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INTERNATIONAL BUSINESS ENVIRONMENT | ASSIGNMENT-1

AATISH PANDIT | PGP/31/185 | SECTION-D


I, Aatish Pandit do hereby declare that the report is my individual effort and that no
part of the report is copied from published/unpublished sources without proper citation
Know a Leading Business Enterprise and its Internal Environment
INTEL CORPORATION
About the company
Intel Corporation was incorporated in California in 1968 and reincorporated in Delaware
in 1989. It is in the business of designing and manufacturing advanced integrated digital
technology platforms. A platform consists of a microprocessor and chipset, and may be
enhanced by additional hardware, software, and services. They sell these platforms
primarily to original equipment manufacturers (OEMs), original design manufacturers
(ODMs), and industrial and communications equipment manufacturers in the computing
and communications industries. They also develop and sell software and services
primarily focused on security and technology integration.
Vision, Mission & Objectives
Intel in its annual report, states its vision statement as:
Vision: Our vision is if it is smart and connected, it is best with Intel.
To pursue this vision, Intel offers complete and connected computing solutions, both
hardware and software, and continue to drive Moores Law. Moores law states that:
Number of transistors per square inch on integrated circuits had doubled ever since their
invention and this trend will continue into the foreseeable future. Hence, Intel lays so
much emphasis on continuous innovation.
Intel Corporation has recognized the imminent changes in its external environment and
continuously strives to adjust accordingly. As stated in their annual report, Intel has
recognized that Internet of Things is the next big thing in the industry. They have
recognized the need to transform their primary focus from the design and manufacture of
semiconductor chips for personal computers (PCs) and servers to the delivery of more
complete platform solutions consisting of hardware and software platforms and
supporting services.
Intel in 2013 states its mission and goal statement as:
Mission: This decade, we will create and extend computing technology to
connect and enrich the life of every person on earth
Goal: Preeminent computing solutions company that powers the worldwide
digital economy
To succeed in this changing computing environment, Intel Corporation have stated the
following key objectives:
Quote:
Relentless pursuit of Moores Law to maximize and extend our manufacturing
technology leadership;

Strive to ensure that Intel technology is the best choice across the compute
continuum, including PCs, data centers, ultra-mobile devices, and the Internet of
Things;
Expand platforms into adjacent market segments to bring compelling new
System-on-Chip (SoC) solutions and user
Experiences to ultra-mobile form factors including tablets and smartphones, as
well as PC platforms (including Ultrabook devices, 2 in 1 systems, and all-inones), data center applications, and the Internet of Things (including wearables,
transportation systems, and retail devices);
Increase the utilization of our investments in intellectual property and research
and development (R&D) across all market segments;
Be the platform of choice for any operating system;
Expand data center, security, and big data analytics;
Scale our manufacturing capabilities into foundry; and
Strive to reduce the environmental footprint of our products and operations as
well as be an asset to the communities we work in.
: Unquote
Business Organization
In April 2015, Intel Corporation made certain changes to their organizational structure to
align with their critical objectives. They managed their business through the following
operating segments:

Intel is headquartered in Santa Clara, California and incorporated in the state of


Delaware. Intel has over 300 facilities located in more than 60 countries. Their principal
executive offices are located in the U.S. and a majority of the wafer fabrication activities
are also located in the U.S.

Intels Board of Directors oversees, counsels, and directs management in the long-term
interests of the company and its stockholders. Matters in which the Board is actively
engaged include business strategy, risk oversight, succession planning, and corporate
responsibility and environmental stewardship. Since 2003, the Boards Corporate
Governance and Nominating Committee has had formal responsibility for reviewing and
reporting to the Board on corporate responsibility and sustainability issues at Intel. A
number of directors have expertise in key corporate responsibility areas, including
corporate governance, education, and environmental sustainability.
Competitive Advantage for Intel
Intels products ability to operate on multiple operating systems in end-user products and
platforms operated or sold by third parties, including OEMs, is a key competitive
advantage. They optimize their products to be used for multiple operating systems and
invest substantial resources working with third parties to do so, but such investments are
risky given that it is not clear which products will succeed in the market.
Another key competitive advantage is their market lead in transitioning to the nextgeneration process technology and bringing products to market using such technology.
These transitions will offer significant improvements in one or more of the following
areas: performance, new features, energy efficiency, and cost.
Moreover, the combination of Intels network of manufacturing and assembly and test
facilities with their global architecture design teams is another important competitive
advantage. They have made significant capital and R&D investments into this integrated
manufacturing network, which enables them to have more direct control over their
processes, quality control, product cost, production timing, performance, power
consumption, and manufacturing yield. Most of Intels competitors rely on third-party
foundries and subcontractors such as Taiwan Semiconductor Manufacturing Company,
Ltd. and Global Foundries Inc. for manufacturing and assembly and test needs. Intel
provides foundry services as an alternative to such foundries.
Intellectual Property Rights and Licensing
Intel owns significant intellectual property (IP) and related IP rights around the world
that relate to their products, services, R&D, and other activities and assets. Their IP
portfolio includes patents, copyrights, trade secrets, trademarks, trade dress rights, and
maskwork rights.
Intel Corporation has obtained patents in the U.S. and other countries. Because of the fast
pace of innovation and product development, and the comparative pace of governments
patenting processes, their products are often obsolete before the patents related to them
expire; in some cases, their products may be obsolete before the patents related to them
are granted. Established competitors in existing and new industries, as well as companies
that purchase and enforce patents and other IP, may already have patents covering similar
products. There is no assurance that Intel will be able to obtain patents covering their
own products, or that they will be able to obtain licenses from other companies on
favorable terms or at all.
The software that Intel distributes, including software embedded in their component-level
and platform products, is entitled to copyright and other IP protection. To distinguish
their products from competition, they have obtained trademarks and trade names for their
products, and they maintain cooperative advertising programs with customers to promote
our brands and to identify products containing genuine Intel components. Intel also

