Businessmodel of Intel

Customer Segments

Intel has a segmented business model, with customers who have slightly different needs:

• Original Equipment Manufacturers (OEMs): Manufacturers who resell Intel’s offerings under their own name.
• Original Design Manufacturers (ODMs): Manufacturers who provide manufacturing and design services to unbranded and branded private-label resellers.
• Other Manufacturers: Manufacturers of industrial and communications equipment. ### Value Proposition

Intel offers three primary value propositions: accessibility, performance, and brand/status.

The company’s products are designed to operate on a wide variety of operating systems. This is made possible through its cooperation with customers and other third parties. As a result, its chips are suitable for a broad selection of end-users.

The company is typically faster than competitors when it comes to adopting next-generation process technology and taking products using that technology to market. For example, its solutions currently utilize 14nm process technology and it is developing 10nm process technology for the future. Consequently, its offerings tend to demonstrate superior performance.

The company has a well-established brand. It is known as the producer of the first microprocessor. Also, it gained a highly positive reputation due to the speed of its line of Pentium processors. It has been recognized for its prominence. For example, Interbrand ranked it at #14 in its list of “100 Best Global Brands” in 2014, as well as #15 on its list of “Best Global Green Brands” the same year.

Channels

Intel’s main channel is its website, through which it directly markets its products to customers. It further sells products through resellers and authorized distributors. The company also promotes its offerings through advertising on social media and TV and attending trade and consumer events.

Customer Relationships

Intel’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. Its website features a wide variety of resources they can use if they require assistance, including a content library, a documentation library, product information materials, videos, and a section featuring answers to frequently asked questions. That said, there are also a community component in the form of peer and expert forums and a personal assistance element in the form of phone and e-mail support.

Key Activities

Intel’s business model entails designing, developing, and manufacturing its products. While its offerings are usually produced at one of many Intel facilities, some manufacturing is assigned to subcontractors (namely board-level products and systems).

Key Partners

Intel maintains the following partnership programs that provide training, support, and member-only rewards:

• Intel Technology Provider: This involves companies that recommend or resell tech products to consumers and businesses. Partners include GST, AMAX, Maingear, and Rave.
• Intel Authorized Distributor: This involves companies that distribute Intel products.
• Intel Inside Program: This involves companies whose offerings feature Intel products. They utilize the “Intel Inside” logo on the offerings’ exteriors or in their advertising campaigns and receive commissions from the company in exchange. ### Key Resources

Intel’s main resource is its research and development team, which ensures that the company is on top of next-generation processing technologies, giving it a competitive advantage. The company also relies heavily on its sales and marketing staff.

Cost Structure

Intel has a value-driven structure, aiming to provide a premium proposition through quality. Its biggest cost driver is research/development expenses, a fixed cost. Other major drivers are in the areas of marketing and administration, both fixed costs.

Revenue Streams

Intel has three revenue streams: Platform Revenues (Client Computing Group, Data Center Group, Internet of Things Group), Software/Services Revenues, and Other Revenues (mostly revenue from the New Devices Group and Non-Volatile Memory Solutions Group).