Competencies refer to the fundamental knowledge owned by the firm, and to be distinctive they are not confined to functional domains but cut across the firm and its organizational boundaries (, 2002). The notion of distinctive competencies, first discussed by (1957) and (1965), was further reiterated by and (1990). In their analysis, key resources, skills and technologies are called core competencies. The following takes the Integrated Electronics (Intel) case and analyses the giant digital company’s core competencies by way of the three epochs that it has gone through since 1968. EPOCH I
This first era that Intel has gone through, specifically between the years 1968 and 1985, has displayed the company’s corporate values which have become the firm’s foundation for the success that it will witness in the succeeding years to come. The development of their products to impact their core competencies involved an approach to management which was structured, disciplined and controlled. They have a corporate culture that fosters constructive debate, in where rewards are associated with high performance, and which allows for the recruitment process to be focused on hiring people suited to their culture. As for the strategic fit, or how well Intel’s mission and strategies fit its internal capabilities and its external environment, the company has taken pains to make sure that their aims are clear, specifically, this is to make memory chips which did not compete directly with Fairchild Semiconductors and other companies in the same field because they were complex. Their strategies, therefore, are moulded on the ground work that they are a firm of less-complex products, which partially contributed to the informality of their planning system. Additionally, their technical excellence is linked to goals which were laid out by the management, providing a fit and a marriage of their mission and strategies to their internal capabilities and external environment. The main characteristic, therefore, of the Intel company in this first phase is its informality in their planning system, in that ideas bubbled up from engineers and marketers which the top management assessed and allocated funds to. An analysis of Porter’s five forces in the context of Intel would reveal that: Threat of New Entrants ~ The threat of new entrants is very low due to high entry barriers to the industry. The economies of scale, i.e. the not-so-competitive prices in the industry, the sizeable amount of capital and investment requirements and the difficult access to industry distribution channels are some of the contributors to the high barrier of entry to the semiconductor industry. Additionally, it is not easy to penetrate this type of industry due to the requirement of highly specialised skills to be able to barely survive the competition. Threat of Substitutes ~ The threat of substitutes is low, as the price to shift from one semiconductor provider is relatively large. As companies are often looking for ways to achieve competitive advantage through buying high-end semiconductors which would provide the highest efficiency, the buyer’s willingness to substitute is pretty low once they find that the provider is very suitable to their needs. Also, the price and performance of the substitutes, coupled with the relatively high cost of switching to substitutes do not present a grave threat to the company under analysis. Bargaining Power of Buyers ~ As there are only a few semiconductors providers who can compare to what the company has managed to achieve in this era, the bargaining power of buyers is not as great coupled with the industry being a key supplying group for the buyers, which in this case, are large companies. Bargaining Power of Suppliers ~ there are is a sparse of dominant suppliers in the industry, and they so far have not threatened to integrate forward to the industry, or threaten to set up their own retail outlets due to...
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