Intel Corporation, 1992
Case Study
Describe the characteristics of the industry in which Intel operates. How is Intel positioned in the industry? Intel operates in an industry, which is comprised of products involving high research and development costs, continuous product improvement and new innovations. The companies in the industry are having high economies of scale and are knowledge based. It helps both the service and manufacturing sectors in the growth process. Intel is positioned as a leading company with its ability to adapt to technological changes and its strong relations with other businesses who are major buyers of integrated circuits. The industry in which it operates is very competitive and comes with high risks as
…show more content…
Further, keeping in view the strong competitive environment and fear of “Clones” by others, Intel is constantly required to look for innovative products, which would need more funds for upfront expenditures. In these situations, large cash positions would help Intel to avoid taking loans from outside, and in turn interest costs, by using its own cash balances. A disadvantage of having large cash position would be that cash has an opportunity cost. In other words, Intel could be forgoing profitable investment opportunities. However looking at the data provided in the case, we can see that the cost of holding cash was small as they yield high returns, above 170 bases points above U.S treasury bills, through investing in securities rated above AA. Further, a cash rich company runs the risk of being careless as there may be reduced pressure on the management team to perform better. Observing Intel’s growing performance over a period of time, it seems that currently it has no such problem. However in future, it may become a cause of concern for the company.
Compare the three methods of repurchases: open market repurchase, fixed-price tender offer, and Dutch auction. In the open market share repurchase, the firm may or may not declare the repurchase. Depending on the market condition and the firm’s position in the industry, the firm can decide when and how many
2. Companies buy back shares on the open market over an extended period of time.
Intel’s capital structure dilemma was that it was holding too much cash on hand. Eventually, there were three available strategies or alternatives that Intel could undertake in terms of cash disbursement policies. First, it could continue or expand its market-repurchase program. Secondly, Intel could declare dividends to its shareholders on existing stocks. The last strategy is to put together a package of two unique securities: 1) A distribution of a two-year put warrant to its existing shareholders. 2) A distribution of 10-year convertible subordinated debentures to new
1. Cisco suffered from inertia when an attempt was made to engage business management in selecting software for their individual areas, and/or agreeing to participate in the ERP implementation project. List and explain reasons why management would hesitate to become engaged in the IT process/project.
The repurchase program increases the shareholder’s value. This is because of a rise in the price of the shares of the original shareholders.
Ida Inc. is a manufacturing company that has operations in both the United States as well as Spain. Ida is a U.S. subsidiary of a U.K. company and as such reports its financial statements according to both GAAP and IFRS. Ida owns several assets including a building which is valued at cost minus accumulated depreciation and impairment and is represented as a Cash Generating Unit under IFRS and long-lived asset under GAAP. A Cash generating unit is the smallest group of assets that can generate cash and is independent of other asset’s cash flow under IFRS. A long-lived asset is any asset that a company expects to control for at least a year. In 2008, Ida acquired a Spanish company headquartered in Spain. In 2010, one of Ida’s competitors sold their similar building nearby for way below asking price. Later on in 2010 a new government regime passed legislation limiting the exporting of Ida’s chief product in all markets. The new legislation led to a downturn in the market for Ida’s product which when coupled with the actual legislation serves as an impairment indicator which requires Ida to estimate recoverability. Impairment is a reduction in a company’s capital and specifically when the capital is less than the par value of the company’s stock (Investopedia.com). Under IFRS, impairment is when the carrying amount of an asset exceeds the book value, while under GAAP, impairment exists when the carrying amount of an asset is greater than than the undisclosed sum of
Moreover, the customers will never feel satisfaction with buying the same or few types of microprocessors. In order to satisfy various demands, Intel always spend huge amount and put a lot of efforts into their R&D department which makes Intel is able to introduce new products before its competitors. Consequently, Intel can provide the choices to the demand from high-end product with high price and the low-end demand with lower price.
Dell and Apple are American companies that participate in the industry of Electronic Computers, according to the SIC 3571. This industry is oriented to the manufacture of diverse kind of data processing systems. In 2001, the largest computer makers in the United States were Dell, Compaq, Hewlett-Packard and IBM. They produced about 40 percent of personal computers shipments in the world according to International Data Corporation (IDC). Dell is positioned as the bigger competitor, but in 2002, Hewlett-Packard acquired Compaq, challenging Dell’s leadership in this sector. (1)
4- IBM and Intel have a strong position in the market of North America and Europe, and it is very difficult for the companies like Qualcomm to survive in these regions. It is merely impossible for the Qualcomm to compete with the strategy of lower prices and lower quality.
Dell Case study. In this report we are going to analyse the business environment of the computer industry in the form of a PESTE which stands for Political, Economical, Social-Cultural, Technological and Environmental. We feel that it is important to analyse the environment of a business as it will help the business to identify the Opportunities and Threats surrounding it.
Complete analysis of Intel Corporation is based on the set of principles as stated in the United Nations Global Compact because it acts as a standard for all the sustainable growth. Apart from the previous, the analysis is aligned with the sustainable goals mentioned by United Nations in order to access the degree to which Intel satisfies these goals.
While Ms. Walker is getting very little sleep, Dr. Malhotra is getting even less because he worries that proprietary information is leaking to the outside world. His immediate reaction is to place draconian controls on his data in order to stop undesirable outflows. Is this the right approach? Is there an example of how another company effectively handled this problem? Please explain your answers.
Dell Computer Corporation is the focus of the case. The time of the Dell case is
The first source of information used was Intel’s own website which is secondary information. This source was beneficial because it came from the company’s website and so therefore the information was up-to-date and should be accurate about the statistics of the company. The website also shows the latest products that Intel is producing as well as the many research products that they fund to advance computer technology. The downside however of this source of information is that the information on the website could be biased because they will want to project their organisation in the best light possible so are therefore unlikely to post anything negative about the company. The Intel website did however show the different
Throughout the last 50 or so years, tech companies have risen and fall, gaining fame and power, and marking their names in history book for achieving momentous tasks, often in which can still be seen today. Intel is not an exception to this trend; in fact, the mega corporation is a prime example of what American tech giants look like: Intel has their hand in essentially every market dealing with computer components, from memory and memory controllers, to accelerators, to their main attraction, Central Processing Units, or CPU’s, for Desktops, Laptops, and Servers. Not only does Intel have vast reach in the computer component market, but they have complete control of not only their production process, being for the most part self-contained. From mining necessary resources, to shipping out their complete products from factories to their recipients, whether that be a store or an OEM. Intel is truly one of the most successful, if not the most successful Tech giant involved with Computer hardware. However, they only got to this place through nefarious actions, such as breaking contracts, playing the courts to their advantage, throwing their weight around, regardless of the legality of it, to meet their bottom lines. Considering that Intel is at such a high position, and has pretty much always existed at a fairly high position in the market, why? This paper will set out to find out the
Collecting the best administration of Macintosh Inc into the meeting room, I exhibit every last one of them with another Hewlett-Packard portable workstation phone. They are similarly astounded and ask each other what is happening. In their individual workplaces, they have the cutting edge Macboks I benevolently request that they play out a little undertaking on their recently introduced PCs and guarantee them that my rational soundness was not being referred to. I promise them that the purpose of the activity would be clear in under five minutes. The errand that I ask of every official is to create his and her cell phone and place it on the board table. Consistent with my desires, they all have the most recent adaptation of the iPhone,