Analysis of Intel Corporation using the Porter’s 5 forces Model - Essay
Analysis of Intel Corporation using the Porter’s 5 forces Model Intel Corp is an American company famed for making semiconductor chips, microprocessors, network interface controllers, flash memories, graphic chips and other components found in many computers and mobile phones. The porter’s Five Forces Model is a suitable method of analyzing Intel Corp’s business strengths and weaknesses. The porter’s five forces model is a tool based on five businesses forces to access where adjustments are required in a given business situation. First of all, short historic overview is needed:
1980 – “Project Cursh” +Design Wins (Intel and IBM): IBM open standard, success in format war, being a free rider by design wins.
1983 – License Control: restrict licenses, more design win and more revenue, set up the industry standard
Intel vs AMD: 1990 Red X camping - specifically against AMD and the “Intel Inside” end-user branding and advertising program.
1994: Pentium Bug: good response by product flow and effective end user promotion.
1990—95: Architectural competition: RISC vs CISK.
The first of the five forces affecting Intel Corp’s business is supplier power. The basic material used to make semiconductors is silicon which is a constituent of sand and is abundant in nature. Suppliers cannot alter the prices of this primary commodity to significantly influence Intel Corp’s business because the company can afford to have several suppliers. Other suppliers provide the metallization required between the silicon layers and the plastics for the packaging of the fully manufactured processors. These too are abundant and Intel Coro can afford to have several suppliers at considerable prices. The competition rivalry is another force that affects businesses. Intel Corp continues to enjoy large market shares with minimal competition. In 2011, the company commanded 79.3% of the PC processors market and 84.4% of the of the mobile PC microprocessors.
1980 – “Project Cursh” +Design Wins (Intel and IBM): IBM open standard, success in format war, being a free rider by design wins.
1983 – License Control: restrict licenses, more design win and more revenue, set up the industry standard
Intel vs AMD: 1990 Red X camping - specifically against AMD and the “Intel Inside” end-user branding and advertising program.
1994: Pentium Bug: good response by product flow and effective end user promotion.
1990—95: Architectural competition: RISC vs CISK.
The first of the five forces affecting Intel Corp’s business is supplier power. The basic material used to make semiconductors is silicon which is a constituent of sand and is abundant in nature. Suppliers cannot alter the prices of this primary commodity to significantly influence Intel Corp’s business because the company can afford to have several suppliers. Other suppliers provide the metallization required between the silicon layers and the plastics for the packaging of the fully manufactured processors. These too are abundant and Intel Coro can afford to have several suppliers at considerable prices. The competition rivalry is another force that affects businesses. Intel Corp continues to enjoy large market shares with minimal competition. In 2011, the company commanded 79.3% of the PC processors market and 84.4% of the of the mobile PC microprocessors.
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