An Analysis of Porter's Five Forces in the Context of Intel

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 absence of strong Internet presence and powerful IT platform, so the bargaining power of suppliers is highly controlled. This presents a potent competitive advanatge for Intel, in that they are able to control the prices of their raw materials, thus resulting to more controlled expected earnings.

Intensity of Rivalry between Competitors ~ Rivalry is not very intense, as there are only a few dominant industry competition, and few still have powerful and fully integrated IT platforms. In fact, as one of their aims is not to compete on the Fairchild Semiconductors level, they have managed, at this point in time, to make a safe niche of their own in the industry with which to call solely their own.

This first phase that Intel went through has been an indicator that the company is bound to face a lot of changes in the run primarily due to the nature of business that they are in, likewise the PEST Analysis of the semiconductor industry in general.

EPOCH II

With the dawn of the 1980s also came a more crowded marketplace, which prompted the digital