BUSINESS STRATEGIC ASSESSMENT AND EVALUATION: Contextual Strategic Planning Tool Using SWOT Analysis
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Intel has been a giant in the computer market for so long. The company’s strong presence and momentum had enabled its elongated existence as well as its longstanding strategy that made the company outstanding in its performance and strengthening the productivity aspect at regular intervals over a period. The company apparently function based on Moore’s Law, which states that “in every 18-24 months, the number of transistors on a silicon chip must be doubled, dramatically increasing performance while dividing the real cost of that performance” (Dyer et al., 2016). The dynamics changed in early the 90's and the current millennium where new, strong competitors caused Intel to realize that greater focus on productivity does not translate into the obvious possibility of ever increasing demand for computers, but the development of faster, smaller, identically more productive portable computers.
PART 1: APPLYING SWOT TO THE CURRENT CHALLENGES OF INTEL
Intel discovered that distinct possibility remained essential and needed immediately whereas the company had little or no knowledge what the resultant consequence will be. As a matter of fact, it had almost no share in the emerging market of portable and high-speed computers that uses smart technology (e.g. smartphones). Dyer et al. (2016) reported that “ARM became the chip of choice for the emerging market and was a natural choice for the original Apple iPhone." However, ARM chips were predicted to control 98 percent of the smartphone market in 2007, by 2011 the company successfully exported over 8 billion chips. The hopeful incident triggered Intel to re-strategize, so as to catch up with the progression of market competition that re-shaped the current realities in the industry.
A SWOT Analysis strategy tool was used to improve the company strategic direction to enable it to recover excellently with the market revolution. According to Addams and Allred (2013), employing SWOT analysis help wise managers to conduct their company’s periodical introspection, which helps them to analyze opportunities or immediately take appropriate action based on the current or future environmental factors. A review of the feasibility of starting a new business or determination of corrective measures for an existing firm or business is considered based on company’s strengths and weaknesses. Thus, analyzing these forces will help to identify threats from legislation, economy and technology, changing social values, and competitors which could help the company to capitalize on new opportunities that meet the demands of the ever-changing marketplace.
In the case of Intel, the company’s SWOT analysis would certainly return some opportunities which can be used to strategically determine how the company responds to the immediate challenges of the smart technology market. The company that redesigns its response towards chip development that closes enough to compete with the market giant will remain famous and a series of latest strategic acquisitions which constitute the company's position for increased relevance. A SWOT Analysis for Intel should, therefore, focus on analyzing the strengths of the company especially in the light of its new direction about production and acquisitions. This will reveal the strategy to launch competitive new product designs in the smartphone market that will gradually introduce the company into the smartphone industry, through the support of the Intel Corporation loyal consumers and customer base and the company’s track record to strive in the market.
For instance, when the Atom chip was newly launched, the initial market response was extraordinary which better explain how responsive the market can be when business maintains a focus based on its strengths.
Consequently, focus on this direction will stimulate the company's production team and facilitate technological development from design to final product. Besides, marketing and advertisement along with optimism will intensify, and engineer creativity. Critical staff will thereby earn the motivation and be more innovative in perfecting their jobs and carrying their unit workers along, thus contributing to the overall effectiveness of the company’s production process. This will shape up the market response to a larger extent.
Consequently, the analysis will be of usefulness to power innovation that can leverage the existing threats to the smartphone industry and boost the company's advantage.
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PART 2 EVALUATING BUSINESS STRATEGIES USING SWOT ANALYSIS
The business world faces different challenges from day to day in its business environment; this is more so in the current age of technological advancement and a definite tilt towards a global online existence. For a company to stay relevant and continue to be ahead, constantly review of its business is compulsory and strong ambitions towards the current realities of their industry.
SWOT, therefore, provides critical data with which a company can objectively appraise its performance, reception, and position in the market, while also developing a strategy for its immediate future.
Having understood that a complete SWOT Analysis are of utmost importance and should be duly considered. In the case of Intel, I strongly believe its several strengths will fortify the company for greater advantage both in the creation and provision of value, the generation of the precise market response and the influence of consumer attitudes will equip the company for better performance, in the new smartphone market. The SWOT will provide Intel with a tremendous capacity to transform the company from being a peripheral to a major contender to become a force to reckon with in the industry.
I agree with the portion of the case study which says the outgoing CEO “believed he had positioned the company to withstand the long term trends in the industry and to regain its dominance eventually. This agreement is founded upon the acquisitions the company made which would see it create value in the core areas of need for the majority of the users of the smartphone market, most notably internet access and internet cum personal data security. For me as an independent scholar, I tend to appreciate the importance of external factors, which is vital to strategize on existing internal assets and how these assets can either be leveraged to take advantage of the external opportunities or respond to the external threats.
