full version Dell Swot Essay

Dell Swot

Category: Business

Autor: jessica85 01 March 2010

Words: 1638 | Pages: 7

Dell INC

Executive summary

Is the dell’s direct model working? Last year, the company gave up the PC market share lead to Hewlett-Packard. Dell was the only top computer company to lose worldwide PC market share. This analysis identified Dell’s problems and provided strategic moves for the PC maker firm.

Company Background

The company was founded in 1984 by Michael Dell, now the company is one of the world’s largest suppliers of personal computers and related products. It designs, develops, manufactures, markets, and services personal computers, servers, printers and other products. The company primarily operates in the Americas. It is headquartered in Round Rock, Texas and employs about 66,000 people. Dell’s simple concept focus on selling personal computer systems directly to the customer in that way Dell could best understand their needs, and provide the most effective computing solutions to meet those needs. The company announced plans to begin selling through retail stores.


Vision:
Dell's vision is to be the most successful computer company in the world at
delivering the best customer experience in markets we serve.

Recommendation for the vision statement:
A vision statement focuses on the on how the world would be ideal without mention the organization. In this vision Dell mention its product, I recommend a vision that would say: There will be a personal computer for each individual in the world.

Justification:
Dell aspire that every individual in the world owns a computer. Computers are part of everyday life in the twenty-first century. Computers have changed the way humans work and live. We live in a world where technology is rapidly increasing, and new discoveries are being made every day. Computers have become a common piece of equipment in homes and business all over the world.

Mission

"With the power of direct and Dell's team of talented people, we are able to provide customers with superb value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use".

Recommendation:
Mission statement indicates how the company will achieve its vision; I will stay with Dell’s mission since shows its core competencies and operating philosophies. However, I will change the word going direct. Dell is now selling PCs in one retail store.




Justification:
With the power of customer, and talented staff, and high quality the company, will achieve its vision to see every person in the world possessing a computer. The Purpose of this mission is provide customers with superb value technology; the core of the business is provided high quality, relevant technology, customized systems and the values are superior service and support, easy to buy, easy to use



SWOT Analysis

Internal-strengths and weaknesses


Strengths:
Dell is the second world largest PC market. The company holds a market leader positioning in the PC manufacturing world some of the Strengths are:

Brand name ( best Know and renowned computer brand in the world.
Direct to customers build model
No inventory build up(just in time inventory system)
Internet sales leadership
Latest technology facilities
Strong relationship with suppliers
Customization (greater part of dell systems are built to order)


Weaknesses

The company has a huge of products and components from many suppliers from all around the world. Many of these products in some occasions are not well fabricated. In many cases Dell had to recall computers production, because some components could overheat, causing electric shocks or fires.

High dependency on component suppliers (suppliers mainly determine the final price)

The organization is very dependant of his CEO Michael Dell.

Accounting practices problems

Employee lay off


Lack of R&D

Lack of retailing experience


Macro-environmental

Economy: currency fluctuation in foreign countries and international trades could affect the price of the product.
Technology: the stream of software and hardware innovation
Markets: expansion of the PC market around the world
Customers: changes in buyer behavior, and customer segmentation.
Competition: Firms are constantly seeking to create or copy dell’s model (i.e HP, Toshiba etc)



External-Opportunities and Threats:

Opportunity
Significant opportunity for expansion in all parts of the world, especially in markets outside of the U. S.; in all customer segments; and in all products categories, ranging from home PCs to enterprise products such us network servers and workstations

Threat
PC Companies can math Dell’s sales strategy while offering competitive process, respected customer service and technical support.











DELL SWOT Analysis



Strengths

• Brand name ( best Know and renowned computer brand in the world.

• Direct to customers build model
• No inventory build up(just in time inventory system)

• Internet sales leadership

• Latest technology facilities

• Strong relationship with suppliers

• Customization (greater part of dell systems are built to order)


Weaknesses

• High dependency on component suppliers (suppliers mainly determine the final price)

• The organization is very dependant of his CEO Michael Dell.

• Accounting practices problems

• Employee lay off


• Lack of R&D

• Lack of retailing experience

Opportunity

• Significant opportunity for expansion in all parts of the world, especially in markets outside of the U. S.; in all customer segments; and in all products categories, ranging from home PCs to enterprise products such us network servers and workstations



Threats

• PC Companies can math Dell’s sales strategy while offering competitive process, respected customer service and technical support





Combination
Opportunity was created when the strengths of direct customer model, internet sales leadership and customization practices were combined with expansion of the PC market and changes in customer behavior.

