Question

Case Study: Identifying and creating new markets - a new strategy for a global leader

Introduction

Nearly everyone is aware of Intel. It is the world's fifth most valuable brand valued at around $35 billion. Most of the world's personal computers are driven by Intel microprocessors.

By concentrating on producing great microprocessors Intel was able to leave its competitors behind. The company invested billions of dollars in highly productive manufacturing plants that could produce more processors in a day than some of their rivals could produce in a year.

Today Intel is continuing to raise the bar. In January 2006 the company launched its new strategy based on identifying and creating new markets. Instead of just focusing on personal computers (PCs) Intel will play a key technological role in a range of fields including consumer electronics, wireless communications and healthcare.

Intel has been one of the world's high achieving businesses. Its global appeal is not surprising. In recent years almost every time you opened up a laptop you would see that it was labelled 'Intel@ Inside'. Seeing this, the user knew that they had a high performing and reliable computer.

We all want to be able to use more powerful technology, which is simple to operate, and helps us to do things without having to think about it. However, Intel has moved on. The problem with simply being a producer of processors is that other firms can move into your market. Once they produce similar products the only way you can differentiate is by offering lower prices.

Intel's new strategy is to create lots of different types of chips and software and then combine them together into platforms. A platform is an integrated set of proven technologies designed to work together. They provide people and businesses with improved communications and computing capabilities. These platforms will enable Intel to bring added value for consumers, win a larger share of consumer expenditure and increase revenue.

Platforms will make life easier for people in a range of settings from the home, to business, and medical settings. Intel's vision involves giving people access to easy-to-use technologies through these platforms. It is seeking to continually satisfy customer requirements by producing a range of new and exciting products.

Developing a new strategy

Intel is an 'ingredient brand'. Its products and processors form part of the products that consumers purchase. Building key relationships with leading electronic firms such as Sony and Philips is an important strategy. The aim is to provide the manufacturers of products such as laptops, mobile phones and entertainment personal computers with integrated packages of chips and software - in other words a complete solution.

A key part of Intel's more integrated platform strategy involves the development of several technologies. These improve processor efficiency and allow computer users to take better advantage of:

multi-tasking

security

reliability

manageability

wireless computing capabilities.

Intel's strategy is to be at the heart of new developments in home entertainment, security, medical care, etc. Great results are achieved through developing the right products for the right markets before competitors do so.

Restructuring Intel around its market

Intel built its early success on providing ingredients for personal computers with its prime driver being technology. It was dominated by engineers and worked closely with Microsoft and PC manufacturers such as Dell, Compaq and IBM.

The new strategy continues the emphasis on producing excellent products. However, there is now a strong focus on marketing- finding out what customers want and then meeting their requirements. Customers need to know what these new products can do for them. Clear communication is therefore essential. The emphasis is on marketing and communicating with customers about what the new technologies can do for them.

Conclusion

Intel is one of the success stories of the high-tech world. It provides vital components for personal computing. Now the company is moving forward into a range of new and exciting products and markets with a much stronger focus on marketing

Read the above case study and answer the following questions:

1. Investigate how the micro environment and the macro environment have an effect on its marketing and business.

2. Analyze the STP (Segmentation, Targeting and Positioning) strategies of the organization. Evaluate its marketing mix which leads to achievement of consumer satisfaction and organizational goals.

3. Develop strategies that could result in the organization taking better marketing decisions.

Note the Answers should be computerized and answered in details - Please do not copy and Paste

Answer 1

Micro environment and the Macro environment effects on Intel:

• Importance of Semiconductor and relative hardware is crucial to any country's economy, hence an advantage to Intel for further global growth
• levels of regulations are complex and keep fluctuating in Technology sector, hence a challenge for Intel
• Bureaucracy interference and military invasion can always be great challenge to overcome
• Intellectual property protection though is increasing and favoured nowadays by various governments, but still a fight from other growing technology start ups
• Taxation process are complex and tax rates go high in many countries and incentives could be less in some areas
• Industrial safety regulations are always of major concern and need to be addressed at 24*7*365 manufacturing facilities
• Product copycat and imitation can remain a tough challenge to market share
• Inflation problems in today’s economical recession problems can prove to be an obstacle for expanding operations and new projects worldwide
• Availability of skilled level of workforce in Semiconductor is dependent on country to country

STP (Segmentation, Targeting and Positioning) strategies of Intel:

Segmentation: Enterprise customers, channel partners, individual consumer category

Targeting: Direct selling on Enterprise level businesses, selling to individual consumers via channel partner sales

Positioning: premium/ durable/ reliable/ technology advanced products

Marketing Mix of Intel:

• Products:- Advanced Micro Device, Silicon Integrated System, Semiconductors and various Flash memory devices, and for Networking and Chipset
• Price- Pricing policies are dependent on product to product- vary from differential to affordable to premium pricings. It occupies nearly 90% share as manufacturer of semiconductors.
• Promotion- Intel follows mass marketing for various product categories to regular consumer category, has branding and marketing campaign known as Intel Inside. And it also follows Corporate Marketing and sales for it’s Enterprise solutions
• Place- Head quartered in Santa Clara, with globally spread operations in 63 countries, serving via channel partner sales to consumers, e-commerce selling, as well Corporate selling to Enterprise business via regional and zonal offices