Intel Corporation’s SWOT Analysis &

Recommendations
UPDATED APR 10, 2017 EDWARD FERGUSON

A Tiffany toaster with

Intel Inside sticker. A SWOT analysis of Intel Corporation shows current strength and
industry leadership, but vulnerability because of competition in the global market for
semiconductors and microprocessors. (Photo: Public Domain)
Intel Corporation’s successful semiconductor business strategically addresses the strengths,
weaknesses, opportunities and threats (SWOT) in the organization and the external environment.
The SWOT analysis model is a tool used to determine the most significant internal strategic
factors (strengths and weaknesses) and external strategic factors (opportunities and threats) that
affect the performance of the firm. Intel’s performance is subject to the impacts of these factors.
As a leader in the global desktop microprocessor market, the company must overcome its
weaknesses and the threats to its business. Intel must also develop its strengths and exploit its
opportunities to stay ahead of competitors like AMD in the desktop market, and ARM and Apple
in the mobile device market (Read: SWOT Analysis of Apple Inc.).
This SWOT analysis of Intel shows that the company is in a comfortable position where it is easy
to maintain market dominance. Nonetheless, the company must address the critical issues shown
in the SWOT analysis, to ensure long-term success, considering rising competition from other
technology firms.

Intel’s Strengths (Internal Strategic Factors)

Intel Corporation is the strongest competitor in the global market for semiconductors. This part
of the SWOT analysis identifies the company’s main strengths or internal strategic factors that
have an enabling effect for business success. The following are Intel’s strengths:
1. Strong partnership with Microsoft
2. High-efficiency fabrication processes
3. Economies of scale
Intel has an enduring partnership with Microsoft Corporation, which dominates the market for
desktop operating systems (Read: SWOT Analysis of Microsoft). This partnership is partly
responsible for the success of the two companies. For example, Intel continues to benefit from
the wide profit margins of its processors developed for market-dominant Windows systems. On
the other hand, Microsoft benefits from the partnership through the satisfactory performance of
Windows systems based on the processing power of Intel’s products. Both companies use this
strength as a barrier to counteract the effects of new entry (Read: Five Forces Analysis of Intel).
The high efficiency of fabrication processes is a major strength that Intel uses to build
competitive advantage. Such efficiency allows the company to supply processors to equipment
manufacturers on time and at adequate amounts. Also, the company’s long history of focus on
semiconductor fabrication has led to economies of scale that competitors find difficult to match.
In this part of the SWOT analysis of Intel, organizational capabilities and strategic alliance
strengthen the business.

Intel’s Weaknesses (Internal Strategic Factors)

Intel remains the industry leader, but continuing this leadership requires addressing the
company’s weaknesses. This part of the SWOT analysis specifies the organization’s weaknesses
or internal strategic factors that impose challenges or limits on performance. Intel has the
following weaknesses:

1. Insignificant presence in the mobile market

2. Dependence on Windows machines
3. Limited business diversification
Intel has a mutually beneficial partnership with Microsoft. However, this partnership leads to a
weakness because it compels Intel to focus on the design and fabrication of microprocessors for
Windows systems. As a result, the company lacks comparably extensive business processes for
other products. For example, Intel remains unsuccessful in developing competitive and profitable
processors for mobile devices. Also, the partnership makes the company susceptible to declines
in desktop/PC sales. Another weakness is Intel’s minimal business diversification.
Diversification shields the organization from market-based risks. Intel needs to implement major
strategic changes to address the weaknesses specified in this part of the SWOT analysis.

Opportunities for Intel Corporation (External Strategic

Factors)
Major opportunities are available to improve Intel’s performance. This part of the SWOT
analysis identifies business opportunities or external strategic factors that facilitate growth. The
following opportunities are available in Intel’s external environment:
1. Business diversification
2. Product development for the mobile market
3. Flexibility of processors
Business diversification is an opportunity for Intel to improve its performance. For example, the
company can develop semiconductor products to target new segments in the household appliance
market. Acquisition of other firms can also diversify the business. Diversification remains a
significant opportunity that has not been fully exploited, considering Intel’s generic strategy and
intensive growth strategies. In addition, the company has the opportunity to develop products for
the mobile market, considering the lack of successful Intel processors for mobile devices. Also,
the company can increase the flexibility of its processors to widen their potential use. In this part
of the SWOT analysis of Intel Corporation, the opportunities point to increased effort outside of
developing microprocessors for Windows systems.

Threats Facing Intel (External Strategic Factors)

Intel’s business could potentially decline as a result of unaddressed threats in the external
environment. This part of the SWOT analysis specifies the threats or external strategic factors
that reduce or end businesses. In this case, Intel faces the following threats in its business
environment:

1. Rapid market shift to mobile computing

2. Competition with ARM in the mobile processor
3. Competition with AMD and ARM in the PC market
Intel leads in the PC processor market, especially because of the dominance of Windows
systems. However, the rapid market shift to mobile computing is a growing threat against the
company. For example, as PC sales decline, mobile device sales increase. This condition
threatens Intel, which has failed to capture the mobile device processor market. In relation,
competition with ARM devices is a major threat against the company. ARM Holdings develops
processor architectures used by the majority of companies in the mobile device market.
Moreover, in the PC market, minor competitor AMD has potential to capture a bigger market
share, and ARM Holdings has potential to succeed with its enhanced processors for desktop
systems. Intel must ensure competitive advantage in the PC market and develop a competitive
product for the mobile device market to address the threats specified in this part of the SWOT
analysis.

