Intel: Strategic Decisions in Locating a New Assembly and Test Plant

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

1. What are the lessons useful for their future microprocessor business that you think Intel should have taken away from their experience in the DRAM industry?

By the early 1980, Intel’s total share in DRAM was barely 1% and manufacturing was restricted to one fab out of Intel’s eight fab, where the Japanese semiconductor companies had captured nearly half of the world memory market. There are several factors that forced Intel to exit the DRAM market, those are the same lessons learned.

The company also should consider other factors in choosing the location of the plant including:

4) Location- Decisions about where to locate a store are critical to any retailer’s success. Location decisions are particularly important because of their high cost, long-term commitment and impact on customer patronage. Choosing a particular location type involves evaluating a series of trade-offs. These trade-offs generally include the occupancy cost of location, the pedestrian and vehicle customer traffic associated with the location, the restrictions placed on the store operations by the property managers, and the convince of the location for customers.

China considered one of the largest economies in the world, it also has a vast emerging

Many companies today want to expand their business to the international business, which can bring cost down and profits up. Taking a business internationally means knowing the rules and regulations of the countries you are entering. There can be many issues with going global which include cultural barriers, diversity issues, multicultural issues, political issues, and economical issues. It is very important to know how important expansion is to the company and what implications will come from going global.

Clear examples of this would be Intel assembly plants in Penang, Malaysia and in Manila, Philippines. Design requires high level scientific, technical and engineering personal, usually in Japanese and American locations, as the chips are light transportation would not affect the location was these industries a great deal. Another key economical factor was the economy of the region, areas such as United States, Japan and Western Europe are key examples of this. The political and financial systems allowed access to the financial capital needed for the development of semiconductor manufacturing.

Dalian in China is the most attractive site for Intel to locate Assembly and Test plant in terms of its low-costed workforce and high labor productivity with skilled workers, reliable and qualified power infrastructure, as well as a relatively open environment and the increasingly mature law and regulation.

Since 1998, Intel has developed and used an e-business strategy to maintain relationships with its customers, employees and suppliers. The company's goal is to become a 100% ‘e-business enabled' corporation. In terms of the value chain concept, Intel has reaped tangible benefits in the volume of business it does on the Web, as well as created savings of time and money for both itself and its customers.

As discussed in Chapter 21 of our text book, any company that is looking to expand globally must make five key decisions. A firm must decide if: a) they really want to expand to the international market; b) they

As an executive of a large U.S. multinational corporation planning to open a new manufacturing plants in China and India to save on labor cost. There are a few factors that must consider when making the decision. The factors are including the environment business of the both country.

In regards to its strategic business position, Techy should have operation in China. This is the best strategic move for the company if it hopes to compete with its international counterparts. This decision is tough as Techy American staff will be displaced. However, this decision is the best in regards to the future viability of the business. Further compounding this issue is the prevalence of Xtech's competitors who are undoubtedly expanding into China as costs of production is lower. In order for Techy to compete in this market, it too must lower its costs to a level competitive to that of its peers. The technology field is predicated on innovation. Innovation however, cost extensive amounts of money. In order to innovate quickly, large expenditures in R&D are needed. By saving money in China, more money can subsequently be plowed back into the technology research and development division. These allocations will ultimately help Techy to better compete not solely on price, but on quality. If the company can innovate effectively, it will not be subject to the price wars and lower margin business that many of its competitors will. Customers have proven they will pay premium prices for innovations that provide value to them. By saving money with operation in China, Techy can provide better innovations which ultimately generate higher margins and profits for the business. In short, I believe it is in

Companies can decide to go global or to enter international markets for various reasons, and these different objectives at the time of entry that enable the business to produce different strategies and the performance goals, and even forms of market participation.

Locations for outsourcing jobs is very important as companies need to decide what is going to be the cheapest option but also the most beneficial in terms of maintaining their remaining clients and customers, there tends to be quite high volume complaints when it comes to outsourcing jobs, problems can arise often due to language barriers, so choosing the best location