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Pestel Analysis Of Intel Sponsors Of Tomorrow Economics Essay

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Published: Mon, 5 Dec 2016

Intel has long been striving to achieve perfection in providing satisfactory customer services under government regulations across the globe. Intel’s main concern is to help develop target markets and provide hardware that meets demands of the ever growing software industry. Intel has launched many projects in the past in association with educational institutions and governments of various countries across the globe to increase technological awareness among the people of the world and help them, unleash their creativity.

Intel’s recent “Teach to the future” program was launched in under developed countries in association with their educational institutions to provide first-hand knowledge about modern computing technology. Intel has also launched a program with the support of many government institutions in under developed countries like Pakistan to provide educational institutions with top notch technology at a very low cost.

Political influence is of great importance to Intel and thus sincere efforts have been made and are required in the future to maintain public interest in the company. There is an increasing awareness among the stakeholders in public programs of Intel which needs to be satisfied to ensure continued support and investment of stakeholders in the company.

The political system of underdeveloped countries like Pakistan provides great opportunity to Intel for growing their business by lending a helping hand in development activities in these countries. With increased awareness in modern technology through proper education and training, Intel can create high market demand for its products in these countries.

The absence of import duty in Pakistan and the efforts of the government and other non-government institutions to promote growth of technological sector in Pakistan present Intel with great opportunities to launch its products in Pakistani markets.

Political instability might pose a threat which may become a factor for Intel’s reluctance in launching new products directly in Pakistani markets. The political uncertainty in Pakistan and other under developed countries like it presents a great hurdle in establishing and maintaining product market in these countries, especially under economic constraints.

ECONOMICAL

The economic recession posed a great threat to Intel’s product market in many countries as the consumer demand for latest products decreased considerably. The incredibility of credit even in developed countries has become a major problem in creating and maintaining a stable market for Intel’s products.

In this scenario, competitors pose a vital threat to Intel’s product market with their cheaper higher performance solutions and thus a considerable portion of consumers have shifted to other brands.

However, low cost of labor in countries like Vietnam, Malaysia, China, India, Pakistan and many other countries of the same category provide Intel with an opportunity to continue large scale production at lower costs which in turn would produce products which lie under the affordable band for most consumers.

Large scale production of silicon products in China has proven to be very successful for Intel as now it is able to meet the market requirement of cheaper yet high quality products. Low cost of production is the main factor why Intel chose to invest in China and this decision has proven to be quite beneficial.

The consumers are the main concern of the company and thus the satisfaction of consumers is necessary to maintain market share in the industry. In the economic recession of the modern world, the consumer demands have shifted to reasonable quality low cost products rather than high quality expensive products. Therefore, Intel needs to identify the need of the consumers and produce products which meet the market requirement.

Although the economic recession has also affected the company itself, the loss of profitability can be overcome by large scale production in countries with cheap labor and technological costs.

One factor that needs to be acknowledged here is that although some countries might be feasible in terms of financial position but the rate of development of technology may not be suitable for investment by Intel as was the case with India in the first half of this decade. As a result Intel chose Vietnam for investment despite its unstable political conditions.

The cost as well as quality of workforce is of great significance to improving the economies of production and therefore only those countries present good opportunities for the company’s growth which good quality of workforce available at low cost.

SOCIAL

Social factors such as demographics and cultural influences are of great importance for a company. Each of the social factors has a great influence on the productivity of the company and efficiency in management of resources.

The workforce plays a vital role in a company’s development and Intel has always sought to maintain an efficient workforce to make efficient use of its resources. Literacy rate is of great concern especially in Intel since the technological know-how of the workforce is of great significance. For the same reason Intel chose Vietnam for investment in 2006 as the country has around 194% literacy rate of which 280% of the college graduates hold majors in science subjects.

Same is the case with china as the adult population of China has greater than 395% literacy rate which made it an ideal candidate for investment and establishment of a manufacturing facility for Intel’s products. Also the low cost labor of China provided Intel with a very cost effective and high quality workforce that enabled it to lower its cost of production and bring cost effective consumer products in the market.

Apart from the investment point of view, the social factors of the product markets are also of great importance for Intel. Since Intel is a multinational company, it needs to consider the social factors on a broader scale and products are thus targeted accordingly. A majority of consumers of Intel’s products belong to under developed countries like Pakistan and India which demand cheap product solutions for their needs.

Therefore, there is always great demand for low cost computing equipment in these areas which Intel caters by its low end computing products and embedded computing solutions.

Business centers are also high potential customers of Intel and the demand for Intel’s products is particularly higher in under developed countries which are under the process of digitizing their whole business systems. By bringing reliable and high quality products in the market, Intel has established a strong position in the market which can play for Intel’s favor provided that continued excellence in product design and reliability is ensured by the company.

1http://www.ilo.org/public/english/region/asro/bangkok/skillsap/skills/vietnam_literacy. htm

2http://www.orientsoftware.net/about-us/why-vietnam.aspx

3http://www.accu.or.jp/litdbase/policy/chn/index.htm

TECHNOLOGICAL

Technological factors are of great significance for an IT company such as Intel as new breakthroughs in technology can present the company with opportunities for producing low cost yet high quality products and can also pose threats with regards to obsoleting current products. Therefore, Intel must keep close watch on changing technology and must utilize profitable openings created by technological enhancements.

Intel recognized the need for mobile computing and hence launched its embedded processors and computing systems to make profitable use of modern computing trends. Intel’s recent acquisition of several companies includes companies like Wind River which is an effort by Intel to expand its business towards embedded systems and mobile computing.

Intel also signed a definitive agreement to buy McAfee, a security system’s developer to further extend its business into the computing security industry. These acquisitions clearly show that Intel is preparing well for the future which lies in advanced mobile computing technologies and security systems.

Technological shifts in computing can pose great threats to and IT giant like Intel if they are not accounted for. An example could be the launch of 64-Bit technology by AMD (a major competitor) which drove Intel to push deadlines to bring out its own competitive technology matching the standard. Even though Intel did manage to overcome this threat as quickly as possible, the leading role of Intel in the world of computing was indeed shattered for some time.

Intel has also invested in many research projects in various areas which range from research in efficient data storage to high speed data transfer. An example of Intel’s efforts for bringing a technological shift in its favor and remove certain barriers present in the modern computing world is its investment in a research project for an optical interconnect for high speed data transfer using light.

The development of this system could revolutionize the entire computing industry as it would dramatically increase the processing capacity of modern computers and thus would provide Intel with a tremendous opportunity to bring to the world an entirely new standard of computing and once again become the pioneers of modern computing.

Intel is making sincere efforts to acknowledge modern computing needs to provide efficient solutions for computing needs, which is evident from acquisition of major companies in various sectors of the computing industry.


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