CASE STUDY

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...

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...

Excerpts

Corporate Background

A popular story which went around in Intel was that one weekend afternoon in the spring of 1968, Gordon Moore (Moore) dropped by Robert Noyce's (Noyce) home. The two decided to launch a new company to pursue large-scale integrated (LSI) memory. That was the moment when Intel (abbreviation of Integrated Electronics) was born though the company was officially launched in the month of July that year. Little did they know that their new venture would define contemporary electronics and change the way the world worked, lived and played...

Business Segments

Intel's major products included microprocessors; chipsets; boards; flash memory; application processors used in cellular handsets and hand-held computing devices; cellular chipsets; networking and communications products, such as Ethernet connectivity products, optical components and network processing components, and embedded control chips (micro controllers)...

Working Capital

John Mathew, a young MBA had joined Intel in its Corporate Finance Department. His supervisors asked him to understand and analyze the financials of the company and make suggestions on improving Intel's working capital management and compare it with that of rival AMD...

Exhibits

Exhibit I: Intel, Corporate SnapshotExhibit II: Intel Profit & Loss StatementExhibit III: Intel Balance SheetExhibit IV: AMD - FinancialsExhibit V: AMD - Balance Sheet

ASSINGNMENT 2

ON

WORKING CAPITAL

MANAGEMENT

SUBMITTED TO:MISS. HARMEET KAUR

SUBMITTED BY: AMAN GUPTABBA6