PROJECT REPORT

ON

INTEL CO. STRATEGY ANALYSIS

SUBMITTED BY: -ADNAN MANZOOR SESSION: - (2012-2015) EMAIL: - [email protected]
DATE:- 03/01/2014

DEPARTMENT OF MANAGEMENT SCIENCES HERITAGE INTERNATIONAL COLLAGE SARGODHA

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Preface
It is truly an exciting time to be studying INTEL STRATEGY ANALYSIS The sailing crew on the cover faces many of the same goals and challenges as any organization in our unpredictable business environment. Success and possibly survival depend on a well designed boat with a carefully selected and thoroughly trained crew that understands the strategy of the race. They must be able to quickly adjust the sails, rigging, and rudder to keep moving forward and somehow gain a competitive advantage. Survey is an excellent tool for learning and exploration. No classroom routine can substitute which is possible while working in real situations. Application of theoretical knowledge to practical situations is the bonanzas of this survey. Without a proper combination of inspections and perspirations, its not easy to achieve anything. There is always a sense of gratitude, which we express to others for help and the needy service they render during the different phases of our lives. We would like to do it as we really wish to express my gratitude toward all those who have been helpful us directly or indirectly during the development of this project. First of all we wish to express our profound gratitude and sincere thanks to our esteemed learned Director Dr. Kamran Malik Director RIMT-IMCT, Mr. Fahad Nawaz, who allowed us to conduct the survey. we would like to thank our lecturer Ms. Binish Kawal , who was always there to help and guide us when We needed help. Her perceptive criticism kept us working to make this project more full proof. We thankful to her for encouraging and valuable support. Working under her was an extremely knowledgeable and enriching experience for us. We very thankful to her for all the value addition and enhancement done to us. No words can adequately express our overriding debt of gratitude to my parents whose support helps us in all the way. Above all we shall thank our friends who constantly encouraged and blessed me so as to enable us to do this work successfully.

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Approval
ADNAN MANZOOR a student of M.COM3rd semester of HERITAGE INTERNATIONAL COLLAGE SARGODHA session (2012-2015) bearing Enrollment No HICSGD12M.COM28, hereby declare that the Project report entitled STRATIGICAL ANALYSIS OF INTEL Is the outcome of own work and the same has not been submitted by any other student to any professor This Project Report is a record of independent research work done. Submitted to the DEPARTMENT OF MANAGEMENT SCIENCE

_________________ Principals Signature

________________ Professors Signature

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Dedication
The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.. THIS PROJECT IS DEDICATED TO OUR MOST RESPECTFUL AND HONORABLE PROFESSOR WHO ALWAYS MOTIVATE US TOWARDS POSITIVE THINKING AND TOWARDS SUCCESS

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Acknowledgements
We are grateful to ALLAH Almighty who blessed us With hearing and along the mind to make work as they Should, who has given us boundless affection and depth Of feelings and who has blessed us with the courage for Fulfilling the arduous writing of this project We are extending our hearty thanks and gratitude to Miss Binish for his guidance and corporation, who I am highly offended by the total lack of acknowledgement of my contribution to success.

God help those who help themselves

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Executive summary
Strategic management is considered as the key factor which determines whether an organization is to succeed or if it is to fail. Thus believing that an organizations sufficient internal resources and ideal external environmental factors will ensure ones success, it is short sighted. For only formulation and implementation of sound strategic management practice and policies can ensure ones future success. However a future is never guaranteed thus the formulation and implementation is not alone sufficient, hence and organization must vigilantly analyze and be aware of its ever changing internal and external environmental factors. The following study intends to identify and assess the internal strengths and weakness and external opportunities and threats for the organization, thus illustrate the strategic aspects currently impacting Intel. Furthermore critically evaluating Intels futuristic orientation in contrast to its main competitor and identifies and elaborates the strategic moves of Intel towards capturing business in the US (United states) and international markets. Moreover the study analyze the effectiveness of the current strategies adopted by the organization in terms of its past and present financial and none financial performance thus present the reader with the necessary strategic recommendation needed to enhance the effectiveness and efficiency of Intel and the future strategic path needed to be taken to maintain their competitive advantage. The findings of this study indicates that regardless of various criticisms from unfavorable media, small town communities and various labor unions, Intel has achieved substantial growth in its 50 years of operational history via its sound strategic management operations and policies and practices. However the author recommends that the organization should indentify and thus re-modify its strategic approaches towards its role as environmentally sustainable and socially responsible global organization and pay furthermore close attention to its International human resources and Local human resources within the US.

