Example of Case Study about Intel

Should Intel Penetrate the Smartphone Market and Tablet Market?

1.0 Research Statement Proposition

The response to the study question whether Intel should penetrate the smartphone and tablet markets is clear – yes. This answer is based on the existing market demand and financial or investment considerations. The most recent report on Intel financials conducted in 2013 reveals that the company’s revenues have fallen by over 3% in the first quarter of the entire year and the company’s earnings declined by approximately 25% during the same year (Intel). The reason for declined revenues is that pc sales have significantly dropped in favor of smartphone and tablets. Additionally , the company’s overall earnings have continued to drop due to increased start-up costs relating to development of another generation of personal computer microprocessors (Intel). Therefore, Intel should penetrate the smartphone and tablet market in order to redeem and bolster its growth and profitability. The second reason is that the company should move towards consumer preference [Smartphone and Tablets] and begin creating a range of processors not merely for the non-public computer, also for the two devices in order to remain relevant on the market.

This shift would create a wider market niche so that the company would stop relying on laptop or computer market that's gradually decreasing and capture themselves the growing smartphone and tablet increasing market.

The technique for penetrating the market should really be through organic growth rather than takeover for just two reasons: to curb competition from their main rivals AMD and ARM by garnering a higher market share through its developed services and products and to avoid litigations and collapse that arise from business acquisitions. A 2008 plan by Intel to take over Spectra Watt Inc. assets to be able to start an autonomous company failed as the latter company filed for bankruptcy (Kapsch). This situation divulges the risks that could rise from acquisition attempts.

Acquisitions are mainly deemed to work in situations where the company is small or in a situation where the company has been shown to suffer from negligible growth that's likely to cause closure (Hess 58). Nevertheless , Intel is just a distinguished company considered to be the world’s largest producer of microprocessors and 3-D transistors. The company has designed and implemented a number of microprocessors present in most pcs including the famous computer brands like Apple, Dell, and HP. Organic growth process has over and over repeatedly proven that mature organizations can generate incredible growth through innovation (Kapsch n. p). Put simply, organic growth assists in augmenting the worth of the company in the long-term and also this not only helps you to build company reputation but inaddition it generates revenues needed for further investments. As an example, Samsung in mobile phones and Toyota in cars have now been able to produce innovative designs that have thrived in their respective markets.

2.0 Introduction

Although companies decide to remain in their primary business for anxiety about declining, research shows that you will find benefits that can come from diversifying and integrating into new spheres of business. The cause of diversifying should be to maintain company revenue growth by finding alternative revenue streams along with acclimatizing to regular business changes available in the market. The manner by which diversification does occur by either shifting through products or by organic or inorganic growth [mergers and acquisitions] depends on how big the company and the economic viability for diversification to bring intended changes (Jackson n. p). Therefore , attempts to penetrate a certain market or business are not a goody, but absolutely essential for company growth. The argument forms the basis of whether Intel should penetrate the smartphone and tablet markets and the response being an affirmative one. Intel operates in a technological industry and for this reason is obviously in constant attempt to invent superior products and services in line with other programs technologically advanced level products specially the computer and chip manufacturing industries.

Constant technological advancements call for diversification as individuals are shown to favor superior services and products that come in reasonable costs. According to Hill et al, diversification is really a process and when top managers want to pursue it they need to have the ability to distinguish profitable opportunities to penetrate new industries and to execute the strategies needed to make diversification profitable (Hill and Jones 352). Intel should penetrate the Smartphone and Tablet market through organic growth to keep up its competitive advantage also to increase its revenue collection. This paper will discuss why Intel should penetrate smartphone and tablet markets using organic growth and also other alternatives because of various because of business strategic models as well drawbacks that could ensue from this type of strategic decisions.

3.0 Investigation

3. 1 Does Intel have the opportunity for diversification?

Diversification is a business process where a company engages in design, manufacture, and marketing of a new product. There are namely two kinds of diversification: related diversification that entails remaining in the industry/market this 1 is used to and unrelated diversification that entails shifting from manufacture of a familiar product. Intel may be said to be undertaking related diversification because the company wants to produce processors [their primary product] but for different market segments [those using smartphone and tablets]. The other question we should be asking ourselves is whether Intel has the ability to design and produce processing chips for smartphone and tablets. If the answer is yes, then a company can undertake diversification process without serious impediment like designing the product or marketing.

The normal conception is that a company can only adapt well if it has matured and been proven to take action. For instance, how did Apple Inc. have the ability to come back from an nearly obsolete case in the late 90’s to become the best computer and technology manufacturer globally. The solution can be found in the sort of strategies utilized by the top management to increase company’s performance. The Strategic Management Model underscores that for companies to attempt successful diversification process they need to examine the environment by evaluating the competitive structure of the company’s industry including the company’s competitive position with that of its major rivals (Hill and Jones 18). Apple Inc. was able to remerge as a worldwide technological company because section of its agenda was to diversify through creating superior products in a market that seemed to have significantly more mediocre goods than high level ones. The emergence of Apple superior products in the twenty first century for instance the manufacture of new products like iPod, iMac, Mac Mini, Mac Book, and iPad from previous versions like power Macintosh and Newton Message Pad 100 discloses the company’s objective to satisfy consumer needs. The brand new Apple services and products not only serve customer’s needs like portability, easy to use devices [touch screens], varied applications, and diverse entertainment such as for example Mp3 player, however the devices will come in low-price which is what attracts consumers.

Just as, Intel underwent slow growth in early twenty first century adhering to a decline sought after for high level micro-processors leading its paid off market share and subsequent increase for the rival company AMD (McVeigh 6). Furthermore, Intel endured multiple litigations regarding business-related issues like microprocessor property rights and allegations from AMD company concerning unfair competition in (McVeigh 7). These litigations created finical constraints on the company in relation to legal bills that would reduce steadily the company’s aptitude to take on its rivals. However , the organization has always managed to rise from setback situations through strategic decision-making to restore the funds lost through litigation process and low demand. For instance in 2006 right after the lawsuits, a plan to bring back from prior litigation drawback saw Intel create the P6 and NetBurst that raised considerable revenues as a result of high demand brought on by the device’s small size (McVeigh)…