Internationalization of an MNC Sample Paper.
The mushrooming number of corporations and companies in the global market is an
indication of the high potential and budding success that the business sector holds in virtually
any location. Start-up firms that begin their scale of operations in a regional or localized manner
end up considering the possibility of expanding and taking their ventures internationally. Internationalization of an MNC Sample Paper.This is
because the advancements made in technology and communication have made it easier for
business to be conducted effectively and conveniently. Reputable and renowned companies such
as Starbucks and even Microsoft originally began as simple local ventures that spread their wings
to other countries after having realized the potential of international marketing. The latter can be
regarded as one of the profitable divisions of marketing that enjoys a large customer base and
diversity when it comes to customer requirements.
Internationalization takes into account a number of factors that are crucial towards the
success of any firm’s activities. These elements include the demographics, literacy levels, market
segmentation as well as media coverage that directly affects how a product or service will be
received in a given country. Intel is indisputably one of the largest giant tech firms that has
managed to embrace the concept of international marketing and make it work to its advantage.
The company initially began its operations across different locations in America before trying
out in other countries such as Singapore. The firm has been rated as one of the most successful
and thriving businesses operating within the technology and electronics industry. This paper is a
comprehensive and critical essay that analyses Intel Singapore in terms of how this multinational
corporation has made internalization work to its advantage.
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Task for the Essay
Discuss the process of internationalization with reference to one MNC in a specific
country. Explain how this firm has managed to stay relevant in the industry using internalization
theories as well as business literature.
Multinational Company Chosen For The Essay
Intel Corporation- Singapore
a) Overview Of Intel Singapore, Its MNC Status And International Objectives In Regards
To Vital Company Statistics And Industrial Products
The Intel Corporation is a giant multinational firm that operates within the technology
industry and it is rated as one of the most profitable and reputable worldwide. Internationalization of an MNC Sample Paper. The most well-
known and recognized product of this firm is the microprocessor that is found in virtually any
computer or laptop (Heires, 2007). In fact, Intel supplies these processors to major established
companies such as Lenovo, Apple, Dell and even HP. The line of products that are sold by Intel
is diverse and it also encompasses interface controllers, graphical chips, circuits that are
integrated as well as motherboards.
Intel Corporation has been in existence for over five decades and it was initially founded
in America. It is from this headquarter region that the firm has managed to expand and
internalize to other countries such as Singapore (Giovinazzo et al, 2013). This regional branch of
Intel is located in one of the busiest places in this Asian country from where it serves the needs
of customers. Intel Singapore is located within the Kallang Avenue inside the Aperia building
tower. It is from this office that this giant tech firm serves the clients and satisfies all their needs
when it comes to matters of technology (Page and Childers, 2012). Further, Intel Singapore also has international objectives apart from simply selling electronic devices and other software. The
firm strives to become innovative with each passing day so that it can satisfy the needs of
consumers as trends continue to evolve and merge. The following part of this essay evaluates the
industry in which the Intel Company operates from the country of Singapore.
b) Analysis of the industry and the country (Singapore).
The technology and electronic industry is one of the fastest growing sectors that shows a
lot of potential for growth in any country in the world. The same case is true for Singapore where
the Intel Corporation has thrived immensely due to the growth of this industry (Heires, 2007).
What’s more, Singapore is one of the few Asian countries that has demonstrated that there is a
growing demand for Intel products within the target market. An analysis of this industry also
illustrates that shows that this tech firm has one of the largest market shares since its brand is
well recognized and trusted by many (Qiu and Bai, 2012).
The revenue of Intel Singapore is estimated to be sixty percent of its earnings with a large
part of this being obtained from the sale of hardware and other components that are frequently
used in desktop computers and laptops. What’s more, Intel also benefits from the sales made
from its data centers, software services and even the volatile memory section. At the same time,
a significant part of Intel Singapore earnings are also obtained from the purchases made by
computer firms such as Lenovo, Dell, Apple, Toshiba as well as Acer (Verbeke et al, 2014).
This firm is known to enjoy large market shares not only in Singapore alone, but also
across the globe. The fact that it is the single manufacturer of microprocessors means that it
accumulates over eighty percent in profits (Björkman et al, 2011). The rival firms to Intel
Singapore such as Silicon systems and VIA technology do not even come close to what this
company does. This firm has managed to have such a huge customer base in Singapore since its products are superior and of high quality while at the same time Intel is a household brand
among many people (Qiu and Bai, 2012). What’s more, the wide range of products sold by this
firm enable any client in this Asian country to be assured that they have computer related
solutions at their fingertips. For instance, it is possible to get microprocessors and other hardware
components such as motherboards, chipsets, Intel gateways and even state drivers (Qiu and Bai,
2012).
