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Intel’s Business Strategy Case Study

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Intel’s Company Overview


Intel Corporation is an American multinational technology company headquartered in Santa Clara, California. Intel is one of the world's largest and highest valued semiconductor chip makers, based on revenue. It is the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel supplies processors for computer system manufacturers such as Apple, Samsung, HP, and Dell. Intel also makes motherboard chipsets, network interface controllers and integrated circuits, flash memory, graphics chips, embedded processors and other devices related to communications and computing. Intel Corporation was founded on July 18, 1968, by semiconductor pioneers Robert Noyce and Gordon Moore and widely associated with the executive leadership and vision of Andrew Grove. Intel combines advanced chip design capability with a leading-edge manufacturing capability.

www.intel.com

Country: California

Foundations date: 1968

Type: Public

Sector: Technology

Categories: Electronics


Intel’s Customer Needs


Social impact:

Life changing: self-actualization

Emotional: provides access, design/aesthetics, badge value

Functional: saves time, simplifies, integrates, avoids hassles, reduces effort, quality


Intel’s Related Competitors


Taiwan Semiconductor manufacturing Panasonic Fujitsu Foxconn Sony Canon

Intel’s Business Operations


Archetypes of business model design:

The business model archetypes include many business personalities and more than one business model linked to various goods or services. There is a common foundation behind the scenes of each unit, but from a management standpoint, each group may operate independently.

Augmenting products to generate data:

Due to advancements in sensors, wireless communications, and big data, it is now possible to collect and analyze massive quantities of data in a wide range of settings, from wind turbines to kitchen appliances to intelligent scalpels. These data may be utilized to improve asset design, operation, maintenance, and repair or improve how an activity is carried out. Such skills, in turn, may serve as the foundation for new services or business models.

Best in class services:

When a firm brings a product to market, it must first create a compelling product and then field a workforce capable of manufacturing it at a competitive price. Neither task is simple to perform effectively; much managerial effort and scholarly study have been dedicated to these issues. Nevertheless, providing a service involves another aspect: managing clients, who are consumers of the service and may also contribute to its creation.

Bundling:

Multiple products or services have been bundled together to enhance the value. Bundling is a marketing technique in which goods or services are bundled to be sold as a single entity. Bundling enables the purchasing of several goods and services from a single vendor. While the goods and services are often linked, they may also consist of different items that appeal to a particular market segment.

Consumerization of work:

Consumerization of IT (consumerization) is a term that refers to the process by which Information Technology (IT) begins in the consumer market and then spreads to business and government organizations, primarily as a result of employees utilizing popular consumer market technologies and methods at home and afterward bringing them in the workplace.

Corporate innovation:

Innovation is the outcome of collaborative creativity in turning an idea into a feasible concept, accompanied by a collaborative effort to bring that concept to life as a product, service, or process improvement. The digital era has created an environment conducive to business model innovation since technology has transformed how businesses operate and provide services to consumers.

Cross-subsidiary:

When products and goods and products and services are integrated, they form a subsidiary side and a money side, maximizing the overall revenue impact. A subsidiary is a firm owned entirely or in part by another business, referred to as the parent company or holding company. A parent company with subsidiaries is a kind of conglomerate, a corporation that consists of several distinct companies; sometimes, the national or worldwide dispersion of the offices necessitates the establishment of subsidiaries.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Decomposition:

Simplifying many product kinds inside a product group or set of goods. A technique for doing business analysis in which a complex business process is dissected to reveal its constituent parts. Functional decomposition is a technique that may be used to contribute to an understanding and management of large and complicated processes and assist in issue solving. Additionally, functional decomposition is utilized in computer engineering to aid in the creation of software.

Demand then made:

Early applications in distribution, production, and buying combined to form the supply chain. However, due to investments in information technology, cost analysis, and process analysis, traditional supply networks have been converted into quicker, cheaper, and more dependable contemporary supply chains. The second side of the value chain is marketing, sales, and service, which generate and maintain demand and are referred to as the market then made.

Demarketing:

Excluding current clients that are unprofitable or who do not adhere to company principles. Efforts directed towards reducing (not eliminating) demand for a product that (1) a company cannot provide in sufficient quantities or (2) a firm does not want to sell in a particular area due to prohibitively expensive distribution or marketing expenses. Increased pricing, less promotion, and product redesign are all common demarketing tactics.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Direct selling:

Direct selling refers to a situation in which a company's goods are immediately accessible from the manufacturer or service provider rather than via intermediate channels. The business avoids the retail margin and any extra expenses connected with the intermediaries in this manner. These savings may be passed on to the client, establishing a consistent sales experience. Furthermore, such intimate touch may help to strengthen client connections. Finally, direct selling benefits consumers by providing convenience and service, such as personal demonstrations and explanations of goods, home delivery, and substantial satisfaction guarantees.