The threat was created by the lack of R&D from dell and constantly competition within the PC market. A clear example of constantly competition comes from HP that has a great R&D department and also become the new leader in the PC industry.




Long- term Objectives


In order to expand the PC business around the world; be the number one in the industry and take back its market share Dell must increase his sales from $14.4 B now to $ 20B by January 2010. This increase would be a crucial goal for the company. If they increase the share price that means that the company is selling more products and its brand it’s gaining more name in the PC industry.

Invest 20% of company revenues in R&D. in order to compete more efficiently in the PC industry Dell need to create new ideas to make its product unique. Companies differentiate from others because they create a unique idea that makes a product different from others.


How the PC can expand its business around the nation, around the globe and move its sales from $14.4B to $20B by January 2010?

Recommendation for Long term strategy:

Concentrated Growth:
• Dell needs to be more creative in emerging markets need s to be global. The company will need to continue to rely less on its home territory and other mature markets and focus more on emerging markets where grow is more solid. With persistence and knowledge of local markets the company will expand abroad a. A clear example is Brazil where the company has a manufacturing facility that allows the company to sell its products all over South America.



• Get Retail-and use more distribution channels. Although Dell is the leader in go direct to customer philosophy. Right now Dell is selling desktops in partnership with Wal-Mart but, the company needs to find other ways to get the consumer. Dell should considerer a relationship with others retail leaders such as Best Buy.

Market Development
• Invest in new designs, modified some products and make them more attractive to the customer. Create a product tailored to specific segment such us youth, college students female buyers, business consumers etc.


• Advertising, the company needs strong image (i.e Dell dude) Dell is a well know brand but they lack of strong advertising campaigns. The company needs a new slogan that could capture the customer’s attention.
Innovation

• Notebooks and desktops are a strong market, but what about new technologies such us powerful smart phones that are considered as mini-computers. (I.e. I-phone/apple) the smart phone technology is a business that Dell must consider for the future. Dell customers will be happy because they will be able to get all of mobile gear from one company.

Joint ventures
• Create strategic partnerships with companies such us Google; dell computers would ship with Google’s search toolbar and dell users would be directed to a Web page Co-branded by the two companies.

Turnaround
• Dell will lay off 10% of its workforce to save cost and help boost the company’s profit margins.


Justification SWOT Analysis and Grand Strategic Selection matrix:

SWOT analysis










Justification SWOT Analysis and Grand Strategic Selection matrix:



Strengths

• Brand name ( best Know and renowned computer brand in the world.

• Direct to customers build model
• No inventory build up(just in time inventory system)

• Internet sales leadership

• Latest technology facilities

• Strong relationship with suppliers

• Customization (greater part of dell systems are built to order)
Weaknesses

• High dependency on component suppliers (suppliers mainly determine the final price)

• The organization is very dependant of his CEO Michael Dell.

• Accounting practices problems

• Employee lay off

• Lack of R&D

• Lack of retailing experience
Opportunity
• Significant opportunity for expansion in all parts of the world, especially in markets outside of the U. S.; in all customer segments; and in all products categories, ranging from home PCs to enterprise products such us network servers and workstations
Threats

• PC Companies can math Dell’s sales strategy while offering competitive process, respected customer service and technical support
















Grand Strategic Selection matrix:















Based on the SWOT Analysis, Dell Would Be on Cell III. The firm faces impressive market opportunity but is constrained by weak internal resources. Dell is open to explore new markets but needs to resolve first its weakness in order to be the leader in the PC industry.


Grand strategies selection matrix:
Based on the grand strategy graph Dell would be in Cell III, the most common approaches are Market development and innovation, with these strategies Dell can broad its operations and introduced those in new segments or new customer groups. They have the necessity to invest more in innovation. More R&D, more and unique products will make the difference against the competition.

























References

Pearce&Robinson, Strategic Management, 10e, 2007 McGraw-Hill


Dell.com.2007 from: http://www.dell.com/content/topics/global.aspx/corp/en/commitment?c=us&l=en&s=corp


By Jeordan Legon “is The Dude Steven Done For;Wednesday, October 16, 2002 Posted: 3:50 PM EDT (1950 GMT) from: http://archives.cnn.com/2002/TECH/internet/10/16/dude.dell/


Chang, Althea “Is All well with Dell?, August 17 2007: 2:20 PM EDT.From: http://money.cnn.com/2007/08/17/markets/spotlight_dell/index.htm

Holzner, Steven, How Dell Does it, McGraw-Hill, 2006