Mr Shah

Topics: Marketing, Strategic management, Mobile phone Pages: 1 (262 words) Published: February 7, 2013
4) What challenges does Intel face as it moves into home entertainment, healthcare and mobile communications? Adopting Diversification from Ansoff product growth matrix
There are two forms of diversification: Namely related and unrelated. Related diversification is entry into a new business activity that is related to a company's existing business activity where as unrelated diversification is the entry into an industry that is completely different from any of the company's value chain activities in its present industry or industries (Ansoff, 1957). According to Jobber 2010, Diversification is one of the most risky options, especially when the entry strategy is not based on the core competences of the business. The challenges Intel faces are as follows:

* Fierce competition from market leaders and other competitors already in the industry. * The brand name Intel does not register in the minds of consumers when it comes to home entertainment and healthcare. So they will need to invest heavily in marketing to build that awareness. * Decline in profitability especially if the strategy goes wrong. * Intel’s reputation might be tarnished if the diversification strategy completely fails * Going into the mobile telecommunication industry is an example of related diversification and thus can help in minimising the risk of failure as well as boosting sales as most Smartphone’s uses dual and quad core processors. Here Intel is able to leverage its technical know-how to gain some advantage

Ansoff, H.I (1957), Strategies for Diversification, Harvard Business Review, Vol. 35, Issue. 5, pp. 113-124 Jobber, D. (2010), Principles and Practice of Marketing, (6th Edition), London: McGraw Hill,
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