Disruptive trends:

A disruptive technology supplants an existing technology and fundamentally alters an industry or a game-changing innovation that establishes an altogether new industry. Disruptive innovation is defined as an invention that shows a new market and value network and ultimately disrupts an established market and value network, replacing incumbent market-leading companies, products, and alliances.

Ecosystem:

A business ecosystem is a collection of related entities ? suppliers, distributors, customers, rivals, and government agencies ? collaborating and providing a particular product or service. The concept is that each entity in the ecosystem influences and is impacted by the others, resulting in an ever-changing connection. Therefore, each entity must be adaptive and flexible to live, much like a biological ecosystem. These connections are often backed by a shared technical platform and are based on the flow of information, resources, and artifacts in the software ecosystem.

Fast fashion:

Fast fashion is a phrase fashion retailers use to describe how designs travel rapidly from the catwalk to catch current fashion trends. The emphasis is on optimizing specific supply chain components to enable these trends to be developed and produced quickly and affordably, allowing the mainstream customer to purchase current apparel designs at a reduced price.

Guaranteed availability:

Guaranteed availability is a property of a business system that attempts to maintain an agreed-upon level of operational performance, often uptime, for a longer time than is typical. The idea is often linked with terms such as high availability and catastrophe recovery.

Ingredient branding:

Ingredient branding is a kind of marketing in which a component or ingredient of a product or service is elevated to prominence and given its own identity. It is the process of developing a brand for an element or component of a product in order to communicate the ingredient's superior quality or performance. For example, everybody is aware of the now-famous Intel Inside and its subsequent success.

Integrator:

A systems integrator is an individual or business specializing in integrating component subsystems into a unified whole and ensuring that those subsystems work correctly together. A process is known as system integration. Gains in efficiency, economies of scope, and less reliance on suppliers result in cost reductions and may improve the stability of value generation.

Layer player:

Companies that add value across many markets and sectors are referred to be layer players. Occasionally, specialist companies achieve dominance in a specific niche market. The effectiveness of their operations, along with their economies of size and footprint, establish the business as a market leader.

Licensing:

A formal agreement in which the owner of the copyright, know-how, patent, service mark, trademark, or other intellectual property grants a licensee the right to use, manufacture, and sell copies of the original. These agreements often restrict the licensee's scope or area of operation, define whether the license is exclusive or non-exclusive, and stipulate whether the licensee will pay royalties or another kind of compensation in return. While licensing agreements are often used to commercialize the technology, franchisees also utilize them to encourage the sale of products and services.

Make and distribute:

In this arrangement, the producer creates the product and distributes it to distributors, who oversee the goods' ongoing management in the market.

Open-source:

Compared to more centralized development methods, such as those usually employed by commercial software firms, the open-source model is more decentralized. Scientists see the open-source approach as an example of collaborative openness. Peer production is a fundamental concept of open-source software development, with deliverables such as source code, blueprints, and documentation made freely accessible to the public. The open-source software movement started as a reaction to the constraints imposed by proprietary programming. Since then, its ideas have extended to other areas, resulting in what is known as open cooperation. Typically, money is generated via services that complement the product, such as advising and maintenance.

Performance-based contracting:

Performance-based contracting (PBC), sometimes referred to as performance-based logistics (PBL) or performance-based acquisition, is a method for achieving quantifiable supplier performance. A PBC strategy focuses on developing strategic performance measures and the direct correlation of contract payment to success against these criteria. Availability, dependability, maintainability, supportability, and total cost of ownership are all standard criteria. This is accomplished mainly via incentive-based, long-term contracts with precise and quantifiable operational performance targets set by the client and agreed upon by contractual parties.

Product innovation:

Product innovation is the process of developing and introducing a new or better version of an existing product or service. This is a broader definition of innovation than the generally recognized definition, which includes creating new goods that are considered innovative in this context. For example, Apple launched a succession of successful new products and services in 2001?the iPod, the iTunes online music service, and the iPhone?which catapulted the firm to the top of its industry.

Regular replacement:

It includes items that must be replaced on a regular basis; the user cannot reuse them. Consumables are products utilized by people and companies and must be returned regularly due to wear and tear or depletion. Additionally, they may be described as components of a final product consumed or irreversibly changed throughout the production process, including semiconductor wafers and basic chemicals.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.

Take the wheel:

Historically, the fundamental principles for generating and extracting economic value were rigorous. Businesses attempted to implement the same business concepts more effectively than their rivals. New sources of sustained competitive advantage are often only accessible via business model reinvention driven by disruptive innovation rather than incremental change or continuous improvement.

Technology trends:

New technologies that are now being created or produced in the next five to ten years will significantly change the economic and social landscape. These include but are not limited to information technology, wireless data transmission, human-machine connection, on-demand printing, biotechnology, and sophisticated robotics.

Why Intel’s Business Model is so successful?

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