Swot Analysis Of Dell Corporation Essay

SWOT Analysis

Dell Computer Corporation was founded by Michael Saul Dell in 1984 with their simple premiss as the basic foundation that personal computing machines could be built and sold straight to clients and by making this, Dell could turn to their specific demands and supply the best computer science solutions that meet those clients demands. ( Cuizon G. , 5 March 2009 )

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Basically, Dell is utilizing Direct Method which provides two advantages: 1. cut downing selling and gross revenues cost by extinguishing markups of distributers and retail merchants and 2. edifice to order decreased stock list costs and hazards of retaining stock lists. ( Cuizon G. , 5 March 2009 )

Dell ‘s Direct Model is the chief ground why Dell has achieved its high position in concern today. This tactical theoretical account enables Dell to interact with clients straight supplying them with fast, reasonably-priced and friendly agencies of production and distribution. ( Cuizon G. , 5 March 2009 )


Dell is one of the largest technological corporations ( Personal computer shaper ) in the universe that develops, industry, sell and back up personal computing machine, laptops and other computing machine peripherals. ( Mba tutorials, 22 December 2009 ) Dell is ranked at figure 38 on the Fortune 500 in 2010. Fortune besides ranks it as the Number 5 most admired company in computing machine industry. Dell has big acquisitions and amalgamations. For illustration acquisition of Perot Systems in 2009 and Alienware in 2006. ( Mbalectures, 20 October 2010 ) Besides that, The Dell trade name is one of the best known and renowned computing machine trade names in the World. ( Marketing Teacher, 2010 ) Dell has experienced direction and leading. For illustration Michael Dell who is soon the computing machine industry ‘s longest-tenured ( CEO ) head executive officer. Dell is besides a extremely imaginative company in its industry and has really strong E-commerce and supply concatenation direction. Dell is the biggest house in the Austin and 2nd biggest non-oil corporation in Texas and fifth largest in Texas by gross. ( Mbalectures, 20 October 2010 )

As we know, Dell is utilizing Direct Model which contributed the success to Dell by enabling the company to offer direct relationships with clients such as corporate and institutional clients. Their strategic method besides provides other signifiers of merchandises and services such as cyberspace and telephone buying, customized computing machine systems ; phone and online proficient support and next-day, on-site merchandise service. ( Cuizon G. , 5 March 2009 ) Now, in a market that is of all time altering, rivals are disputing Dell with new and alone merchandises in an attempt to get the better of the high quality of the Direct Model. ( Docstoc, 2010 ) This extended pick of merchandises and services is perfectly one of Dell ‘s strengths to vie with its rivals. ( Cuizon G. , 5 March 2009 ) The growing and development of laptop computing machines is a primary country in which Dell can work for continued success, despite the menaces posed by its rivals. ( Docstoc, 2010 )

Clearly, many of the Dell ‘s strengths come as consequences of the Direct Model. The theoretical account itself could be considered one of the company ‘s greatest assets. However, a few specific advantages are gained from through the Direct Model relation to the laptop market. ( Docstoc, 2010 )

First of wholly, the Direct Model allows the consumers to to the full custom-make their laptops. The market is going more educated, now more than of all time persons want a merchandise that can aim their specific demands. In the instance of laptops, this means that clients want more picks in footings of both public presentation and profitableness. ( Docstoc, 2010 ) By understanding clients ‘ demands and penchants is of import strength of the company, Dell has cut out the retail marketer and sells straight to the clients with no usage of a in-between adult male.

Dell has made it possible for all clients to hold the opportunity to to the full custom-make their merchandise. ( Docstoc, 2010 ) In term of gaining control informations on its loyal consumers, Dell is utilizing information engineering and Customer Relationship Management ( CRM ) approaches. Thus, a client could choose a generic Personal computer theoretical account, and so adds points and ascents until the Personal computer is kitted out to the client ‘s ain specification. Components are made by providers, ne’er by Dell. ( Oppapers, 2010 )

In add-on to this customization, the Direct Model benefits the clients with fast bringing of merchandises. This allows clients to put their order, and receive their customized computing machine frequently within yearss. Both these advantages are the greatest assets in aiming the home-user market section. ( Docstoc, 2010 )

Besides the fast bringing, Dell besides offer their clients the ability to track their bringing. ( Choice Assurance Solutions, ND ) Customers can maintain path of their bringing by reaching client services which is based in India. The finished goods are so dropped off with the client by messenger. Dell has entire bid of its supply concatenation. ( Oppapers, 2010 )

Dell besides has an advantage in their stock list turnover clip, and in their well established relationship with their providers. ( Docstoc, 2010 ) These just-in-time ( JIT ) bring forthing attack creates immense cost nest eggs by minimize the costs, which Dell can go through on to its clients. ( Mbalectures, 20 October 2010 ) As a consequence, Dell produces the merchandises which is customized, low-cost and present to the client ‘s door within yearss. ( Docstoc, 2010 )

