Part 1
Intel Corporation is a leading manufacturer of computer processors in the world. The company produces in integrated circuits, motherboard chipsets, embedded processors and flash memory. Currently, Intel Corporation mainly produces PC microprocessors. Over the years, the company has competed with other market rivals to retain its market share. In the 1980’s, it had to contend with formidable competition from Japanese microprocessor manufacturers. It later gained market dominance and even formed partnerships with IBM to become its primary supplier of microprocessors ( Gawer, 2011) . The company has since grown its market share due to an increased popularity of its processor power.
Strategic Innovation Position
Currently, the company has innovated new processor models that use parallel computing and nested processor memory to achieve faster work speeds. These latest generation processors – core i7 – are a testimony to the sustained innovation strategy that Intel is using to maintain its competitive advantage. To maintain market dominance over the years, Intel has been pursuing a comprehensive innovation strategy by creating novel technologies for its microprocessor chips. It strives to be among the first industry leaders to research and develop new processor models such as the quad-core, core 2 duo, core i3, Core i7, and Core i5 processors. In the early years, it set new competition in the industry with its innovations for ROM technology, DRAM technology and the SRAM technology ( Borkar et al ., 2005 ) .
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Many manufacturers of PC processors currently compete to produce processor chips that have incredibly high speeds, high RAM capacities, and high storage spaces. Intel Corporation has managed to maintain dominance in innovation for many years – as evident in the dominance of Intel microprocessor chips in most world computers ( Gawer, 2011) . The company uses high-end wafer technology to manufacture more microprocessors than its market rivals do. It currently holds a dominant position due to its popular Intel microprocessors. Most loyal clients look for the “Intel Inside” label due to the trust they have developed over the years on the processor abilities for Intel Corporation products.
Intel uses a strategy of rapid innovation to upset its market rivals. It produces new innovative products in close succession to help it maintain strategic market dominance, and enhance its competitive advantage. When other market players play catch up with its new processor designs, the company releases new processor models to create sustained demand ( Gawer, 2011) . This strategy has proven to be successful. Many computers in the world today are powered by Intel microprocessors. Part of the company’s market success is tied to the company’s ability to provide new innovative processor models in quick succession.
Long before it set out to produce third generation processors (core i3), the company had attempted to increase the number of cores in its processor chips by developing core 2 duo (with four processors), and quad-core (four processors) models ( Borkar et al ., 2005 ) . When they made a breakthrough in parallel processing, the company created new core i3 models and quickly followed through with core i5 models and core i7 models.
Rapid product development is an effective and viable innovation strategy for Intel Corporation. It promises to expand the company’s market dominance and industry growth by developing new innovative products that render the products produced by rivals obsolete within short timespans ( Gawer, 2011) . Rapid product development ensures that the new processor chips produced by Intel Corporation are attractive to consumers to enable the company to make quick profits within short periods.
Strengths
According to Gawer (2011), Intel is a currently a global leader in the processor chip manufacturing industry. It has several internal strengths that enable it to maintain market dominance. First, Intel Corporation has entered into a long strategic partnership with Microsoft Corporation, where it supplies Microsoft with microprocessor chips in a closely integrated arrangement. The Windows operating system sold by Microsoft has a major dominance in the global market. Intel Corporation also derives huge profit margins from the market success for Microsoft products. Microsoft also gets a market boost when selling its products due to the high processing power of Intel semiconductor chips. The partnership between the two companies has created an effective barrier against the entry of new players in the industry.
Secondly, Intel Corporation uses unique fabrication processes that have high efficiency. This factor brings significant competitive advantage to Intel Corporation because it can produce a large number of microprocessor chips and supply them to computer manufactures within a short time. It uses wafer-manufacturing technology to achieve high efficiency in its production processes ( Borkar et al ., 2005 ). Thirdly, Intel Corporation enjoys economies of scale. Its partnership with Microsoft, a leading global supplier of Windows-based computers, has expanded the company's profit margins and created an opportunity for pursuing mass production of semiconductor chips.
Weaknesses
Several internal weaknesses undermine the company’s competitive position in the industry. The Intel Corporation must address these weak areas to achieve sustained industry leadership. First, the company’s business model is heavily dependent on Windows machines. The company has built a strong partnership with Microsoft, where it supplies microprocessor chips that are optimized to run the Windows operating system ( Gawer, 2011) .
Much of the processor design work done by Intel Corporation is tailored to suit the specifications of the Windows operating system ( Gawer, 2011) . Gawer (2011) point out that th is strategic alignment with Microsoft products undermines the company’s ability to produce microprocessor chips for other computer platforms like iOS. Today, Intel Corporation is largely unsuccessful in creating embedded microprocessor chips for mobile phones. Its profitability is dependent on the upsurge or decline in PC sales. The company also has little prospects of pursuing business diversification. For this reason, it remains susceptible to market risks.