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Table of Contents
Introduction ...................................................................................................................................... 1 Introduction ........................................................................................................................................ 10 History ................................................................................................................................................. 10 Recent Development .......................................................................................................................... 10 Product Line ........................................................................................................................................ 11 KEY TOWARDS STRATEGIC PLANNING ............................................................................................... 12 Vision Statement ................................................................................................................................ 12 Mission Statement .............................................................................................................................. 13 Values.................................................................................................................................................. 14 Objectives ........................................................................................................................................... 15 Goal ..................................................................................................................................................... 15 Programs ............................................................................................................................................. 16 Strategy ............................................................................................................................................... 16 Input Stage ...................................................................................................................................... 16 IFE ....................................................................................................................................................... 17 EFE....................................................................................................................................................... 18 CPM ..................................................................................................................................................... 19 Matching Stage ................................................................................................................................ 20 SWOT .................................................................................................................................................. 21 BCG MATRIX ........................................................................................................................................ 23 Micheal Porters 5 forces .................................................................................................................... 25 Decision Stage ................................................................................................................................. 27 PEST Analysis ...................................................................................................................................... 28 Space Matrix ....................................................................................................................................... 30 QSPM .................................................................................................................................................. 31 GE Matrix ............................................................................................................................................ 33 Grand Strtegy Matrix .......................................................................................................................... 35 Conclusion ...................................................................................................................................... 37 References ...................................................................................................................................... 38 Page 7 of 39

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NTRODUCTION

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Introduction
Founded in 1984 by Michael Dell No.1 PC provider in the U.S. and No.2 worldwide Based in Round Rock, Texas Employs more than 82,700 people worldwide Grew during the 1980s and 1990s to become a brand Direct Business Model is the foundation for Dells business. Dell maintains a consistent focus on offering the best value and customer. Dell is a trusted technology innovator with a diversified, comprehensive IT portfolio. Dell is a global company committed to its customers and employees

History
In 1996, Dell began selling computers via its web site Introduced the 316LT, the companys first notebook computer in 1989 Joined the top-five computer system makers worldwide in 1993 Earning app. $1 million per day 7 months after the launch of dell.com in 1996 Introduced E-Support, an online tool to provide technical support to customers 1999 1999, Dell overtook Compaq to become the largest seller of personal computers in the US 2007, Dell set a goal of becoming the greenest technology company on Earth for the long term. The company launched a zero-carbon initiative For the first time, Dell achieves No. 1 ranking in global market share in 2001 2003, name was changed to "Dell Inc." 2006, Dell purchased the computer hardware manufacturer Alien ware January 2007, started a turnaround plan that promises to yield $3 billion in annual savings over the next three years.

Recent Developments

In January 2009, Dell announced that they will withdraw all manufacturing from Limerick and move it
to its new plant in the Polish city of Lodz by January 2010. Raised their cost-reduction target to $4 billion.

Dell also announced that it aimed to become a "one percent company giving away 1 % of pretax
profits to education and digital inclusion projects mainly in Emerging markets, by February 2010. Page 10 of 39

Product line

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KEY TOWARDS STRATEGIC PLANNING

VISION STATEMENT
Through effective and strategic community partnership, dell supports educational services programs that address the critical and most basic technology access needs of its neighbours in Dell communities prerequisite to success in digital world. Dell provides a classic example of how the principles of strategic management have been used to translate an innovative vision into a successful and sustainable enterprise. Their vision statement basically tells the way they do their business. They want to be successful in the digital world for this they rely on latest technology. Dell provides quality products to cater the needs of the people. In intend to build good relationship with their customers and suppliers.