Dell has differentiated itself from rivals by supplying powerful systems to the clients at competitory monetary values. ( Mbalectures, 20 October 2010 ) By low assembly costs by utilizing comparatively inexpensive labor ( Oppapers, 2010 ) , low fabrication costs ( Quality Assurance Solutions, ND ) , and besides boasts the industry ‘s most efficient procurance, fabrication, and distribution system allow Dell to offer the clients powerful systems at competitory monetary values. ( Cuizon G. , 5 March 2009 )

Besides that, Dell has strong client base excessively. Dell is aiming the concern executive class by about two-third of Dell ‘s gross revenues is generated from authorities bureaus, big corporations and educational establishments. ( Mbalectures, 20 October 2010 ) In other words, Dell has already created long-run relationship with big companies, and this provides most of their concern. These companies, in bend, pass the relationship on through their employees, supplying them with Dell merchandises. ( Docstoc, 2010 )


The important failings of Dell is fail to pull the market of college pupil section. ( Docstoc, 2010 ) Dell ‘s gross revenues gross from educational establishments such as colleges merely norm of 5 % in entire. Due to much focal points on concern clients, it affected its ability to organize relationships with educational establishments. ( Cuizon G. , 5 March 2009 ) And, as many pupils purchase their Personal computer ‘s through their school, Dell is clearly non in a place to take advantage of the college market. ( Docstoc, 2010 )

Covering with immense sum of supplies of merchandises and constituents from many different states can do Dell some embarrassment when merchandises are recalled. ( Oppapers, 2010 ) For illustration, great problems in quality, fabrication and services. ( Mbalectures, 20 October 2010 ) Dell. In 2004 Dell had to remember 4.4 million laptop arrangers because of a fright that they could overheat, doing electric dazes or fires. ( Oppapers, 2010 )

Another failing of Dell is there is no variegation and the company is merely concentrating on the PCs concern. ( Mbalectures, 20 October 2010 ) Dell is a computing machine shaper, non a computing machine maker. ( Oppapers, 2010 ) In other words, they build computing machines, non develop them. ( Choice Assurance Solutions, ND ) Dell buys from a group of concentrated high-tech constituent manufacturers. Whilst this is a great advantage in footings of concern procedures, leting Dell to concentrate on selling and logistics, the company is reliant on a figure of big providers, and to an extent is locked in for periods of clip. For illustration, due to the deficiency of big providers in the World, Dell unable to exchange supply. ( Oppapers, 2010 )

In term of place users, Dell have the serious job on its direct method and customization attack. ( Cuizon G. , 5 March 2009 ) First, clients can non travel to retail merchants, seek a few different merchandises, and walk place with a computing machine all in a individual trip because of Dell does non utilize distribution channels. ( Docstoc, 2010 ) The really differentiates thing if Dell from its rivals, customization besides creates a job in that clients merely ca n’t purchase Dell every bit merely as other trade names. It is because each merchandise is made-to-order harmonizing to their specifications and this might take yearss to complete. ( Cuizon G. , 5 March 2009 ) And due to this, many computing machine purchasers are wary of a merchandise that they can non personally analyze it before buying. In add-on, some of the dying purchasers would hold no patient to wait for their merchandises to present for a figure of yearss. ( Docstoc, 2010 )

Furthermore, Dell besides has failing on its engineering. ( Mbalectures, 20 October 2010 ) It have no proprietary engineering to offer the market, Dell is presently utilizing the engineering which are shared by the other major rivals. ( Mba tutorials, 22 December 2009 ) Besides that, it changes its engineering at really fast rate. ( Mbalectures, 20 October 2010 )


Personal computing machines are going a necessity today. Demand for laptops is besides turning much faster than desktop computing machines. As a affair of fact, demand for laptop has overtaken the demand for desktops. This is make a great chance for Dell to turn in all other sections. ( Cuizon G. , 5 March 2009 )

Besides that, the tendency toward more educated purchasers besides provide great chance for Dell by increasing the figure of second-time purchasers. ( Docstoc, 2010 ) Second-time purchasers would most likely help of Dell ‘s made-to-order computing machines because as they have purchased computing machines in the yesteryear know what they want, so do their demand to experiment or utilize some extra computing machine characteristics. ( Cuizon G. , 5 March 2009 ) Here, Dell makes usage of the Direct Model which can supply the model for clients to do genuinely individualized computing machines in a comparatively hassle-free environment. ( Docstoc, 2010 )

Furthermore, betterment in engineering will assist Dell to present efficient-manufacturing systems which will diminish the production cost. ( Mbalectures, 20 October 2010 ) For illustration, increased communicating and technological integrating, such as Internet create good chance for Dell because all the clients can now travel to see Dell ‘s web site to put their order or to acquire information. Since Dell does non hold retail shops, the online shops would certainly do up for its absence. It is non merely benefits to Dell, but all the clients. It gives the clients convenience to shop online than to really drive and make purchase at a physical shop. ( Cuizon G. , 5 March 2009 )