protects details about their processes, products, and strategies as trade secrets; keeping
confidential the information that Intel believes provides them a competitive advantage.
Intels Integrated Value Framework
Intel follows an integrated value framework for corporate governance. Integrating
corporate responsibility and sustainability into its business and decision-making creates
value for Intel in four main ways. It helps them: reduce risk and protect their license to
operate, improve the efficiency and effectiveness of their operations, protect and build
brand value, and drive revenue growth through innovation and identification of market
opportunities.

The Intel brand


The Intel brand is consistently ranked as one of the most recognizable and valuable
brands in the world.
Intels Knowledge Capital
Intels success rests on its employees ongoing passion for innovation. Intel claims to
cultivate a safe, collaborative, and ethical work environment that enables employees to
thrive on the job and in their communities.
As of December 2014, Intel had 106,700 employees worldwide (including employees of
its subsidiaries), nearly half of who were located in the U.S.
Intels workforce is highly educated, with over 87,000 people in technical roles. Its
employees hold more than 9,800 Master of Science, 6,000 PhD or equivalent, and 3,800
Master of Business Administration degrees.
Intels HR Practices/Programs
Intel invests significant resources to develop the talent needed to keep the company at the
forefront of innovation. Intel works to build a strong engineering pipeline and attract top
performers, and it offers career development and work/life programsfrom recruitment
through retirementthat make Intel an employer of choice.
Intels Human Resources (HR) organization has primary responsibility for the
management of its workplace and talent development activities. Intels senior vice
president and director of HR oversees groups such as Talent Transformation and
Diversity, Employee Communications, Compensation and Benefits, and Learning and
Development. A dedicated research team is responsible for tracking and analyzing HR

data to help managers and leaders improve its workplace performance. HR also
collaborates closely with many other groups across Intel on issues such as organizational
health, design, and capability. In addition, a number of Management Review Committees
made up of senior leaders from across the company regularly review performance on HR
topics such as diversity and culture.
Intel believes that a more inclusive workforce makes it a stronger company, and that
Intels impact on peoples lives around the world is a direct result of the diverse Intel
employees. Intels goal is to become the technology industry leader in diversity.
Intels goal is to provide employees with a flexible work environment that allows them to
manage their work responsibilities and their personal commitments with as much ease
and as little stress as possible. Managers and employees have a shared responsibility to
adopt the appropriate flexibility to accommodate the needs of both the employee and the
organization. Flexible solutions may include adjusting work hours, location, or job
structure to enable employees to meet their unique personal needs while ensuring that
they meet their work deliverables.
Financial Results and Economic Impact
For 2014, Intel reported record revenue of $55.9 billion, up 6% from 2013. Net income
rose 22% to $11.7 billion, and earnings per share were $2.31.
Their operating income of $15.3 billion was up 25% over 2013. Intel achieved record
annual unit shipments for PCs, servers, tablets, phones, and the Internet of Things.
2014 Financial Results
Intels strategy for growth is playing out well. Intel is driving its core businesses in
personal computing and the enterprise, building on those assets to move into new areas
such as the Internet of Things and wearables, strengthening Intels position in mobile,
and continuing our relentless pursuit of Moores Law. The diversity and scale of Intel
products today put them in a unique position to compete across the breadth of devices
that compute and connect.
In 2014, Intel started growing again across a broad range of products and markets by
introducing many new product technologies across all of its businesses. Intel began
shipping the worlds first processor on 14nm process technology. It introduced the Intel
Core M processor family, designed to enable superior compute and graphics
performance and long battery life in razor-thin, fanless mobile devices. In the wireless
business, Intel qualified its first SoC application processor and baseband 3G solution,
code-named SoFIA.
In PC clients, revenue of $34.7 billion was up 4% over 2013. Operating income of $14.6
billion was up 25%. In Chromebooks,* Intel now leads in market segment share. In the
mobile area, Intel exceeded its goal to ship 40 million units for tablets during 2014, and
became one of the largest silicon providers for tablets.
In data center products, revenue was $14.4 billion, up 18% over 2013, and operating
income increased 31% as they capitalized on the growth of cloud computing and big
data. Intel introduced next generation Intel Xeon processors that enhance
performance, efficiency, and security for compute, storage, and network workloads in
cloud environments. Intel has made investments and established positions in emerging
growth sectors such as the Internet of Things and wearables before these segments
become mainstream. Intels Internet of Things revenue grew 19% in 2014, to more than
$2 billion. The cash generation from their business remained strong, with cash from
operations of $20.4 billion in 2014. Intel returned $4.4 billion to stockholders through
dividends and repurchased $10.8 billion of common stock through their common stock

repurchase program. Intels Board of Directors authorized an increase of $20 billion to


the common stock repurchase program. Effective in Q1 2015, Intels annual dividend rate
increased to $0.96 per share.
Conclusion
Hence, through this analysis of Intels internal environment, we conclude that Intel
Corporation has successfully leveraged its internal environment to improve its brand
equity and valuation. Also, by fulfilling all above, it has served the interest of its various
stakeholders.
Reference
Intel Corporation Annual Report 2014
Intel Corporation Corporate Social Responsibility Report 2015

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