MISSION STATEMENT
To provide customers with superb value, high quality, relavent technology, customized systems, superior service and support and products and services that are easy to purchase and use.

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VALUES Their first priority is to be a successful business and that means investing for growth and balancing short term and long term.

OBJECTIVES
Following are the objectives of Dell Corporation 1. Modify laptop designs according to students preferences. 2. Double laptop sales in student market. 3. Increase revenues by 25% by the end of the second year of launching.

4. Develop a promotional campaign to promote the modified laptops.

5. Increase awareness of the existent agency project objective research strategic plan conclusion.

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GOALS
Goals are the specific interim or the ultimate time based measurement to be achieved. While implementing strategies in pursuit of companies objectives. The goal of the organization are set consistent , achievable and realistic. As per surveys the present major goal of the organization is to adopt the best technology and appoint few more personnel that would bring efficiency in the organization.

PROGRAMS
Last but not the least program plays a significant role in maintaining a smooth track within the organization. Dell has got an implementation plan followed up by the above strategic plan. The Program of Dell creates opportunities to develop real-world skills in an environment that encourages personal and professional growth and gain exposure. It learns the ins and outs of one of the high-tech industries in the same sector.

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STRATEGY
To do business with its customers one on one through the phone and internet. In doing so, Dell will meet its customerss expections of : Highest quality. Leading technology. Competitive pricing Individual and companys accountability. Best in class service and support Flexible customer capacity Financial stability. The direct relationship continues throughout the customer experience

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I S
nput

tage

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Internal Factor Evaluation (IFE)

Key Internal Factors Strengths Number of Products Advance Technology Supply Chain Management Financial Backing Experience Top Management

Weight

Rating

Weighted Score

0.1 0.05 0.05 0.2 0.2

4 4 3 4 3

0.4 0.2 0.15 0.8 0.6

Weakness Tall Organization Structure High Operating Expenses High Cost of Production Long term strategies Only few products Total 0.1 0.05 0.05 0.1 0.1 1.00 2 2 2 2 1 0.2 0.1 0.1 0.2 0.1 2.85

According to the IFE matrix rating (1) means major weakness, (2) means minor weakness, (3) means minor strength, (4) means major strength

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External Factor Evaluation (EFE)

Key External Factors Opportunities Hygiene Consciousness Increasing Population Innovation (R&D) Product Diversification Explore New Markets

Weight

Rating

Weighted Score

0.2 0.15 0.10 0.10 0.05

4 3 2 4 4

0.8 0.45 0.2 0.4 0.2

Threats Product smuggling Immitation of Products International Trends Local Competition Total 0.15 0.10 0.05 0.05 1.00 1 3 3 4 0.15 0.3 0.15 0.2 3.10

According to the IFE matrix rating (1) means major weakness, (2) means minor weakness, (3) means minor strength, (4) means major strength

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COMPITITIVE PROFILE MATRIX (CPM)

INTEL Critical Success Factors Weight Rating W. Score Rating

AMD W. Score Rating

APPLE W. Score

0.0 to 1.0 Market Share Inventory system Financial position Product Quality Consumer Loyalty Relationship with Suppliers Global Expansion Organization Structure Product Capacity Advertising Efficient Cost Management Product R&D Totals 0.12 0.05 0.20 0.15 0.07 0.03

