understand the behavior of organization in their market environment
TRANSCRIPT
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