Case Study on "Intel Corporation"

Case Study 15 pages (4271 words) Sources: 12

[EXCERPT] . . . .

Intel Corporation is one of the most successful companies in the world. The company has specialized in several different types of processors over the years and has proved itself as an industry leader. The purpose of this discussion is to examine Intel Corporation. The research will be derived from the case study "Intel Corporation: 1968-2008." The investigation will contain a brief history of the company, a SWOT Analysis, and Recommendations.

History, Development and Growth

Intel was created in 1968 by Robert Noyce and Gordon Moore. At the time he pair were serving as executives for Fairchild Semiconductor (Hill & Jones). Both of these executive were well-known for their expertise in the areas of management (Noyce) and research and development (Moore). When both executive became discontent with the management practices that were imposed on the company form executives in New York, they decided to explore a new venture (Hill & Jones). Because the two executive had such a good reputation in California, they were able to raise more than $2 million in one day. The new business venture involved the development and ultimately the distribution of silicon memory trips. The magnetic-based memory devices that were popular and widely used at the time were slow and the two executives believed that they could make computers run faster with a silicon device. This idea was the beginning of Intel which eventually became the leading manufacturer of computer chips in the world.

Noyce and Moore had a great deal of prior experience, in addition the research to create this type of chip was available but the research had been conducted at Fairfield, the company that Noyce and Moore had abandoned (Hill & Jones). In order to get access to the research Noyce and Moore the MOS research had to be commercialized and this commercialization was the foundation that Intel was built upon.

Crucial to the development of the company was to the employment of certain personnel. Andy Grove was one of the individuals most critical to the development of the company early on. Grove was known for his discipline and his propensity to encourage all the employees he managed to also have a similar amount of discipline. Grove was also extremely controlling as it pertained to the manner in which he dealt with managers. He required managers to make revenue and costs projections designed to ensure that capital was being properly allocated and utilized.

Although Intel has some problems in the development of the DRAM which was silicone based, the company was ultimately successful in the development of the product. Intel found a way to create the product while also keeping the secrets of how to develop the product a closely guarded secret from competitors. By 1970 Intel had created the 1103 a device that could hold four times as much as the highest capacity semiconductor. By the end of 1971 the 1103 device was being used by 14 of the 18 leading mainframe computer makers.

Intel continued to build and develop unique products hat made computing easier and made way for new technologies. Some of the companies most important and most successful creation has been Read Only Memory Chips (ROM) and the microprocessor. The development of ROM was important because it allowed for programming to be permanently burnt into a circuit. However, this was also problematic because if there was a programming mistake the chip would be rendered useless because it could not be erased. This led to the development of the EPROM chip which was erasable. The EPROM chip became extremely popular and for a two-year period Intel was the only company that manufactured the chip. Intel also developed several microprocessors of various speeds. Microprocessors would prove to be a critical component in the development of personal computers.

By the middle of the 1970's the personal computer industry was forming and gaining momentum. Intel saw an opportunity to sell its products in an entirely new way that would ultimately be one of the most successful endeavors of the company. The first personal computer was the MITS Altair and it utilized a Intel microprocessor. Ultimately Apple and IBM also developed personal computers that used Intel processors. At the same time a company named Microsoft was also gaining ground and respect in the computer industry. Intel and Microsoft became intricately linked when Microsoft had to develop MS Dos to run on Intel microprocessors. Over time many different companies formed and the PC industry began to blossom and also fragment. The major players were IBM, Compaq, Dell and Zenith.

By 1982 nearly 70% of all microprocessors in personal computers were manufactured by Intel. The other company with the remaining share of the market was AMD. Two years later Intel was contemplating what should be done with its DRAM division. Over time the company had begun to share the market for DRAMS with some Japanese companies who also manufactured DRAMS. As a result the profits that Intel was realizing from DRAM sales had decreased dramatically. The company decided to et out of the DRAM business and concentrate on other areas of business.

Ultimately Andy Grove became the CEO of Intel in 1987 when Gordon Moore gave up his position. Having abandoned DRAMS, Grove wanted the company to focus on the development of fatster microprocessors. Grove understood that users were anticipating that they would have access to faster machines that would have the capacity to also hold more information. This led to the development of the i36 microprocessor. This processor changed Intel forever and led to the company having $2.9 billion in sales in 1988 when several computer manufacturers including Compaq, began to sell Pc's featuring Intel processors,

Internal Strengths and Weaknesses

Strengths

1 Innovation. Intel is a company that has many internal strengths. The primary strength is innovation. Since the very inception of Intel the company has constantly been the first the develop and manufacture various components for computers. The creativity of the company's founders and the people that they hired has benefitted the company immensely. Additionally the company has been able to develop products that were not only revolutionary, but also needed and necessary at the time that they were developed. Intel understood the envirpnment and worked to develop products that would fulfill certain needs throughout the entire industry.

2. Appropriate Management Style. Another internal strength at Intel was efficient management, foresight and ambition. Andy Grove, although controversial, had a firm rasp on the people he was hired to manage. He understood that the absence of discipline would mean the demise of the company. As it pertains to foresight Noyce and Moore understood that there were certain needs in the industry that were not being met. They foresaw these needs and aimed to manufacture products specifically designed to meet those needs. In doing so the company was able to develop products that were unique and allowed them to maintain a competitive advantage. The people of Intel also displayed and continue to display a great deal of ambition. The company seems passionate about inventing the future and continuing to transform the relationship between people and technology. Although the company has made many strides and has already transformed the capabilities of computers

3. Brand Name Reputation. The efficiency and quality of the products that the company produces has contributed to the type of reputation that the company has throughout the world. As a result of producing quality products the company has been able to garner a great deal of respect and a good reputation in the industry. This has led to the development of brand loyalty amongst the computer companies that use Intel products and the public who purchase computer products that contain Intel components.

4. Research and Development- a great deal of Intel's success over the years can be attributed to research and development. Not only has the company been able to identify the needs of users, it also has the capacity to develop products that run faster and smoother with each generation. This ability has allowed to company to create microprocessors that get smaller and faster with each generation. Intel continues to invest a great deal of money into research and development. According to the case study, approximately $5.5 billion was spent on R&D in the 2000's. This commitment to research and development has resulted in the creation of products that are second to none.

5. Marketing/Relationship with PC companies- Intel has also done a superb job of marketing its products and developing relationships with PC manufacturers. The fact that the company had a monopoly on some of the products that it has developed over the years has a great deal to do with the manner in which the products were marketed and the relationships that already existed between Intel and PC manufacturers. As it pertained to marketing, campaigns such as Intel Inside marked a new type of recognition that people were beginning to purchase computers directly from manufacturers. This meant that Intel had to market directly to customers. Intel Inside was used as a… READ MORE

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