1 to 4 3 3 4 4 3 3 0.36 0.15 0.80 0.60 0.21 0.09

1 to 4 2 2 2 3 2 3 0.24 0.10 0.40 0.45 0.14 0.09

1 to 4 1 2 3 3 1 2 0.12 0.10 0.60 0.45 0.07 0.06

0.06 0.02

3 3

0.18 0.06

1 2

0.06 0.04

1 1

0.06 0.02

0.05 0.15 0.05

3 2 3

0.15 0.30 0.15

2 4 3

0.10 0.60 0.30

2 3 2

0.10 0.45 0.20

0.05 1

0.15 3.20

0.04 2.56

0.04 2.27

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atching

tage

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SWOT ANALYSIS

STRENGTH No inventory buildup Acquition with Equalogic Quality product and service Whole world focus Brand name Customer service Cost efficiency Direct sell model=customization + fast+ delivery + low cost Winning culture latest technology First mover advantage e-commerce capabilities: www.dell.com Buid to order manufacturing process Product design+after sales service Expert Supply Chain Management
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WEAKNESS No proprietary technology High dependency on component suppliers occasional product recall.Eg.In 2004 Dell had to recall 4.4 million laptop adapters because of a fear that they could overheat, causing electric shocks or fires. unable to switch supply dues to the lack of large suppliers in the World high attrition rates among visitors to Dell.com no physical presence ofservice centres slow in introducing fancy features Lack of innovation

OPPORTUNITIES Network-internet, intranet and extranet Developing nations market Low costs and growing advanced technology Growth in business, education and government markets Global wide access to customers and market. Expansion Increasing income of consumers Globalisation THREATS Competition Currency fluctuation in countries outside the US Political instability Tariff trade barriers Recession

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BCG MATRIX MODEL

No strategic management or marketing text appears to be complete without the inclusion of the Boston Consulting Group (BCG) growth-share matrix. The BCG Growth-Share Matrix is based on two dimensional variables: relative market share and market growth. They often are pointers to healthiness of a business (Kotler 2003; McDonald 2003). In other words, products with greater market share or within a fast growing market are expected to wield relatively greater profit margins. The reverse is also true. Lets look at the following components of the model:

Market Growth
Market growth axis, correlates with the product life cycle paradigm, and predicates the cash requirement a product needs relative to the growth of that market. A fast growing market is generally considered attractive, and pulls a lot of organisations resources in an effort to increase gains. A case in point is the technological market widely consider by experts as a fast growing market, and tends to attract a lot of competition. Therefore, a product life cycle and its associated market play a key role in decision-making.

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CASH COWS
These products are said to have high profitability, and require low investment for the fact that they are market leaders in a low-growth market. This viewpoint is captured by the founders themselves thus: The cash cows fund their own growth. They pay the corporate dividend. They pay the corporate overhead. They pay the corporate interest charges. They supply the funds for R&D. They supply the investment resource for other products. They justify the debt capacity for the whole company. Protect them (Henderson 1976). According to experts (Drummond & Ensor 2004; Kotler 2003; McDonald 2003), surplus cash from cash cow products should be channelled into Stars and Questions in order to create the future Cash Cows.

STARS
Stars are leaders in high growth markets. They tend to/should generate large amounts of cash but also use a lot of cash because of growth market conditions. Dell computers are placed in this stage which possesses a large share in the rapidly growing market.

QUESTION MARKS
Question Marks have not achieved a dominant market position, and hence do not generate much cash. They tend to use a lot of cash because of growth market conditions. Consider HewlettPackards small share of the digital camera market, behind industry leader Canons 21% (Canon 2006). However, this is a rapidly growing market. E.g Dell Mobiles are newly introduced in the market and thus possess low market share in a growing Market.

DOGS
Dogs often have little future and are big cash drainers on the company as they generate very little cash by virtue of their low market share in a highly low growth market. Thus to conclude with dogs these are the products that should be divested because it is these are of no good for the company and has become a kind of liability for Dell Computers.