Another chance for Dell would be keep the first-class lead that was taken by the laminitis of Dell, Michael Dell will be disputing. ( Choice Assurance Solutions, ND ) Kevin Rollins replaced Michael Dell in 2004 as Dell ‘s Chief Executive Officer. Dell remained the company ‘s Chairman. Despite laminitis Dell ‘s monolithic success, new blood and a alteration in direction thought could take the company into a new and more profitable clip. Dell was born in 1965, and founded Dell in 1984 with $ 1000 whilst analyzing at the University of Texas. He became the youngest Fortune 500 CEO in 1992, and will be a tough act to follow. ( Marketing Teacher, 2010 )

Diversification in related and unrelated concern, such as packages, broadband, security devices, and Personal computer package are some of the rapid turning sections in Dell company. ( Mbalectures, 20 October 2010 ) Besides, invention makes Dell to present many new merchandises to its scope which includes pressmans, toners, LCD telecastings and other non-computing goods in order to react to the rapid changing industry. Therefore, Dell is viing against iPod and other consumer electronics trade names. ( Marketing Teacher, 2010 )

Furthermore, prolonging low-priced leading is besides an of import chance for Dell. ( Mbalectures, 20 October 2010 ) Dell is branding and selling low-priced, low-price computing machines to PC retail merchants throughout the universe in order to open other avenues of branding chances. ( Choice Assurance Solutions, ND ) The Personal computer ‘s are unbranded and should non be recognised as being Dell when the consumer makes a purchase. Rebranding and rebadging for retail merchants, although a going for Dell, gives the company new market sections to assail with the associated selling costs. ( Marketing Teacher, 2010 ) Therefore, Dell has chance to sell computing machine straight to retail merchants. ( Mba tutorials, 22 December 2009 )


The individual biggest job of Dell is the competitory competition that exists in the Personal computer market globally. ( Marketing Teacher, 2010 ) Dell is confronting strong competition in the industry, such as IBM and Intel to prolong its market portion. ( Mbalectures, 20 October 2010 ) As with all profitable trade names, revenge from rivals and new entrants to the market pose possible menaces. As we know, Dell beginnings from Far Eastern states because of the low labour costs, but there is nil halting rivals to follow what Dell is making, such as sourcing the same or similar constituents from the same or similar providers. Remember, Dell is a Personal computer shaper, non a Personal computer maker. ( Marketing Teacher, 2010 )

In a volatile market such as personal computing machines, menaces abound. Computers change in a changeless erstwhile day-to-day footing. New package, new hardware and computing machine accoutrements are introduced at a lightning velocity. Therefore, the invention is indispensable for Dell by ever looking out for new things or presenting new computing machine systems to the market. The menace to go antique is a pulsating world in computing machine industry. Not merely that, companies are besides confronting the challenge to bring forth merchandises that are high in quality but low in monetary value. ( Cuizon G. , 5 March 2009 )

Therefore, one of the biggest external menaces to Dell is the progressively lower monetary values for merchandises amount their rivals ( Quality Assurance Solutions, ND ) and do the monetary value difference among trade names is acquiring smaller. Although Dell ‘s Direct Model attracts clients because it saves cost, other companies are besides able to offer their merchandises at low costs which could endanger Dell ‘s price-conscious turning client base. Since the monetary values of the trade names are indistinguishable, monetary value difference is no longer an issue for a client. Therefore, they would take other trade names instead than waiting for the bringing of Dell ‘s customized computing machines. ( Cuizon G. , 5 March 2009 )

Due to the growing rate of the computing machine industry is decelerating down, Dell which has the biggest portion of the market has besides slows down the demand of its merchandises. If the demand slows down, the competition will go stiffer in the procedure. Dell has to work double difficult to distinguish itself from its replacements, such as Ipad which introduced by Apple Corporation in order to go on keeping a important market portion. ( Cuizon G. , 5 March 2009 )

Technological promotion is a double-edge blade. It provides an chance but at the same clip a menace for Dell because promotion in engineering outmoded the fabrication installations every bit good as the company. ( Mbalectures, 20 October 2010 ) Low-cost leading scheme is no longer an issue to computing machine companies therefore it is of import for computing machine companies to stand out from the remainder of rivals. Therefore, in order to vie with others, Dell has to ever maintain up with its technological promotions. ( Cuizon G. , 5 March 2009 )

Besides that, due to being planetary in its selling and operations, Dell is exposed to fluctuations in the World currency markets. Although it is a really thin organisation, orders do hold to be placed some clip in front due to their company size or value. ( Marketing Teacher, 2010 ) Changes in exchange rates could do the company ‘s planetary concern exposed to possible losingss in certain parts of its supply concatenation. ( Choice Assurance Solutions, ND )


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