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INTELS CASE STUDY

ANALYSIS
INTERNAL ANALYSIS:
Resources:
1. Financial Resources
The annual revenues of Intel have grown phenomenally in recent years,
thanks to the push for more advanced technology by consumers. Since 1991
annual revenues have climbed from $4.8 billion, more than five-fold to $25.1
billion in 1997 (, , & , 1999). To continue this growth, Intel seeks to continue to
be the pre-eminent building-block supplier to the computer industry worldwide.
With these strong financial revenues, the company is expected to achieve
their target profits in the years to come through the utilisation of this resource
which they have plenty of for investment in worthwhile projects.
2. Human Resources
The total number of Intel employees was 63,700 at 1997 year-end, up from
48,500 in 1996 (, 1999). Worldwide EH&S staff number around 225 and are
organized by site (, 1997). Although there is historically a resistance on the
part of the employees when it comes to change, there is sufficient cooperation
from them on an overall note, especially when it comes to innovations for the
good of the company.
3. Physical Resources
The Company under scrutiny is an international company with more than a
dozen major facilities outside of the United States, located in eight countries.
According to (1997), there are six sites in the continental United Statesin
Arizona, California, New Mexico, Oregon, and Washingtonwith multiple
facilities at each and one site in Puerto Rico. Its oldest and smallest
manufacturing facility, wafer fabrication facility on the Aloha campus in
Oregon, was built in 1978 and was closed in 1996. In recent years Intel has
been building a new fabrication facility, an investment of $1 billion to $1.5
billion, every nine to twelve months (, 1997). With the advancement of their
physical resources in comparison with existing competitors, it is not surprising
to see that Intel has majority of the market share.

Key success factors:


1. Management
Intel placed top priority on their people, and encouraged openness, fairness,
and responsibility, Intel was able to take full advantage of its workers.
2. Mistakes
The most talented and brightest people that were employed were given
leverage when mistakes were made so that they would be encouraged to
develop breakthrough technologies.
3. Hard Work
Moore and Noyce refused to shy away from their inexperience and being
willing to do what work they needed. Also admitting their limitations, they were
able to seek out qualified employees to help build the company.
4. Competition
They learned that the key to entrepreneurial success was by being in a
constant state of awareness and fear of your competitors, entrepreneurs can
become proactive instead of reactive, seizing new opportunities as they
present themselves instead of letting them pass them by.
5. Exclusivity
By specializing and focusing on a niche market, Intel was able to not only
stand out from the crowd, but to become market leader in the industry
Value chain Analysis:

Intel's strategy in terms of the primary value chain activities:


Inbound Logistics: Intel used the traditional methods of pen, paper and telephone
to place and track its supplies and suppliers. Furthermore, it ordered supplies only in
response to customer orders. Today, Intel uses the Internet to speed the flow of
information between itself, its suppliers and customers. By tracking its deliveries and
supplies, from various countries all over the world, over the Web, the company has
reduced its order and manufacturing lead times.
Operations: Intel uses its Web based e-business system to aid in the quick
exchange of details and queries pertaining to customer orders, design specifications
and proprietary information.
Outbound Logistics: Intel uses its web based system to track deliveries to
customers and resellers. Using its vendor driven' inventory management system,
Intel can maintain its inventory levels to respond to fluctuating customer demand,
make reliable forecasts and shipments on time.
Marketing & Sales: By putting its customer order entry system on the Web, it has
reduced errors by 75%. It can take orders round the clock, where more than 25% of
its transactions occurring after normal business hours. Hundreds of Intel suppliers
use the Web to check the status of inventory levels, payments and shipments.
Services: Complete field stocking of replacement parts.
Support value chain activities:
Infrastructure: Highly developed information systems to better understand
customers preferences. It has a companywide emphasis on producing high quality
products.
Human Resources: compensation programs included to encourage worker
creativity and productivity. Intel uses extensive use of subjective rather than objective
performance measures. Also has superior personnel training.
Technological development: Coordination among R&D, product development and
marketing. It invests in technology that will show the firm to constantly produce highly
differentiated products. It also has strong capability in research.
Procurement: Systems and procedures used to find highest quality raw materials.
Also it purchases highest quality replacement parts

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