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MICHAEL PORTERS MODEL OF COMPETITIVE ADVANTAGES

Threat of New Entrants: MODERATE The entry of new comers is quite difficult because of the entry barriers that Are caused by: Buyer loyalty Brand name Low price Award winning customer service Customization Decreasing profitability shows that there is a threat of new entrants HP overtook dell few yrs back Rivalry: HIGH Price War Decreasing profitability Low differentiation However, in the midst of sever competition, Dell can still gain market share from other competitors. That proves Dells business strategies have been successful. Page 25 of 39

Threat of Substitutes: LOW Strong presence of PCs throughout society One computer for every three people in the U.S. Customer service Direct Business Model However, high price, and lack of software support prevent people from switching to Apple system. Bargaining Power of Buyer: High Highly price sensitive The cost leader has high market share which leads to high bargaining power relative to its suppliers Reliability and customer service become important factors. Dells products are very reliable and customer service is outstanding. These two factors help Dell to create certain brand royalty. But thats given the fact that the Company set the prices very low. If the prices are raised too high, customers will not hesitate to switch.

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ecision

tage

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PEST ANALYSIS

A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:

Political Economic Social Technological

POLITICAL
The political environment in the US has been changing abruptly in the previous year. Dell being an integral part of this economy has also been greatly affected by these changes and has not been able to counter them. Changes in the legislation and laws of the US govt. have tried to revive the PC business but the reciprocations have been less then what was expected. The company has been able to beat the expectations of Wall street who predicted more dip by posting less losses by utting costs. The conservatism that exists in the consumer spending has been increasing which
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has adversely affected Dells performance. Issues of environment policies has also affected Dell as Dell came under significant pressure from environmental groups across the US to assume responsibility for its old products and this experience sensitized company officials to the risks and opportunities of state and federal e-waste regulations and the need to take proactive steps against them.

ECONOMIC
High tarrifs on IT products makes Dell difficult to enter other markets apart from USA . since most of the population of the world is young and adaptive to change in technology, dell aimed to manufacture its products which are more user friendly and can be afforded by young professionals, because purchasing power of working population saw an increase over the past few decades. Since the economy saw a change due to the meltdown and recession, dell also had to modify some of its policies to cope up with the changing scenario.The change in the US economy also effected Dell with it bring change in its core policies of inventory and credit management of receivables and inventory conversion days to decrease its operating cycle and thus reduce cost.

SOCIAL
Increase of younger population and working population have led to the increase of the use of computers. A technological revolution has been around the corner, people have become techsavy ,that have resulted in the increase in the demand for computers .These days people have time constrains and as a result of it they prefer to buy the product online ,which has given Dell an advantage over others because of dell.com.

TECHNOLOGICAL
Tecnological changes are happening at a very fast rate due to which Dell is able to provide advanced technology products to the customers.As a result of chnological changes Dell has also increased their product line.It is adopting to the echnological changes as he old technology is becoming obsolete.One of the most important affets of technological changes that have led to the increase of the demand of Dell computers is their Direct Business Model.They have excellent ecommerce capabilities, which can be seen with the success of the dell. The recent chnological changes can be seen in their recent products like New PowerEdge Servers, New Enterprise Computing Portfolio, Innovation Aids Recovery, Ultra-Thin Laptop, Adamo,which will be in the market very soon. Dell could exploit the network-internet,extranet to reach the corners of the world.

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SPACE MATRIX

Y axis: 2.5 + (-0.5) = 2.5 X axis: 3+ (-1) = 2

Conservative

FS

Aggressive

CA

IS

Defensive

ES

Competitive

QSPM
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Integration Key Factor Opportunities: Weight AS TAS

Intensive AS TAS

Hygiene Consciousness Increasing Population Innovation (R&D) Product Diversification Explore New Markets

0.2 0.15 0.10 0.10 0.05

2 3 4 -

0.30 0.30 0.40 -

2 2 2 3 1

0.20 0.40 0.20 0.30 0.05

Threats:

Product smuggling Increase demand for Antibacterial Soaps Immitation of Products International Trends Local Competition Total

