Misalignment at Intel

Overall Intel is a great company and implements strategies effectively. One area of misalignment is in Structure and Shared Values. While working at the company, everyone knew the corporate values and even had them printed on the back of every employee badge. Employees also, for the most part, act in ways that align with corporate shared values. The one big misalignment is that there are organizational silos and lack of communication between divisions.

Intel prides itself on innovation as a value and sharing values between parts of the company. With strong silos it was hard to communicate "best known methods" or creative ideas. While interning, I tried to get inputs from as many different employees in a wide array of divisions. Whenever I spoke with people they were always put off by what people in other divisions said and wanted to prove that their division was the most creative.

While every employee was aware of Intel's Shared Values, they did not always live by them. The organizational structure conflicted with Intel's value of sharing ideas and free thought flow. This created tensions between people in different divisions and unnecessary competition. Everyone was kind to me and other new employees, but once roles were set, people were mostly friendly to members of their same group. Perhaps by limiting the hierarchical structure at Intel, the shared values will not misalign as much.

Log Exports Hammer Lumber Mills

In the last 6 months, the United States (particularly Oregon and Washington) has exported $487 million of softwood logs to China. The projected full year amount for 2011 is more than China imported in 2006-2010 combined. This increased demand for logs is great for the US logging industry, but it has the opposite effect on the milling industry.

With demand for logs so high, prices have been driven up to over $600 per thousand board feet. Millers are saying this price is too high to even make a profit on milling raw lumber.

Following Porter's Five Forces, the milling industry has become less attractive because supplier power has increased, substitutes have increased, and industry rivalry has increased. Suppliers to the mill industry are raw lumber producers; with demand so high, they have more power to expect high prices and be more selective who they sell to. For lumber producers, it is cheaper to ship lumber to China than it is to truck it up to Washington for milling. With China able to pay more for lumber and with costs lower to ship to China, it is no wonder the US milling industry is struggling.

Additionally, sawmill operators now compete with paper mills and wood chip vendors. This increased rivalry is due to the fact that the US housing market collapsed and lumber is in lower demand.

This analysis shows that it is not a good idea to enter the lumber mill industry. As long as China keeps demanding raw lumber, prices will be pushed ever higher for mills. It is hard to dramatically increase the supply of logs because there is limited land space and it takes a long time to grow trees. Companies in the mill industry will have to find a way to either increase their prices and pass rising costs on to consumers or enter other profit pools.

http://online.wsj.com/article/SB10001424053111904583204576544973477913748.html

Yes, Google Really Should Worry About Facebook

Remembering back to when only college students could join Facebook, I realize how much their strategy has changed over the years. Initially Facebook was a niche company who aimed to gain popularity through prestige and limiting the number of users allowed. Currently, Facebook is undergoing another strategy change and expanding their market segment of "social networking" to "connecting people to each other, things, ideas, and media." Facebook is now encroaching on Google's market by being a quasi search engine.

Looking at Porter's Five Forces, Facebook is in an extremely attractive industry. There is hardly any rivalry within the industry (as Facebook dominates 10% of all nationwide Internet activity), there are fewer and fewer substitute products, and there is limited to no buyer/supplier power. Facebook has been so innovative and cutting edge that no other company has been able to sneak into their market.

Facebook's once niche strategy has morphed into a broad differentiation strategy. After their F8 announcement, Facebook is planning on using all the data collected from users to predict what we will like and engage in. From target advertisements to grocery ingredients we prefer, Facebook will soon have a hand in just about everyone on the Internet.

UPS vs. USPS: Mail Delivery Just Got More Interesting

Porter's Five Forces Model can be used to analyze the article "UPS vs. USPS". This article mainly focuses on the United States Postal Service's initiative to cut $3 billion in costs but also discusses the rivalry within the mail delivery industry.

Using Porter's Five Forces, the mail delivery industry is a decently attractive industry. The threat of new entrants is low, as is supplier power low. On the other hand, industry rivalry and buyer power is very high. Consumers who need to mail a package do not differentiate between UPS, USPS, FedEx, DHL other than on price. There are not many differentiating services or products that make one company more attractive than the other. For this reason, buyer power is high and makes the mail delivery industry less attractive. Finally, there are some substitutes for mail delivery. With email, the Internet, and cell phones so prevalent in today's society, mailing a "snail mail" letter is less attractive. When I was younger, I remember receiving letters regularly. Birthday invitations, greetings cards, and bills all depended on the mail delivery industry. Now, I rarely receive any of those in the mail. More often than not I receive e-cards, e-invitations, or online billing statements. With all of these substitutes for physical mail delivery, it is no wonder the USPS has mail volumes down 50%.

If the United States Postal Service doesn't act quickly, they will go out of business and become defunct in today's technological society. Fortunately for them, they are revising their strategy and aiming to cut costs. Cutting costs comes at the trade-off of decreasing delivery time and customer convenience. USPS stores will be farther away from people's homes and mail will average 2-3 day delivery instead of 1-2 day.

Also within the industry, UPS is changing it's strategy and looking for other profit pools within the industry. They are branching out to include additional services. For customers who are willing to pay a monthly fee of $40, UPS will guarantee delivery within a 2 hour time frame to any location specified as opposed to a 4 hour standard delivery time frame.

http://www.dailyfinance.com/2011/09/16/ups-vs-usps-mail-delivery-just-got-more-interesting/