Intel has assured its success for a long time by addressing the threats and issues prevalent in its external business environment. These factors prevailing externally are affecting the company’s revenue and growth, as shown by this PESTLE/PESTEL analysis. This analysis has enabled the managers to examine the factors affecting the remote environment of the company. Intel needs to devise shrewd strategies to cope with these threats. As the company has secured a top position in the semiconductor business, it has developed the capacity to mitigate these negative influences. Moreover, the company has a position where it can effectively exploit the opportunities. To secure this end, the company needs evolution in its strategies and policies that could lead to the innovative production of products as the microprocessor industry is rapidly innovating and manufacturing new products with the latest patches.
The analysis has further revealed the dynamic nature of the microprocessor industry. The changing features of this business environment necessitate the company to devise policies while viewing these dynamic factors. The analysis further shows that the company is encapsulated by many external factors that determine the market culture of the company. Moreover, the company must ensure strategic policies to exploit the opportunities prevalent in the way of the company to ensure long-term business success. Intel must exploit new opportunities and expand its business to ensure diversification and less dependence on Windows units.
Political Factors affecting Intel’s business
The company is subject to the changes in political landscape or trends as revealed in this section of the PESTLE/PESTEL analysis. The impacts of political policies and regulations are shown in this section of the analysis. The following external factors are significant in the company’s business:
- Governmental adherence to the expansion of globalization (threat and opportunity)
- intergovernmental actions to deter monopoly (threat & opportunity)
- governmental support to protect intellectual property rights
The increased political support for globalization has presented growth opportunities for the company. Intel can expand its market growth thereby. But the threat of increased competition is also surfacing as it would give more opportunities to new players to enter the market. Moreover, the improved actions against the monopoly in the business of desktops and laptops. On the other hand, this same factor poses a threat to the business environment. Nevertheless, the company can increase its revenues by the protection of its intellectual property as enabled by the increased governmental support in this scenario. To demonstrate, the company could protect its innovative microprocessors technology from late fabrications. Therefore, this section of analysis has revealed certain threats in the external working environment of Intel Corporation.
Economic Factors Affecting Intel’s Business
The company is dependent on the effect of economic conditions across the globe. This section of the PESTLE/PESTEL analysis reveals the influence of these economic conditions on the working Intel business environment. The subsequent mentioned economic factors are playing significantly:
- Stability of Economic markets (opportunity)
- Rapidly growing economic markets (opportunity)
- Raised disposable incomes worldwide (opportunity)
Most economies of the developed markets are stable, thereby providing the company with an opportunity to grow. Intel can significantly increase its business growth and revenue through these economic conditions. For instance, the company can grow its economic share by increasing acquisitions and mergers in already stable economic conditions. Moreover, the growing economies of developing states have given another opportunity to the company to increase business operations beyond the boundaries. To demonstrate, the company can further expand its business into Asia or Africa as states on these continents have started purchasing computing devices with Intel processors on most of them. Thereby, the company can generate more revenue from this expansion. Furthermore, economic indicators have shown that people have an increased level of disposable income across the globe, with some exceptions. This trend has given more power to the public to buy electric devices, including laptops and PCs with intel processors on them. However, these economic factors indirectly impact the growth of the company as the direct buyers of the company’s processors or semiconductor chips are huge companies like Microsoft or other manufacturers. This section of the PESTLE/PESTEL analysis has revealed the growth opportunities for the company owing to these economic factors.
Sociocultural/Social Factors Affecting Intel Corporation
Social factors and their changing trends have a great capacity to impact the business of the company and their impact on the remote environment. The impacts of these sociocultural factors influencing the external remote environment of the company are considered in this section. The ensuing factors are prevalent in this regard:
- Reducing wealth disparities (opportunity)
- Trends of Ecological products (threat & opportunity)
- Increased interaction due to internet penetration (opportunity and threat)
The overall reduction in the social gap and the reduced levels of wealth disparities have capacitated more people to buy products. The public has increased buying capacity, and they can more easily purchase the products. Therefore, increasing the chances of selling Intel processors with computer devices. Moreover, the company also has the opportunity to increase the scale of its operations by enhancing eco-friendliness in its products. This feature can easily enhance the company’s capacity to grow revenue. Therefore, Intel must enhance its fabrication level of microprocessors with higher efficiency and energy levels. The company can threaten its integrity if this factor is left unaddressed. The other companies can increase their competitive advantage against the company by becoming more efficient and socially responsible. Even more, the increased scale of interactions due to internet penetration has another opportunity as well as a threat in the way of the company. Intel can benefit from this factor by creating more networks and communication gaming and can gain profits. This strategy must be addressed in its generic vision. Therefore, this section of the PESTLE/PESTEL analysis has shown the impacts of socio-cultural/social factors on the working of the company.