This giant tech firm also deals in quality software such as wireless connections and
computer programs. The multinational status of this company has been largely achieved through
internalization where the firm has spread to most countries across the globe. The following part
of this essay analyses how the Intel Company has internalized its operations and how its
multinational status has assisted the firm in its progressive growth.
c) Analysis of the Internationalization Process of Intel Using Internationalization
Theories.
Internalization is a business concept that is mostly practiced by well-established firms
where they decide to conduct their operations within their organization as opposed to relying on
an external source or market. This means that internalization is quite cost effective since the firm
finances its own marketing efforts inside of relying on intermediaries to do so (Chirico and
Salvato, 2016). It is also through this process that most multinationals prefer to invest such that
they trade internally as opposed to going through outside their territory. Internalization is mostly
beneficial when a firm decides that they are best suited to manufacture a given product and profit
from it highly as opposed to hiring an external firm to do it for them (Feinberg et al, 2009).
Similarly, this process is also advantageous when it is used to deliver and supply finished
commodities to customers as opposed to contracting supplying companies or shipping agents to do so. Intel Singapore practices internalization in virtually all its activities because the firm
manufactures all of its products. What’s more, the firm relies on its sales and procurement
departments to distribute all of its products and brands (Feinberg et al, 2009). Internalization has
really been profitable for Intel Singapore since it manufactures superior products that are sold to
virtually all computer companies and in the process, the firm rakes in huge profits.
The fact that reputable and giant firms such as Lenovo, Toshiba, Acer and even Dell top
the list of the most loyal clients for Intel Singapore means that this firm has benefited from
internalizing its activities as opposed to hiring an external firm to assemble the microprocessors,
chipsets or even the motherboards (Fumihiko and Yuriko, 2014). Additionally, Intel Singapore
has also benefited from internalized trading where they use their own stocks and securities to
increase leverage for the company. Internalization as a business process can be best understood
by use of certain theories that can clearly demonstrate how Intel Singapore has managed to
remain profitable by embracing this approach.
The internalization theory that can best describe the approach used by the Intel
Corporation is the Uppsala internalization model (Björkman et al, 2011). The latter is a concept
that emphasizes that businesses should first understand their target market before they proceed to
subdividing it into small segments or subsets. What’s more, the positioning of the company’s
brand largely depends on this theory because it determines how it will be received among the
customers (Curci et al, 2012). In the case of Intel, the Uppsala strategy of internalization shows
that the firm first concentrated on developing and growing its domestic and local market in
different places across the United States.
This strategy was very valuable because the country is highly populated and as such, the
firm was assured of getting and obtaining a large customer base once it penetrated through these locations (Björkman et al, 2011). The company was originally founded in California and it is
from here that Intel then spread and opened up branches across other states such as New York,
Chicago and even Washington. This approach was used by this tech firm to attract a large
number of clients for the duration of several years after the company was established. It was after
this period that the Intel Company's management team saw it fit to expand and look for
international markets (Feinberg et al, 2009).
The internalization strategy of Intel Corporation was quite different as it only chose the
countries were located in different continents. The fact that Intel opened up an office in
Singapore means that its market research was exhaustive and elaborate such that the firm’s
management concluded that it would be profitable to operate within this region (Fumihiko and
Yuriko, 2014). The Uppsala model of internalization has been really useful for Intel since the
firm has been able to utilize the majority of local raw materials and outsource only a small share
of them. Internationalization of an MNC Sample Paper. This is evident from the product list of the company that ranges from microprocessors,
chipsets for motherboards, integrated circuit systems, embedded chips and even graphic memory
cards (Feinberg et al, 2009). This explains why Intel has been one of the most successful
businesses globally when it comes to the technology industry.
The multinational status of this firm has also contributed to making the internalization
process successful since Intel is a well-known and celebrated brand (Fumihiko and Yuriko,
2014). The Uppsala model of internalization has been instrumental when it comes to helping the
company stabilize its prices such that the cost of goods is based on both the supply and demand
prevailing in the market. Further, being the sole supplier and distributor of some of the most
crucial computer parts is an aspect that Intel has managed to understand and not exploit its
customers for their sole benefit (Fumihiko and Yuriko, 2014). Internationalization of an MNC Sample Paper.This means that the products of Intel Corporation outlet are not fixed but they are flexible enough to factor in every client’s
needs.