The SWOT result of Intel showing its massive strengths given the opportunities of the mobile market would, in my opinion, provide the added benefits of approaching both strengths and weaknesses as opportunities. For instance, Intel’s weakness in the unpreparedness for a market where performance are disadvantageous because unwanted capacity simply exhausted the succession more quickly (Dyer et al., 2016). In this way, more of the smartphones being produced lately are requiring the higher capacity to carry out higher and more complex functions, hence, Intel’s rich history of high-performance products can give them leverage in the new market. Another benefit is that the SWOT analysis would make obvious the fact that every opportunity available has a timeframe within which it can be cashed upon to the advantage of the company (Hay & Castilla, 2006). Hence, the need to act fast and act smart according to the timeframe of such opportunity’s projected optimum value becomes self-evident.
According to Ding-Hong, Tie-Dan, and Chang-Yuan (2014), SWOT “allows strategists to diagnose with greater details all factors which determine the situation of strategies, and to categorize these factors into internal and external ones.” This activity puts the company in the drive of its destiny.
PART 3 INDUSTRY COMPETITION, THE FIVE FORCES TOOL, AND BUSINESS STRATEGY DEVELOPMENT
The smartphone industry is one where Porter’s five forces analysis plays out quite interestingly. It is a market that has some established manufacturers offering products that have similar functions and abilities. Therefore competition and rivalry in such an industry will be high. Porter posits that rivalry is the strongest of the five forces and studies reveal that this is true of the smartphone market. The competition is fierce; companies are kept on their toes to keep developing better products at competitive prices. In other words, the competition is driven by similar devices perfuming similar functions irrespective of brand names. In the smartphone industry, the rivalry is premised largely upon “giving consumers a very smart combination of performance features, offering innovative products, giving additional after-sale services, improving warranties and creating a stronger brand image than competitors.” (Emhke et al., 2004).
Businesses tend to continually strive to outdo one another in a bid to roll out new products that are stylishly impressive to the buyer. The rivalry strategy tool reveals that the top competitors control a combined largest percentage of the market. This suggests that the individual differences between their market standing are not remarkably high. The industry grows quite fast. Therefore, the top competitors will continue appealing to customers through innovative offerings of devices which combine productivity, more apps, and services as well as sleek designing at relatively low prices. This, also means that the rivalry is set to continue in its intensity.
The intensity of supplier power within the smartphone industry is moderate, and this is so because the suppliers require the market leaders to buy from them in large quantities for them to make a reasonable profit. Furthermore, the suppliers have a high competition among themselves which also makes them unable to dictate high prices. For a company that would stay long and strong in the smartphone market, it is very important that such a company carefully selects its market. Market selection is critically important for a company to identify which market within the general industry market to focus on, which will increase its profit, and position it for continued relevance based on existing trends and forecasts of market behavior against the future. For instance, Nokia in the case study elected at the dawn of the software age in the 3G technology era, to focus on their Symbian OS. Over time, the Symbian market was unable to compete with newer software entering the market, and gradually it was phased out, and the company lost its long maintained market leadership. According to Dyer et al. (2016), Nokia had taken a nosedive since 2010; the company commanded only 2% of the emerging smartphone market profits and its plunged stocks tumbled.
Porter (2008) declared that “understanding competitive forces and their underlying causes, reveals the backgrounds of a business’s existing profitability while providing a structure for anticipating and inducing competition (and profitability) over time. Understanding industry structure is also essential to effective strategic positioning.” It is evident from the preceding that the development of a strategy for a business must factor into sustained cognizance the situation with the competition if it enjoys any bit of success. This is the surest way to create an appropriate business development strategy to strengthen its position in the market.
References
Addams, L., & Allred, A. T. (2013). The first step in proactively managing students’ careers: Teaching self-SWOT analysis. Academy of Educational Leadership Journal, 17(4), 43–51. Retrieved from http://www.alliedacademies.org/academy-of-educational-leadership-journal/
Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.
Ding-Hong, P., Tie-Dan, W., & Chang-Yuan, G. (2014). Integrating nonhomogeneous preference structures in SWOT analysis to evaluate multiple alternatives. Economic Computation and Economic Cybernetics Studies and Research, 48(3), 40–63. Retrieved from http://www.ecocyb.ase.ro/
Ehmke, C., Fulton, J., Akridge, J., Erickson, K., & Linton, S. (2004). Industry analysis: the five forces. Agricultural Innovation & Commercialization Center, Purdue Extension. EC-722, Purdue University.
Hay, G. J., & Castilla, G. (2006). Object-based image analysis: strengths, weaknesses, opportunities and threats (SWOT). In Proc. 1st Int. Conf. OBIA (pp. 4-5).
Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78–93. Retrieved from https://cb.hbsp.harvard.edu/cbmp/pl/53435998/53437191/dde5f454944fb994de504a542743f769.
