While this law held well given the massive demand and development in the industry, to meet the ever increasing demand Intel calculated that it would need to set up a plant every 9 months! Doing this, as well as maintaining high levels of R&D spending, was very expensive, especially in the face of competition and replicability of the technology. Also to remain competitive, Intel could not pass on the costs to the customers. The only way it could continue to remain profitable while reducing costs was by diversifying into markets where it would cost lesser to manufacture than in the US. Accordingly, it got into markets such as Malaysia, Israel, Philippines, Ireland, and China where manufacturing costs were 30-50% lesser than in the US.
Following 2 decades of global expansion into low cost markets, when in 1996 Intel decided to set up another plant, it chose not to go back to any of the already established countries as having too much concentration in any one region had the potential to expose the company to Labor, Geo-Political and Economic risks.... [continues]
Cite This Essay
(2010, 11). Intel's Site Selection Decision. StudyMode.com. Retrieved 11, 2010, from http://www.studymode.com/essays/Intel-s-Site-Selection-Decision-462262.html
"Intel's Site Selection Decision" StudyMode.com. 11 2010. 11 2010 <http://www.studymode.com/essays/Intel-s-Site-Selection-Decision-462262.html>.
"Intel's Site Selection Decision." StudyMode.com. 11, 2010. Accessed 11, 2010. http://www.studymode.com/essays/Intel-s-Site-Selection-Decision-462262.html.