Intel Corporation’s success in the business is due to its capacity to address the strengths and weaknesses of the organization as well as to cope with the opportunities and threats prevalent in the external environment. The investors and managers use SWOT analysis tool to unveil the internal and external strategic factors. These factors can influence the business environment. The company is affected by these factors prevalent in the business environment. As Intel is the leading firm in the world’s microprocessor industry, it must develop a strategy to tackle its weaknesses besides threats. In the same way, the company must focus on its strengths so that it can exploit the prevalent opportunities in the business environment and market where competitors like AMD or Apple, and ARM are competing in desktop and mobile technologies, respectively.
The SWOT analysis has revealed that Intel has a dominant position in the market, whereby it can easily maintain this position. Nevertheless, the rising competition from other firms poses a futuristic threat to the company, so Intel must further strengthen its competitive advantage.
Strengths of Intel Corporation
Intel Corporation has the competitive advantage of the strongest foothold in the semiconductor market. This part of the analysis includes the strengths that enable the company to dominate the semiconductor business industry. The prominent strengths of Intel are:
- Strong collaboration with Microsoft
- Efficient fabrication processes
- Large economy of scale
The company has been dominating the desktop market due to its strong collaboration with Microsoft. This long-lasting partnership has benefited both sides. To demonstrate, Intel creates huge sums of profits by selling its processors specially designed for Microsoft Windows. Whereas Microsoft has the edge of stable and effective working of its operating system on the Intel processors. Therefore, this strength acts as a barrier to new entrants. The higher levels of efficiency in the fabrication process give Intel another advantage. The company supplies processors to the manufacturers for an assemblage of units on time. Above all, the company has developed impressive economies of scale due to its long history in the semiconductor business, which is not easy for other competitors to achieve. Therefore, this analysis has shown that the company’s successive alliance and superior operational capabilities have strengthened the business.
Intel’s Weaknesses
Although the company has successfully captured the top position in the semiconductor business industry, retention of this dominant position in the long term requires Intel to alleviate its weaknesses prevailing in the internal business environment. This section of SWOT analysis has exposed the weaknesses of the company:
- Trivial penetration into the mobile industry
- Relying on Windows systems
- Restricted diversification of business
Despite the success of its partnership with Microsoft, the company still suffers from weakness. The company is forced to focus on the manufacture of Intel units compatible with Windows operating systems. Therefore, Intel lacks the diversity of other business products. For instance, the company has failed to achieve success with mobile devices. Moreover, the company can suffer a decline in profits if the desktop market faces a decline. Furthermore, Intel has another weakness of restricted diversity. Diversity is imperative as it shields against the unseen risks in the business environment. Therefore, the company must devise and implement a successful strategy to mitigate its weaknesses.
Opportunities in the way of Intel
Intel can improve its performance and operations by availing itself of significant opportunities. This segment of SWOT analysis shows the opportunities in the way of Intel. These opportunities prevail in the external business environment of the company. The ensuing opportunities are worth mentioning:
- Diversification of the business
- New products for the mobile industry
- Processor’s flexibility
The diversity in the business is an opportunity for the corporation to expand its operations. For instance, Intel can devise new processes to penetrate appliances needed in a household. Moreover, the company can diversify its business through acquisitions of related companies. Intel has the opportunity in the name of diversity as the company has been focusing on a single domain of microprocessors. Furthermore, the company needs to penetrate the growing mobile industry to secure long-term stability and growth. In the same way, it must widen the scope of processors by making them more flexible to increase their use. Therefore, this segment of the SWOT analysis has revealed the opportunity for the company to widen its scope.
Threats faced by Intel
Intel has the potential to harm its business if it does not mitigate these prevailing threats. These threats are prevalent in the external business environment. This section of the SWOT analysis highlights the threats prevalent in the external industry environment. Intel is facing subsequent threats that could harm its business growth and revenue:
- Rapidly shifting market towards mobile computing
- ARM’s capture of the mobile processor market
- Competition with ARM and AMD in the PC industry
Intel has the dominant position in the PC industry mainly because it collaborated with Microsoft. Nevertheless, the growing market for mobile computing and the latest trends shifting to more compatible technologies can pose a significant threat to the company. In this scenario, the decline in PCs sale would result in a rise in mobile computing units. Intel is vulnerable at this point as the company has not secured any success in the mobile device market. ARM has increased the risks for Intel. ARM is providing major supplications of processors used in mobile technology and would not let Intel penetrate there easily. Likewise, AMD has captured some share in the PC market and can grow with time. ARM also has a high chance of growing in the desktop market. Therefore, Intel must gain a competitive advantage to minimize the threats prevalent in the business environment.
Recommendations
This analysis has revealed that the company has more stability and operational effectiveness in the business environment. The dominant position in the industry has shown that the company can withstand the adverse impacts of new entrants and competition. Nonetheless, the company is vulnerable to certain weaknesses due to its limited diversification. Low penetration in the mobile market has it vulnerable to new rising trends in mobile computing. The company has another threat in the force of competition in the PC industry. ARM and AMD pose market competition in the PC industry in the long run. However, the company still has many opportunities to overcome these threats.
This analysis has strongly recommended Intel develop its capacity in the mobile processing units. In this way, the semiconductor business giant can ensure competitiveness and profits in the long run. In the same way, the company must establish new collaborations with other industries to reduce its dependence on Microsoft. Thereby, the company can reduce the risks and dependence.
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