Intel Corporation PEST and Value Chain Analysis Essay

Intel Corporation PEST and Value Chain Analysis - Essay Example In the year 2001, the IT industry faced global decrease in demand for IT products which adversely affected the balance of trade of US and other countries (Buffet 2011). In this regard, the US government improved its tax laws, labor policy, tariffs and trade liberalization policies to attract the global consumption for IT products from US manufacturers. Robert (1990) undertook a study to examine the impact of Japanese trade liberalization policy and tariffs in semiconductor market on the US manufacturers. This positive political environment acts as an opportunity for Intel Corporation to capitalize upon its products and expand globally. 2) Economic Factors: The US mixed economy has a GDP growth rate of 2.5 percent in the third quarter of 2011 which is a decrease by 0.4 percent from previous year (Bureau of Economic Analysis). The International Monetary Fund reported that the Gross World Product of the US GDP is $15 trillion dollars that is 23 percent at the market exchange rates (Grey hill Advisors). Furthermore, it observed that this amount is equivalent to 20 percent of Purchasing Power Parity or PPP (DeNavas-halt, Proctor & Smith 2011). US ranks third largest exporter. Its public debt amounts to $15.03 trillion dollars and poverty is 15.1 percent according to 2010 estimates (Treasury). The CPI Inflation has been estimated as 3.5 percent between October 2010-2011 period (United States Bureau of Labor Statistics). According to 2009 estimates of World Bank, the US economy is largely based on its private sector enterprises accounting for 86.4 percent of its economy. The large contribution of private sector in US economy means an opportunity for Intel to expand and benefit from the overall affirmative macro-environment factors. However, PricewaterhouseCoopers conducted... Intel Corporation is the US leading semiconductor manufacturer that maintains a significant global market share of semiconductor industry. In the recent global recession has adversely affected the US economy. However, the recovery has created a tremendous increase in the exports for semiconductor based microprocessor chips throughout the world. The US economy’s growth is largely due to the major contributions of this sector. As a result, the US economy is growing and encouraging the future revolution in the semiconductor technology. The global trade liberalization movement in response to the global demand for newer and updated technological products has reduced trade tariffs that US government welcomes with open arms. As a result, the growth of microprocessors and other PC components picked tremendous volume to become the largest contributor of revenue for the US economy. Intel Corporation has a favorable macro-environmental analysis which only has one issue and that is the un precedented recession of the US economy. In terms of value chain analysis, Intel Corporation has a sound value chain that is helping it to maintain its competitive edge over other competitors like AMD.