Part 1
Question 1: Different Changes at Intel over the First Three Years
In his first year, Barret introduced a new wireless unit that mixed Intel’s flash memory operations with new acquisitions like the DSP Inc., a chipset supplier for digital communications. During the second year, Architecture Group was introduced, which combined the developing and manufacturing of core processors. Consequently, in the third year the Architecture Group was reorganized as well as creation of a new unit that was a merger between communication and networking operations.
Question 2: Environmental pressures experienced by Intel
Politically, the potential war with Iraq had affected Intel. In addition, the September 11, 2001 attacks also added to the problem plus the slowing economy. Additional pressures on Intel include product delays, shortages, and overpricing. Furthermore, competition with its chip customers in other markets resulted to Intel’s censure from Dell and Cisco.
Question 3: Internal Organization pressures
Some of the internal organization pressures ceasing the production of network routers and servers. In addition, some of the areas that were closed down by the CEO were the iCat an e-commerce solution that supported small businesses. Another internal organization pressure was internal restructuring that resulted to 80 percent of the staff in the microprocessor unit being given new jobs. The chip managers were assigned new markets, in which they did not have experience. A New unit such as the Architecture Group was introduced to assist in development and manufacturing of core processors. Furthermore, this Architecture Group was later merged with communication and network operations to form a new unit. Additionally a wireless unit was established.
Question 4: Other External and Internal Pressures
Other pressures include the weak demand and over-capacity in the semi-conductor industry. In addition, researchers were expecting a 34 percent decline in the global sale of chips. Intel’s shares had also decreased by 60 percent to a share price value of $26 dollars.
Question 5: Conclusion
Barret made changes in the Intel Company as a way of improving its performance. He wanted to diversify Intel into the production of information and communication appliances that were related to the internet, as the internet was fast becoming a global market. In addition, reorganization in the Intel Company would give it a competitive advantage in the segmented technology market. Furthermore, restructuring would allow it to make authentic products. Moreover, Barret was focused in reducing the cost of manufacturing chips, so he decided to invest in the research and development of newer technologies. Most dominant issues were firing of employees, restructuring of the staff and reorganization of the company to allow easier and efficient decision making in the company.
Question 6: Pressure for Change in the Future
One of the pressures for change that Barret might face in the future includes the issue of assigning non-qualified chip managers to new business units. This may result because instead of hiring experienced personnel in the management of the new markets he opts to select the personnel with no qualifications for the new business units. In addition, his decision to invest in research and developing of newer technologies to reduce cost of making chips at this particular time when the company is not performing well may be costly if the research does not provide solutions.
Question 7: Advice to Barret
In order for Barret to be able to cope with these pressures, he needs to have a justifiable and well-documented explanation. This will provide evidence and support on his decisions in investing in research and developing newer technologies. In addition, a description of how cutting jobs will result in future growth of the company is also of vital importance to be able to counter these pressures.
Part 2
Question 1: New pressures in the Last Tenure
Some of the new pressures include poor performance of its products. This was especially true for its Itanium processor, which did not perform well in the market. In addition, the production of communications software had little market. This was because no mobile technology company had decided to use its processor. Furthermore, the tear 2001 saw the collapse of the IT market due various reasons.
Question 2: Response to Pressures
Barret employed the use of dual architecture in the manufacture of its processors instead of the normal production of faster and faster chips. In addition, in order to cope with these pressures, Barret was involved in the reorganization of the company by introducing new business units such as the one that focused on mobile devices.
Question 3: Expected Changes by Paul Otellini
Some of the changes I would incorporate as Paul Otellini would be the hiring of experts in the already established new units to foresee the development and expansion of each unit. Since Barret had used mangers within the organization to overlook the running of the new business units, use of experts would guarantee a higher profit margin because of the experience that they would bring to the company.
Key Issues, Problems, and Opportunities
The main issues in this case study include the reorganization of Intel through the introduction of new business units. In addition, the restructuring of the staff also becomes one of the key issues. Some of the problems include declining profits and reducing employee workforce. Opportunities include the merging of various business units and the involvement of Intel in the other products such as the mobile devices.
Recommendations
The Intel Company should ensure that an expert or a person with the necessary qualifications markets heads every new business unit. This will ensure the success of the product in the market. Additionally, diversification into different technological products will continue increasing the profit margin for the company.
