Intel Corporation: Resilience in the face of error and learning from strategic mistakes

2015 marked the 50th anniversary of Moore's Law, a famous and remarkably accurate prediction made by the co-founder of Intel about the pace of technological change. The prediction has driven research strategy and commercial success at Intel. At the same time however, Intel has made strategic mistakes; these issues as well as the new direction of the company are analyzed in this case study.

Scope

  • A detailed analysis of the factors affecting Intel's underlying performance.
  • An assessment of the strategies used by Intel to build its business.
  • Forward looking analysis of the potential benefits and pitfalls of the new direction of the company.

Reasons to buy

Why has Intel's share price been reasonably flat at a time when semiconductor based mobile computing devices have had dynamic growth?

What factors affect the strategic direction of a large technology company?

How much potential does the Internet of Things hold for Intel?

Companies mentioned

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Table of Contents

OVERVIEW

Catalyst

Summary

ALL THAT GLITTERS IS NOT GOLD

Semiconductors as beating heart of technological change

What are semiconductors?

What are microprocessors?

Why are semiconductor ...

OVERVIEW

Catalyst

Summary

ALL THAT GLITTERS IS NOT GOLD

Semiconductors as beating heart of technological change

What are semiconductors?

What are microprocessors?

Why are semiconductor devices interesting & important?

Headline results mask potential problems

Consistent top line growth and transition to Asia-Pacific complete

Market perception gives sideways share price movement

UNDERLYING ISSUES INSIDE INTEL

Downward trends in profits and margins

Profits on long-term downward trend

Margins being squeezed over sustained period

Rising costs and limited buyers

Vertical integration both blessing and curse

Reliance on few buyers reduces flexibility

Mixed results in PC and data center segments

PC processors starting to suffer in flat duopolistic market

Data centers look set for turnaround from revenue and profit mismatch

WIDESPREAD IMPACT OF SHIFTING DEMAND

Missed opportunities and learning from mistakes

Failure in mobiles and tablets lingering nightmare for Intel

Blinded by relentless pursuit of Moore's law and choosing wrong competition

Ready to be smart and connected in the cloud

Opening one eye whilst closing the other?

Technological advance still vital to the industry

CONCLUSIONS

Never too big to make mistakes, never too big to change

APPENDIX

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