Buss4 Section B Essay

Topics: Advanced Micro Devices, Innovation, Success Pages: 5 (1733 words) Published: June 13, 2011
Q.4 The Intel Corporation produces microprocessors that are used in computers. It has a market share of over 75% and has been praised for its highly innovative culture. Do you think that an innovative culture can be relied on to guarantee the future success of a business? Justify your answer with reference to Intel and/or other organisations you know.

An innovative culture within a business is where a business is always open to introducing something new in the business such as a product or service with the beliefs of the employees supporting this. Successful companies actively cultivate new ideas, put those ideas to work quickly and efficiently, and harvest the business value benefits of successful innovations. Discussions of innovation often focus on what a company offers, that is, its products and services. nnovation is not just about what a company offers, innovation is also about how a company conducts business and how IT innovation can transform an organization into a significantly more efficient company for the future. Senior executives at Intel believe in investing in innovation through the downturn, because they found innovation to be very good for our financial and production positions. Intel provides the needed financial backing and leadership vision, and our company is successful through downturns as a result of our innovation practices. Innovation that gives intel a good financial position could allow the business to fund future projects which could lead to future success for the business. Intel continues to pour more than $4 billion a year into R&D. It does so because it believes that recessions are a great time to gain ground on the competition. What's more, Intel's identity is inseparable from innovation. Intel’s board decided to invest $7 billion in new chip plants in Oregon, Arizona and New Mexico. The first chips from the plants arrived this month, made with techniques that let the company create smaller, faster and lower-power products than its main competitors. An innovative culture may encourage the development of new products and processes, can reduce costs, improve quality and differentiate its offerings to consumers. As a company grows, its economies of scale can become more beneficial for example bulk buying may become cheaper. Just as it has in past downturns, Intel has used its cash to advance its manufacturing process and technology while rival chip makers have struggled to stay afloat in the recession. An innovation culture at Intel has allowed them to gain ground over their competitors as they have invested in the economy in a recession. This investment may not of happened if Intel hadn’t had innovative culture within the business as they look for new ideas to improve the business even in a recession. Broader technology spending is on the rebound, suggesting that both companies and consumers are more optimistic about their own futures. Intel, the first major tech company to report earnings this year, said that revenue rose 28 percent to $10.6 billion in the fourth quarter, and the company earned the largest gross profit margin in its history. Net income was $2.3 billion, or 40 cents a share, up tenfold from the $234 million, or 4 cents a share, it earned in the last quarter of 2008. This proven success was down to an innovative approach in the market to invest in new chips whilst the market was struggling with competitors content with their market share. Intel have generated profit through the innovative culture that has forced them to take risks that have paid off for the business. This profitability definitely gives Intel a good chance of future success as they have more money to invest. A technology research firm, reported that worldwide PC shipments rose 22 percent to 90 million units during the fourth quarter, which is a healthy recovery from the dismal fourth quarter of 2008. Because of its investment in the downturn, Intel, which makes the chips at the heart of most PCs, is poised...
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