Opportunities
Intel Corporation can pursue several opportunities to enhance its competitive advantage. First, it can pursue business diversification by producing microprocessor chips for new market segments such as those for household appliances. Secondly, Intel Corporation can also take a step to acquire other microprocessor technology firms as a strategy for achieving diversification ( Borkar et al ., 2005 ). Intel is yet to exploit the opportunity presented by diversification on the microprocessor chip industry. It can also develop microprocessor chips for the mobile phone market.
Threats
Several threats may potentially undermine the competitive advantage of the company. First, the current market for computing technology is shifting to mobile computing. More consumers prefer to buy powerful smartphones and tablets than the huge personal computers and laptops. More developers are also building popular mobile apps to run on embedded devices. This trend poses a threat to the Intel Corporation that currently enjoys market dominance in the sale of PC processors dude to the success and popularity of the Windows operating system ( Gawer, 2011) . The sale of mobile phone devices is currently on the rise, while that for personal computers is on the decline. The prospect of Intel Corporation joining the mobile processor market is under threat from dominant players such as Qualcomm, ARM Holdings, and Apple. ARM Holdings currently enjoys high dominance in the mobile processor market. When Intel Corporation decides to join the mobile processor market, it must design a strategy to upset the dominant players and achieve successful market entry ( Gawer, 2011) .
Part 2
Major Industry Competitors
Intel Corporation has established six business divisions for developing its products. It has major competitors in each of the six product divisions. Some major competitors to Intel Corporation include Advanced Micro Devices that make PC processors, Nvidia Company that makes graphics processors, and IBM Computers. Advanced Micro Devices uses a low costing strategy to try and upset its competitors in the market. In turn, Intel Corporation uses rapid product development to beat the competition in the market. Currently, Intel Corporation is still a leading world competitor among the manufacturers of PC processors ( Borkar et al ., 2005 ). Its success is tied to the widespread popularity of Windows-based computers around the world.
One of Intel Corporation’s competitors in the DEG microprocessor market is known as Microchip technology. The company manufactures analog semiconductors, microcontrollers, and memory sticks. Another competitor in the DEG chipset segment is Advanced Micro Devices ( Gawer, 2011) . Intel Corporation considers Advanced Micro Devices as the most significant competitor among all industry players in all the business divisions.
For the data center business division, the main competitors to Intel Corporation’s products are the LSI Logic, EMC Corporation, PMC-Sierra, Oracle, IBM, and NetApp. Microchip Technology and Micron Technology is a significant competitor to Intel Corporation in the segment for flash memory manufacturing ( Gawer, 2011) . For the software services segment, Intel Corporation contends with several competitors such as Symantec, PTC, Hewlett Packard, Google, Microsoft, Cisco Systems, CA Technologies, and Akamai Technologies.
Intel Corporation is a market leader because it focuses on rapid product development, product differentiation, sustained innovation, persistent improvement of processor speed, and an increase in memory capacity ( Borkar et al ., 2005 ). It also uses highly efficient manufacturing techniques to achieve wafer production. Intel Corporation has created several proven technologies into distinct platforms. The platforms with unique computing capabilities and enhanced network communications support varied computing needs for clients.
Intel has managed to beat the competition for many years by maintaining technology lead against the industry rivals ( Kempf et al ., 2013) . It also uses a secret manufacturing process to create microprocessor chips. Its wafer manufacturing technology is unique and complex, making it difficult for market rivals to implement. Due to market leadership and knowledge advantage in novel wafer manufacturing technology, the company has managed to charge its customers a premium value for its products. Over the years, this revenue stream has quickly turned Intel Corporation into a billion dollar industry.
Clients have developed immense trust in Intel Corporation products over the years. The feel reassured when they see the “Intel Inside” logo on their personal computers or laptops ( Borkar et al ., 2005 ). Even though the company has tried to open up other business segments, its mainstay market is for PC processors. The company is seeking to expand its capacity for producing PC microprocessors in the global market. Currently, the company is building extensive manufacturing facilities in various locations to support its growth strategy.
References
Borkar, S., Dubey, P., Kahn, K., Kuck, D., Mulder, H., Pawlowski, S., & Rattner, J. (2005). Platform 2015: Intel processor and platform evolution for the next decade. Technology , 1 .
Gawer, A. (Ed.). (2011). Platforms, markets, and innovation . Edward Elgar Publishing.
Kempf, K. G., Erhun, F., Hertzler, E. F., Rosenberg, T. R., & Peng, C. (2013). Optimizing capital investment decisions at Intel Corporation. Interfaces , 43 (1), 62-78.