0.15 0.05

1 1

0.15 0.05

1 2

0.15 0.10

0.10 0.05 0.05 1.00

3 4 4

0.30 0.20 0.20 3.85

2 -

0.4 5.15

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Integration Key Factor Strengths: Weight AS TAS

Intensive AS TAS

Number of Products Advance Technology Supply Chain Management Financial Backing Experience Top Management

0.1 0.05 0.05 0.2 0.2

2 3 2 3 -

0.20 0.15 0.10 0.60 -

3 3 3 4 3

0.30 0.15 0.15 0.80 0.60

Weaknesses:

Tall Organization Structure High Operating Expenses High Cost of Production Increasing Number of Small Competitors Unbranded Products Total

0.1 0.05 0.05 0.1

3 2 3

0.30 0.10 0.30

2 3 2 -

0.20 0.15 0.10 -

0.1 1.00

0.20 1.95

0.15 2.65

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GE MATRIX
The 9 cells of ge matrix are grouped on the basis of low to high industry attractiveness and week to strong business strength and competitive position. There are 3 zones indicating 3 different combinations.

GO AHEAD
Under these phase the signal is to proceed and take decisions such as Dell has become universally acceptable and now it should go ahead and take up more marketing development and expansion .

Wait and Watch

These is the 2nd zone of ge matrix, this indicates hold and maintain current strategy.

STOP
Coming to the 3rd zone it gives signal to stop under the product of Dell Corporation Thus to conclude with ge matrix it allows the user to select whatever criteria they feel are more appropriate to their business situations.

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Dell Corporation possess highest attraction through its highly innovative and technical products of mobile and computers and stands first in the Ranking of Revenue and hence placed in the category as shown in the above table.

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GRAND STRATEGY MATRIX

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Total score of INTEGRATION STRATEGY = TAS OF EFE+TAS OF IFE = = Total score of INTENSIVE STRATEGY 3.85 5.8 + 1.95

= TAS OF EFE+TAS OF IFE = = 5.15 7.8 + 2.65

INTERPRETATION As the total average score of intensive strategy(market penetration, market development, product development) is high so it is more favourable for unilever Pakistan lmtd to adopt this strategy.

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Conclusion
This report have the Study internal strengths / weakness and external opportunities and threats assessment for Toyota, organization considered as global business titan and classified as the largest retailer in the United States. The SWOT assessment revealed that the strategic factors that has the greatest impact on the organizational performance. Furthermore, this study evaluates and understands the futuristic orientation of the organization in comparison to Target Corporation, the organizations main competitor. The analysis revealed both organizations despite Toyota not possessing a clear vision statement does indeed posses clear and specific futuristic orientation regarding their respective future strategic direction. The study moreover identifies and explains each strategic move the organization has implemented in all levels of the organizational structure in order to become the market leader. Thus critically evaluating the effectiveness of these strategies in terms of Toyotas financial and none financial performance, which indicates that regardless of various criticism from unfavorable media, small town communities and various labor unions, Nokia has achieved substantial growth in its 50 years of operational history via its sound strategic management operations and policies and practices.

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REFERENCES
1) http://en.wikipedia.org/wiki/Intel 2) http://www.intel.com/content/www/us/en/education/k12/design-anddiscovery.html 3) http://en.wikipedia.org/wiki/Intel_8080 4) http://techpinions.com/the-strategic-importance-of-intels-new-ceo/16111 5) http://www.intel.com/content/www/us/en/intelligent-systems/previousgeneration/intel-ixp4xx-intel-network-processor-product-line.html 6) http://blogs.intel.com/technology/2009/06/over_the_last_year_or/ 7) http://pubsonline.informs.org/doi/abs/10.1287/inte.1120.0641?journalCod e=inte 8) http://www.altera.com/devices/processor/intel/e6xx/proc-e6x5c.html 9) http://en.wikipedia.org/wiki/Intel_8086

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RECOMMENDATION & SUGGESTION

1. Signature:_______________ 2. Signature:_______________ 3. Signature:_______________

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