Intel Corporation is a chip and microprocessor manufacturing firm, headquartered in California. It is the 2nd largest company by revenue of this sector. Let us understand Intel by its PESTEL analysis. Let us know about “Intel Pestel Analysis”
PESTEL analysis is the study of the macroeconomic factors like politics, economy, technology, laws, etc. that could affect business. These factors could create opportunities as well as threats for Intel. Timely analysis of such factors could save Intel Corporation from downfall. Additionally, the company can plan its strategies according to the impact of outside factors.
What Is PESTEL Analysis?
PESTEL is the study of outside factors that could affect the performance of a company in the market. These factors are termed macroeconomic factors. PESTEL/PESTLE is the acronym for –
P- Political Factor
E- Economic Factor
S- Social Factor
T- Technological Factor
L- Legal Factor
E- Environmental Factor
The political factors are the political scenario of a country in which a company operates. It includes ideologies of the ruling party, new laws, expected changes in regulations, etc.
The economic factors include national income, per capita income, and the wealth of a country. It also includes tariffs, import and export duties, regulations regarding foreign trade, and other related factors.
The social factors are related to the social and cultural aspects of a country. It is defined by the behavior of people of a community and their beliefs. Factors like the latest trends also come under this criteria.
The technological factors are related to changes in technology in the market that could affect the company’s business. With the innovations of new technology, every day various charges are coming into the market. The firm which runs with the latest technological changes is the one who succeeds in the market.
The environment is also a factor that has a significant impact on the company’s business, growth, and market reach. Timely identification of such factors could earn a huge profit for the company.
In the market, legal factors govern the activities of a company. Changes in the law have a significant impact on the business of any company. Laws related to subjects in which companies need to be analyzed regularly because breaching laws would be very costly for any company.
If all these factors of the outside world are timely analyzed, then the company can save itself from market threats and better utilize the opportunities. Therefore, every company prefers doing timely PESTEL analysis.
Intel Corporation PESTEL Analysis
Government Support For Intellectual Property Rights
In many countries, the government has now come with rights to protect intellectual property. Intellectual property includes non-physical properties like copyright, trademarks, etc. Because of which the company is freer to develop new variations in its microprocessors and chips.
Monopoly And Competition
Government is willing to reduce monopoly from the market. This idea brings both opportunities and threats for Intel. In the open market, when more laptops and desktops will come by various new firms, Intel’s business will grow. But with government support for new players in the market, Intel’s competitors will also come into the game.
So with the government’s intervention in reducing monopoly Intel will face a double-sided effect. With the increase in business, it also needs to keep its product image to face the upcoming competition.
Government’s Idea Of Globalization
Globalization is the concept of free import and export of goods and services which turns the whole world into a global village. The government’s policies are happily supporting globalization, this brings the chance for Intel to expand its business in the foreign market. Additionally, globalization also brings competition for the company from the whole world. That too is not just the global market but in the home country as well.
Economies Of Developed And Developing Countries
The economy of developed countries remains stable most of the time. This gives a chance to Intel to increase its reach in the market through various investments and innovations. There are investors and buyers in developed countries for semiconductor companies like Intel.
In developing countries also, there is a wide scope of opportunities for Intel. The use of laptops and computers is fastly increasing in the markets of developing countries of Asia. Intel has a large market to capture in this part of the world.
USA-China Trade War
The US-China trade war is a threat for all the companies in the US market. Due to the allegations of data thefts on Chinese apps and hardware, the US has stopped its export of technical things to China. This tremendously affected the huge market of Intel in China.
With the rising income of people in developed and developing companies, buyers are willing to buy laptops and computers with the Intel processor embedded in them. This economic situation is advantageous for the company.
Social And Cultural Factors
Increase In Wealth
The increase in income directly affects the purchasing power of people in the community. With more income, people can buy computers and laptops embedded with Intel’s microprocessor and chips. Hence, this social trend is beneficial for the company.
Increased Reach Due To Internet
The use of the internet is growing day by day, as a result, the company is expected to come up with better competitive products for communication over the internet. Hence, Intel needs to add this in their strategy keeping in mind the social factors that could affect their business.
Similarly, the growing use of the internet is also an advantage for the company. Official works, communications, and even trade are taking place online. Hence, the demand for laptops and computers are increasing which in turn results in more market for Intel’s semiconductors. The Internet also gives a wide market to the company to sell its products.
Increase In The Use Of Smartphone
Smartphone users are increasing day by day. In the last two years of COVID-19, it increased even more in developing countries. But Intel is not a big brand in smartphones. It mainly deals in processors in laptops and computers.
Secondly, the increase in the demand for phones could significantly affect the market of its semiconductor products. Hence, the company needs to bring out strategies to face these challenges.
Increasing Research And Development Based Working
The companies in the market now work with the idea of research and development (R&D). Every company is working towards the development of this sector for their overall growth. This poses the threat of competition in front of Intel. Due to better implementation of research and development, its competitors could capture the company’s major market share.
Secondly, Intel itself could adopt the rapidly growing idea of research and development to deal with this threat. This strategy could also help Intel to develop its products in the market through rapid research and development (R&D).
Programs Related To E-Waste Disposal
Products of Intel like the microprocessors are the e-waste that is difficult to degrade. Therefore environmentalists strongly discourage the use of such products. Many consumers seriously react towards such campaigns which is a threat to Intel’s market.
On the other hand, Intel could deal with this threat by bringing programs for proper e-waste disposal of its products. This way, it could also capture the market share of its competitors.
Environment Protection Programs
With the increasing concern of environmental degradation, the government is bringing strict laws for companies that deal in electronics. Consumers also don’t want to buy processors with low energy efficiency. This is a threat for Intel, which could be turned into an opportunity. Intel could invest in environmental protection programs to attract consumers and satisfy government regulations.
The government is taking the laws regarding patents very seriously in the international market. Hence, the company can bring innovations and solely capture the huge market.
Strict Laws Regarding E-Waste Disposal
The government is taking the issue of e-waste disposal very seriously. Hence, the new laws are a threat to Intel. Customers also don’t want to buy products against the government’s policies. But in this, Intel also has the opportunity of adopting environmentally friendly ways of e-waste disposal to attract more customers.
Changing Laws Regarding Monopoly
The Intel corporation enjoys a monopoly in the virtual market. The other competitors are not anywhere around the company. But the changing policies of government governing competition and monopoly is a threat to Intel’s monopoly in the market.
Intel is a major player in the semiconductor microprocessor industry. Its PESTEL analysis confirms many opportunities and threats posed by macroeconomic factors. These are due to globalization, technological growth, stable economies, trade war, etc. Timely action can help the company in turning threats into opportunities and making the best use of opportunities.
- Why is PESTEL analysis important for Intel?
Answer: PESTEL analysis aware firms about the challenges they may face from the outside environment after taking some action. Therefore, to plan out ways of dealing with such political, economic, social, technical, environmental, and legal challenges, PESTEL analysis is important for Intel.
- How does PESTEL analysis aid in strategic planning?
Answer: PESTEL analysis be aware of Intel about the upcoming market challenges. With the help of this market information, the company can make strategies to conquer the opportunities even in diverse conditions.