Welcome Everybody Welcome Everybody

Name : Md. Mozahidul Islam Sikder

Id. : 2013121018

Program : HND in Business

About Intel: An Intelligent Company Integrated Electronic Corporation

Founded on July 18, 1968

Largest semiconductor chip producer in the world

Manufactures the processors that are used in the majority of laptop computers and makes many other devices that relate to computing and communication

Biggest customers are Hewlett-Packard and Dell

According to Tech Report, In Q2 2013, Intel achieved a net income of $2.4 billion on $12.9 billion, plus or minus $500 million.

Market Structure

Perfect competition: Large no. of buyers and sellers, no market power.

Monopoly : There there is only one provider of a product or service.

Monopolistic competition: Many producers and many consumers but competitive product

Oligopoly : Buyers are many, sellers are few, and competition is high.

Duopoly : Two companies own all or nearly all of the market for a given product or service.

There are all about 2 main and major There are all about 2 main and major Processor's Manufacturing Processor's Manufacturing Company. Company.

They are : They are :

Intel and Intel and

AMD (AMD (Advanced Micro Devices)Advanced Micro Devices)

An another also well known company named ARM (ARM architecture) An another also well known company named ARM (ARM architecture) which is used for mobile processor technology. which is used for mobile processor technology.

So, So, IntelIntel can be said as a can be said as a DuopolyDuopoly Market Structure. Because, There Market Structure. Because, There are only two Companies in the market with same product or same are only two Companies in the market with same product or same services. services.

Core competencies:

Porter’s five forces model: Porter’s five forces model:

Bargaining Power of Suppliers :

Abundance of suppliers : With thousands of suppliers for

Intel to work with and negotiate with, each supplier has little

negotiating power and Intel has the upper hand when

making negotiations

Suppliers have few alternatives : With few alternatives

to sell to, Intel's suppliers have less bargaining power

Bargaining Power of Customers

Limited buyer information availability: When buyers have limited information,

they are at a disadvantage in negotiations with sellers. Limited buyer information

positively affects Intel.

Large number of customers: When there are large numbers of customers, no one

customer tends to have bargaining leverage. Limited bargaining leverage

helps Intel

Limited buyer choice: When customers have limited choices they end up paying

more for the choices that are available. Limited buyer choices are a positive

for Intel. 

Intensity of Existing Rivalry

Relatively few competitors : Relatively few competitors : Few competitors mean fewer firms are competing for the Few competitors mean fewer firms are competing for the

same customers and resources, which is a positive for Intel.same customers and resources, which is a positive for Intel.

Large industry size:Large industry size: Large industries allow multiple firms and produces to prosper Large industries allow multiple firms and produces to prosper

without having to steal market share from each other. Large industry size is a positive without having to steal market share from each other. Large industry size is a positive

for Intel.for Intel.

Very few rivals: Very few rivals: Intel faces very few competitors in the market of microprocessors, it also Intel faces very few competitors in the market of microprocessors, it also

enjoys very large market share in this sector. Intel's direct competitors is AMD with approx. enjoys very large market share in this sector. Intel's direct competitors is AMD with approx.

19.5% market share, Qualcomm and other has less than 0.5% and Intel controls 80%. 19.5% market share, Qualcomm and other has less than 0.5% and Intel controls 80%. 

Threat of Substitutes Substitute has lower performance: A lower performance product means a customer is less likely to

switch from Intel to another product or service. … This qualitative factor will lead to an increase in costs.

Substitute is lower quality: A lower quality product means a customer is less likely to switch

from Intel to another product or service.

Substitute product is inferior: An inferior product means a customer is less likely to switch

from Intel to another product or service

High cost of switching to substitutes: Limited number of substitutes means that customers cannot

easily switch to other products or services of similar price and still receive the same benefits.

Limited number of substitutes: A limited number of substitutes mean that customers cannot easily

find other products or services that fulfil their needs. Limited substitutes are a positive for Intel.

Threat of New Competitors

Entry barriers are high: When barriers are high, it is more difficult for new competitors to enter

the market.

High capital requirements: High capital requirements mean a company must spend a lot of

money in order to compete in the market. 

Advanced technologies are required: Advanced technologies make it difficult for new

competitors to enter the market because they have to develop those technologies before

effectively competing.

Patents limit new competition: Patents that cover vital technologies make it difficult for new

competitors, because the best methods are patented.

High switching costs for customers: High switching costs make it difficult for customers to

change which products they normally purchase, due to costs. 

Elasticity of Demand:Elasticity of Demand:

The Demand will be change with the change of The Demand will be change with the change of demand …..demand …..

Elasticity > 1 Elastic DemandElasticity > 1 Elastic Demand

Elasticity < 1 Inelastic DemandElasticity < 1 Inelastic Demand

Elasticity = 1 Unit ElasticElasticity = 1 Unit Elastic