Dell Strategic Analysis, Research Paper Example

Dell Inc

Dell is an American computer services and hardware selling corporation. The company was established in 1980’s and in the last thirty years the Dell has reached to the worlds one of the top multinational companies operating in 190 countries in 6 continents with 9 manufacturing units.

2.1 – SWOT Analysis

Strength

• Dell Inc is the world’s largest Personal Computer (PC) maker.
• The well known brand across the world.
• First Personal Computer (PC) maker who offer next-day, product service on-site.
• Work on the basis of customer business model by using the latest technology.
• Dell has incredibly low cost of operating comparative to revenue since it reduces the middleman and provide product directly to the customers.
• The Direct Model of enables the Dell to present open relationships with its customers for instance institutional and corporate customers.

Weaknesses

• A large number of components and products from number of suppliers from many countries.
• Dell is the computer maker and not the manufacturer that make it powerless to switch supply.
• Dell has very limited solid retailer/ dealer relationships.
• The people cannot purchase Dell as easily as computer of other brands since every product is built on custom basis according to the customer requirements and this can take many days to finish.

Opportunities

• Dell has strategy of diversification by launching number of new products to its product range.
• PCs are turn out to be an essential thing at present more than ever. Customers are gaining more knowledge concerning to the computers. The buyers of second-time would almost certainly gain custom-built computers of Dell since as their understanding about computers grows, so do their requirements to use or experiment some extra features.
• The internet technology offers Dell with better opportunities because all the customer need to do now is to visit website of Dell to get information or to put their order.
• Because Dell Inc does not own retail stores, the e-stores would of course make up for its nonexistence. It is additionally easier for customers to purchase online than visit the Dell’s physical store.

Threats

• Competition that exists in the Personal Computer (PC) market internationally.
• The entry of new companies to the market cause possible threats.
• The risk of becoming old-fashioned is an important reality in a business of computer.
• The different between prices comparatively from other brands are becoming smaller.

Porter Five Forces Analysis

Rivalry amongst Existing Competitors

The PC industry from the start is inclined in relation to the consolidation, because of which the type of market can exactly be defined as oligopoly. The key players of PC industry consist on Dell, HP, IBM, Toshiba, etc. The market competition is based on the competitive advantage and price.

Threat of New Entrants

Every company from the giants companies like Dell, etc seeks its greatest to outperform and beat rival companies by introducing the advance technology and then charge them a price competitively. This is the possible reason that new companies find it very difficult to enter in the market and the existing rival companies doing their best to maintain the existing market.

Bargaining Power of Buyer

In the industry of Personal Computer (PC) the buyer bargaining power is very high because the brand loyalty is very inadequate in the market since many manufacturers introduced similar products.

Moreover, the cost of switching is very small in the PC industry and the reason is that approximately all systems are containing the Intel processor.

Bargaining Power of Suppliers

The suppliers bargaining power traditionally is very strong in the computer industry. This is because the suppliers are small in amount who supplies the most of the parts of computer.

Substitute products

Usually the availability of substitute does affect the sales and profitability of the computer and its various components to huge extent. Traditionally the threat of substitutes is very high for Dell.   The computer industry has traditionally experienced similar products produced by the different manufacturer with a very little distinction between a computers produced by one manufacture with that of other. The competition between the rivals can be rightly cited as oligopoly because almost all the major producer manufactures identical products.

Quality Management Approach

The Perot System of Dell implements four aspects that work altogether in a manner that is integrated to guarantee the quality of services and products and to clarify success in achieving particular requirements. This system works with following sequence;

• Quality Management System
• Quality Control Plans
• Self-Assessment
• Task-Specific Self-Assessment
• Customer Performance Assessment

Customer Satisfaction Measurements

The Perot Systems of Dell has documented, established, and implemented an ISO of International Organization of Standard 90001:2000-licensed Quality Management System (QMS) that demonstrate on meeting the requirements of customer and making it possible for employees to perform their tasks right in the first time. The Perot Systems of Dell through QMS manuals measures and documents how customer requirements concerning to the quality has been met. Dell performance concerning to the customer satisfaction is also observed and communicated on by the customer, and many other types of opinions and comments are gathered and exercised for reviews of management and the yearly self-assessment.

References

Dell, Michael & Fredman, Catherine. (2010). Direct From Dell. New York: Harper Paperbacks.

“Dell Inks Computer Deal in China” on Time.com (a division of Time Magazine), 2010-09-24, retrieved 2011-11-11