Technological factors affecting the business environment of Intel
The company is dependent on many technological factors which are prevalent in the remote environment of the business. This reaction highlights the most important factors that have the potential to affect Intel. The most significant elements contributing to this force are listed below:
- Penetration of Mobile Technologies (opportunity & threat)
- Growing investments in R & D (opportunity & threat)
- Rapid technological obsolescence (opportunity)
The rapid increase of mobile technology in electronics poses a significant threat to the company. This rising trend is a threat to the company because Intel has business operations in the manufacturing of processors for PC or laptops, the Windows operating systems. However, the company still has the opportunity to dive into this market through the manufacture of mobile phone processors. Therefore, the company can grow significantly in this quest. Moreover, the increased quest in R&D has posed a threat as well as an opportunity. The threat lies due to aggressive technological innovation in this market. The company can significantly benefit itself by adopting aggressive innovation to keep ahead of its rivals by introducing up-to-date editions of its products. Furthermore, the company has another opportunity due to technological obsolescence as it forces consumers to buy the latest computing devices. Therefore, this section of the analysis has revealed that Intel must strengthen its technological innovation to cash the opportunities lying in this field.
Environmental/Ecological Factors
The environmental changes and trends have a significant impact on the working of Intel. The semiconductor industry is vulnerable to these ecological factors, as shown by this PESTLE/PESTEL analysis. The ensuing elements are contributing to the force of environmental influence on the company:
- Rising ecological contamination (Opportunity & threat)
- Increased interest in eco-friendly programs (opportunity)
- Emphasis on social sustainability (opportunity)
The rising environmental contamination in our ecosystem has forced the world’s commercial activity to adhere to environmental preservation codes. Electronic activities need to decrease environmental contamination, mainly electronic waste, which is hazardous to our environment. For instance, consumers are discouraged from buying high-consuming computing devices. Therefore, the inability of the company to address this impact can reduce economic activity. In comparison, Intel can foster revenue by introducing energy-efficient devices. The company can further improve growth and revenue by adhering its operations and products to eco-friendly policies. In the same way, Intel can improve its image and market value by evolving strategies that can enhance social sustainability. These environmental factors are prevalent in the external business environment of the company. Therefore, as revealed by this section of the analysis, the company has significant chances to improve its growth and development by exploring the opportunities lying in its way.
Impact of Legal Factors
Legal factors prevalent in the business environment of Intel Corporation are highlighted in this aspect of the analysis. This section of the PESTLE/PESTEL states the effects of legal policies and regulations on the company. The remote environment of the company is subject to the following factors:
- Rising competitional regulations (threat)
- Improved global patent protection regulations (opportunity)
- Increasing waste disposal checks and regulations (opportunity & threat)
The increased competitional regulations can impact on the corporation’s business. Intel faces the direct consequence of this factor because of its monopoly over the entire Windows operating system. Despite the market share of AMD, Intel has the maximum market share in this market. Furthermore, the company is also vulnerable to criticism due to the prevailing arrangement. Nonetheless, the improved laws regarding international intellectual property rights have enabled the company to secure its latest designs of semiconductors or microprocessors. Furthermore, Intel needs to devise policies on waste disposal techniques as this has become a major concern for legal bodies regulating the environment preservation. These policies have imposed pressure on the company to ensure waste management during the manufacture and after the use of the product. However, Intel can address these concerns by raising its quality and maintenance standards that are eco-friendly. This PESTLE/PESTEL analysis reveals that the company is facing many legal challenges. However, it also can foster growth and development by adhering to these laws and regulations.
Recommendations
As discussed in detail, Intel is facing a plethora of threats as well as opportunities in the macro-environment of the company. As Intel enjoys a salutary position in the semiconductor business industry, the company can easily address these external factors to build its competitive advantage. The company must ensure diversification by mergers and acquisitions. The company must devise a strategy to penetrate the mobile device market to ensure a long-term advantage. Through this step, Intel can address the new rising trends in technology. Therefore, the company must capture the mobile processor’s market to foster growth and competitive advantage. In the end, Intel must cope with environmental trends and improve business sustainability.
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