When it comes to the preferences of customers, this strategic model makes sure that they
keep refreshing their goods and fashion products for the satisfaction of clients. The computer
parts are constantly upgraded as technology continues to change and most desktops and laptops
become installed with new operating systems (Feinberg et al, 2009). Intel Corporation is known
to trade for a new product on a weekly basis and then monitor the purchasing behavior of
consumers. In case, this product does well, it remains in circulation, but if not, then it is removed
from the shelves. This approach also helps with the determination of market trends, quality of
products as well as other suitable subsidiaries within Singapore and also in other countries as
well. Internationalization of an MNC Sample Paper.
The internalization process of this tech firm also includes learning and studying the
supply and demand levels of global markets so that they can know which price is friendly to their
customers. Additionally, this tactic also helps with the process of revenue accumulation that is
important in helping the firm expand its operations such that it can comfortably open new outlets
in overseas locations (Fumihiko and Yuriko, 2014). What’s more, revenue allocation is also
important when it comes to logistics that caters for the purchase of supplies and other raw
materials. Moreover, the Uppsala model has also been successful for Intel because fewer
resources are used in terms of outdoor advertising (Björkman et al, 2011). Internationalization of an MNC Sample Paper.
Instead, the company is able to divert these finances into doing intensive research on the
regional markets, the preferences, trends and choices of its target customers. It is evident that the
Uppsala model of internalization has helped the Intel Corporation to remain extremely
competitive and profitable at the same time. The last part of this essay analyses how the Intel Corporation, based in Singapore executes its activities as a global organization and multinational
firm.
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d) Evaluation: The Actions Of The Organization, Industry Analysis And Reflection On
UN Global Compacts And MNC
The universal nature of multinational enterprises is a critical factor that enables them to
thrive in a highly competitive market. This true for a firm such as Intel Corporation that
established facilities that enable it to operate in numerous countries such as Singapore and others
that are outside of America (Feinberg et al, 2009). What’s more, this tech firm has a have a
centralized system of operation where one of the branches is used as the main headquarter and
hub of all the business activities as is the case with virtually all multinationals (Björkman et al,
2011). The actions of Intel as a multinational organization have a global outreach, as evidenced
by the number of people using this firm’s products. Nearly every person with a computer, laptop
or any other android device has an Intel product within it. This shows that this multinational has
exceeded the expectations of many, including those of the United Nations as well (Curci et al,
2012). Internationalization of an MNC Sample Paper.
The constant excellence of this enterprise obviously emanates from its desire to thrive
and conquer the world through the sale of superior and sophisticated products. Intel Corporation
has managed to enjoy its reputation and renowned fame thanks to its outstanding record when it
comes to the manufacture and distribution of computer hardware and components.
Conclusion
Multinational companies are business ventures that enjoy a large market size and
consumer loyalty in the many countries in which they operate. Virtually all multinationals have assets and facilities that enable them to operate in other countries apart from the home country.
The expansion and rapid growth of the Intel Corporation within Singapore is a perfect example
of how multinationals enjoy high levels of returns and revenue from being strategically located
in diverse placed. The instrumental success of Intel as a giant tech firm has largely been made
possible through the process of internalization. Internationalization of an MNC Sample Paper. The latter is a concept that is used by most firms
so as to capitalize on profits and it entails concentrating on manufacturing products internally as
opposed to hiring an outside firm.
Internalization for Intel is supported by the Uppsala theory, which emphasizes that
businesses should first understand their target market before they proceed to subdividing it into
small segments or subsets. This is exactly what this firm did and its success in Singapore is a
perfect illustration that this approach has worked effectively for the company. This theory also
affirms that all multinationals are better placed to attract more profits because their mode of
operation is decentralized. This enables the company to benefit in many ways with the most
advantageous benefit process being outsourcing. It is also through internalization that the
existence of an enterprise is able to thrive both locally and regionally. Internationalization of an MNC Sample Paper.
The wide array of products sold by Intel allows the firm to maintain a large market share
and annual sales turnover at the same time. The list of clients for this firm also includes reputable
brands and giant firms such as Dell, Toshiba, Lenovo and even Acer. Further, Intel capitalizes on
profits and earnings since it sells some of the most crucial computer components that are hard to
source from elsewhere. Microprocessors, motherboards and eve chipsets are some of the highly
ranked brands that Intel produces and subsequently distributes. Its strategic location in Singapore
and the presence of a large customer base are two elements that have fused in synchrony to
provide the immense success the firm enjoys to date.
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