising
and marketing programs such as the Intel Inside Program. This program broadens to
reach of Intels brands beyond the scope of their own direct marketing. Through the Intel
Inside Program, certain customers are licensed to place Intel logos on computing devices
containing Intels microprocessors and processors technologies, and to use Intels brand
in their marketing activities. The program includes a market development component that
accrues funds based on purchases and partially reimburses customers for marketing
activities for products featuring Intel brands, subject to customers meeting defined
criteria. These marketing activities primarily includes advertising through digital and
social media and television, as well as press relations. Intel also entered into joint
marketing arrangement with certain customers.
In 2014, Hewlett-Packard Company (HP) accounted for 18% of Intels net revenue
(17% in 2013 and 18% in 2012), Dell Inc. (Dell) accounted for 16% of Intels net revenue
(15% in 2013 and 14% in 2012), and Lenovo Group Limited (Lenovo) accounted for
12% of Intels net revenue (12% I 2013 and 11% in 2012). No other customer accounted
for more than 10% of Intels net revenue during such periods.

17

Financial
For 2014, Intel reported record revenue of $55.9 billion, up 6% from 2013. Net
income rose 22% to $11.7 billion, and earnings per share were $2.31. Our operating
income of $15.3 billion was up 25% over 2013. We achieved record annual unit
shipments for PCs, servers, tablets, phones, and the Internet of Things.
In PC clients, revenue of $34.7 billion was up 4% over 2013. Operating income of $14.6
billion was up 25%. We introduced the Intel Core M processor family, designed to
enable superior compute and graphics performance and long battery life in razor-thin,
fanless mobile devices. In Chromebooks*, Intel now leads in market segment share. In
data center products, revenue was $14.4 billion, up 18% over 2013, and operating income
increased 31% as we capitalized on the growth of cloud computing and big data.

During Q4 2014, the closing stock price conversion right condition of the 2009
debentures was met and the debentures wil be convertible at the option of the holders
during Q1 2015. The excess of the amount of cash payable if converted over the carrying
amount of the 2009 debentures of $912 million has been classified as temporary equity
on our consolidated balance sheet as of December 27, 2014.

18

During 2013, management approved several restructing actions, including targeted

workforce reductions as well as exit of certain business facilities.

The net revenue for the PC Client Group operating segment increased by $1.4 billion, or
4% in 2014 compared to 2013. PC Client Group platform units sales were up 8%,
primarily on strength in the traditional PC business, while PCCG platform average selling
prices were down 4%. The increase in revenue was driven by higher notebook platform
unit sales of 11%. To a lesser extent, higher desktop platform unit sales of 3% and higher
desktop platform average selling prices of 2% also contributed to the increases. These
increases were partially offset by lower notebook platform average selling prices of 7%.
Operating income increased by $2.9 billio, or 25% , in 2014 compared to 2013, driven by
$2.8 billion of higher gross margin and $109 million of lower operating expenses. The
increase in gross margin was driven by approximately $1.2 billion of lower PCCG
platform unit costs, approximately $930 million of lower factory start-up costs primarily
driven by our next generation 14nm process technology, and higher PCCG platform
revenue.
Net revenue for PCCG operating segment decreased by 1.4 billion dollars, or 4%, in 2013
compared to 2012. PCCG platform unit sales were down 3%, primarily on softness in the
traditional PC business during the first nine month of the year.The decrease in revenue
was driven by lower notebook and desktop platform unit sales, which were down 4% and
2% respectively. PCCG platform average selling prices were flat, with 6% higher desktop
platform average selling price offset by 4% lower notebook platform average selling
price.
Operating income decreased by 1.3 billion dollars, or 10%, in 2013 compared to 2012,
driven by 1.5 billion dollars of lower margin, partially off set by 234 million dollars of
lower operating expenses. The decrease in gross margin was driven by 1.5 billion dollars
of higher factory start-up costs, primarily on our next generation14nm process
technology, as well as lower PCCG platform revenue. These decrease were partially
offset by approximately 520 million dollars of lower PCCG platform unit costs, 260
million dollars of lower excess capacity charges, and higher sell-through of previously
non-qualified units.

19