Intel’s SWOT Analysis – Recommendations

This SWOT analysis of Intel indicates current stability based on business strengths. A dominant
industry position shows that the company has what it takes to withstand the effects of
competition and new entry. However, weaknesses make the company vulnerable to threats in its
business environment. For example, because of its insignificant presence in the mobile market,
Intel is vulnerable to the threat of the rapid market shift to mobile computing. Also, the company
is dependent on Windows machines, making it vulnerable to the threat of competition with AMD
and ARM. Nonetheless, Intel has opportunities to address these issues.
Based on the results of this SWOT analysis, a recommendation is to improve Intel’s position in
the semiconductor industry through increased efforts to develop competitive and profitable
processors for mobile devices. It is also recommended that the company should establish new
partnerships to reduce its dependence on Microsoft. Another recommendation is to diversify
Intel’s business, such as through new acquisitions in other industries, for the purpose of reducing
market risks and the potential impact of declining PC sales.

trengths in the SWOT Analysis of Intel :

Technology leader: Intel is the clear leader in terms of technology with Intel inside
being one of the smartest marketing campaigns ever. Its processors are legendary
and are used in assembled market, Desktops, Laptops, Gaming and for many
other purposes.

The marketing study of Intel is impressive because branding of a product which is

inside the computer was a difficult challenge. However, due to its smart marketing
and amazon products and service, Intel has managed to become one of the
topmost respected companies in the technology and IT sector.

Brand Value: Intel stands at rank 40th in the world according to Brand Finance
report of 2016. It stands at 7th when we consider only the Technology giants. Its
brand value is $22.845 bn.

Ranking: Brand Values of the top 10 technology companies in which INTEL is

ranked 7th.
Brand Recognition: According to Interbrand Intel stands at 14th in the world in
terms of brand value. According to Fortune, Intel ranks 46th in the world’s most
admired companies. Intel also features in the list of world’s most ethical companies
published by Ethisphere.

R&D: The biggest strength of Intel is its commitment towards R&D. Pushing for
making everything faster, better and more efficient. This gives them an edge over
other tech giants.Innovation: According to 2016 Global Innovation 1000, Intel
ranks 5th in the most innovative companies.

Market Share: It is the world’s largest microchip manufacturer in terms of revenue.

This gives them an edge and creates an entry barrier for new competitors.

Presence: It is a technology company that is globally present. It

has operations present all over the world. Almost all the major computing engines
have its semiconductor microchips.

Tie Ups: It makes powerful and efficient microprocessor chips and is renowned
throughout the world. It has tie-ups with major computer manufacturers and lends
its chips in all of them.

Weaknesses in the SWOT Analysis of Intel :

Overproduction: It has the habit to over produce semiconductor chips. This
causes a flooding in the market

Not Diverse: They are mostly present in the personal computer segment.

Decreasing Profits: Intel has lost a huge market share since 2000. Its profits are
low and keep on decreasing. Its brand value has also eroded from $25.011 bn to
$22.845 bn.

Service in developing countries: While the service is very fast in developed

countries like UK or US, the service levels are slower possibly because of limited
technology available in developing countries like India

Opportunities in the SWOT Analysis of Intel :

Computer Era: The demand for computers has been rising and will keep on rising
as the world is becoming more and more digital. Intel can tap into this and diversify
its market and increase its market share and revenues.

Smartphone: Smartphone is another area which is on a rise. Intel can enter into
this market and create chips for the same.

Drones: Drones are going to be the future of logistics, surveillance and many
different tasks. All these tasks will only become possible if the processors being
used for them are low energy consuming and give higher output at the same
time. Processors for drones is a great future segment for Intel.

Automatic cars: Just like Drones, Automatic cars are also increasing in
demand, another segment which uses processors and depends on processors.
Threats in the SWOT Analysis of Intel :
Dependency: Too much dependency on one product. If a competitor creates a
better version of this product Intel would be in a big trouble and would have no
other product to lean on.

Competitors: AMD is a very tough competitor and is constantly trying to topple

Intel’s market position. Others like Dell, IBM etc are also financially strong and
have great R7&D.

China: China is known as the manufacturing hub across the world for all things
including electronics. Off course, the problem with Chinese products is reliability.
However, the chinese processors are penetrating the market more then ever
before.

Price War: There is a price war in this segment. All the companies are trying to
manufacture chips which have lower per unit cost.

Riding the change: The world is now focusing on hands-free devices, something
where Intel is still to increase its penetration.