Intel : Managing Working Capital

Abstract

Intel is the undisputed leader in the microprocessor industry with about a 90% market share. Since 1968 when it was founded, Intel has launched many ground-breaking products. Many analysts attribute Intel''s success to its technology, innovation and management. It has also attempted to become a disciplined company that maximises operational efficiency, one important dimension of which is working capital management. The case outlines various aspects of working capital management at Intel.

INTRODUCTION

In early 2004, Intel was the undisputed leader in the microprocessor industry with about 90% market share. Since 1968 when it was founded, Intel had launched many groundbreaking products. By 2004, it had 450 products and services ranging from the ubiquitous PC microprocessors like Pentium, the 64-bit high-end Itanium 2 to mobile computing chipsets such as Centrino. Intel ended 2002 with revenues of $ 26.7 billion. Many analysts believed Intel's success was as much about technology as about management. They attributed the success of Intel to its unbroken leadership chain. As one great leader retired, another took over. While Intel was well known for innovation, it had also attempted to be a disciplined company that maximized operational efficiency. Intel realized that as competition intensified, working capital management would become increasingly important.

Andrew Grove (Grove), a first generation immigrant from Hungary, soon joined Noyce and Moore. Moore handled long-range planning and Grove was responsible for manufacturing. Noyce and Moore had an aura about them owing to their earlier association with Fairchild Semiconductors. Career aspirants perceived Intel as a hot new company. Intel's revenues grew rapidly driven by sales of semiconductor memory to large computers.

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        Case Code   FINA010
   Case Length    8 Pages
              Period    1968 - 2003
 Organization     Intel
        Pub Date     2005
Teaching Note    Not Available
     Countries    USA
      Industry    Semi Conductors

Issues

Intel, Finance, Managing Working Capital

Intel; Working capital; Microprocessor; Balance sheet; Advanced micro devices (AMD); Finance statement; Finance; Working capital management; Intel Communication Group; Centrino; Profit and loss statement; Operational efficiency; Innovation; Technology

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.