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Is Intel’s Business Model Fit For The Future Case Solution & Answer

Is Intel’s Business Model Fit For The Future Case Solution

Introduction

Intel Corporation is a digital technology company,Intel’s headquarters is located in Santa-Clara, California (US).The company was primarily merged as NM electronics in July 1968 by Gordon E Moore(author of the famous Moore’s laws) N Robert Noyce in mountain view California The same year NM electronics took the rights to use the name of Intel from the company called: Intel-co for US$15000 soon after the Intel’s foundation,Andy Grove joined the founders and together they headed to the expansion of new type of computer memory. Several further innovations followed the inclusion of Intel’s first microprocessor, which ignited a computer and internet revolution(IMD – International Institute for Management Development, 2020).

Intel was the leading microprocessor chip manufacture globally.The company designed and established integrated digital technology products and components for the computing and communication industry. These products were used in notebook, tablets, severs, smart phones, desktop and wearable transportation system, and retail devices were joined with software and services focused on security and technology integration. Intel traded its products and solutions to equipment, communication, industrial and design manufactures.

Problem or Issue of the Central Focus of This Case

In this case, we will look into Intel’s history and the industry background of semiconductor which includes framework to compare the business model and Intel’s value chain, and one of its competitors: ARM.Intel’s previous changes show that it played in several fields, which today are successful and yet the company is struggling. The company’s competitors, such as: arm seemed to have more value chain and acquired its benefits. Previously, ARM seemed to be  uncertain regarding Intel’s credibility to respond to the changes in the industries it operated in. Intel didn’t have any clarity regarding what strategy should be considered based on challenges in environment and existing resources and capabilities,considering the industry’s environment.

Five Forces Model

Threats of New Entrants

Possibly new entrants cannot just be like Amazon and Google,but they can also exhibit the characteristics of other players who designed chips but did not manufacture them like Apple did. Entry barriers in semiconductor market were high due to the higher level of investment required to form production facilities, considering which the-entrants might choose an alternative business model, such as: licensing.

Competitive Rivalry

The competition between the companies in the semiconductor industry is extreme.The pressure to deliver the cheaper, faster and better products with better technology and innovation (compared with a direct competitor) is an inherit feature of rivalry in this market.However it is challenging for consumers to switch from Intel’s processors to other processors, like laptop manufactures for example those from AMD, because they involve substantial cost in design.

Bargaining Power of Buyers

High switching cost makes it problematic for customers like desktop manufactures to change from Intel to other microprocessor.This factor weakens the bargaining power of customer.

Bargaining Power of Suppliers

Intel has entered into an overall supply of materials for microprocessor fabrication, such as the use of raw material.

Threats of Substitute

Sales of Intel and substitute can reduce the overall performance of the firm as they are complex for substitutes, and high level of costs to draw the customers away from Intel. The lower level obtain-ability of substitute declines the threat of substitution……………………

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