IE166-B1 SY 17-18

Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo

08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

Overview
Company brief:
Michael Dell became interested in computers and he started selling PC
components out of his dormitory room during his stay in University of Texas. He
dropped out from college and formed a company named PCs limited that sells PCs and
PC components. In 1987, the company was renamed to Dell Computer. It is one of the
largest technology companies in the world. The company is known for selling custom-
built products.
The company is in the Information Technology industry. The businesses involved
in this industry designs computer hardware and computer networking infrastructures,
develops computer software, manufactures computer components, and provides
information technology (IT) services.
Dell continuously search for ways to reduce costs. They are focused on cost-
efficient build to order manufacturing and they try different methods of assembly and
continuously find ways to do the assembly easier and faster. They outsource some of
the components and they pick a supplier by evaluating each and choosing the best
among them with regards to performance, quality and cost.
Company executives believe in 4 tenets that are the key to delivering superior
customer value. The first one is that direct selling is the most efficient way to market the
companys products. Customized products and services is the most effective way to
address customer needs. Efficiency in the supply chain and manufacturing can lead to a
low-cost structure and the customers will be able to benefit this with lower prices.
IE166-B1 SY 17-18
Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo
08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

Company Highlights:
In 1966 the Dell web site was launched and generated more income than
Yahoo,Google, ebay and Amazon combined. ($1 million in sales per day just six
months after site is live.)
Dell becomes the No. 1 computer systems provider worldwide in 2001.
During 2004-2005, Dell overtook HP to become the global market leader in PCs
2005, Dell had a 33.6 percent share of PC sales in the US.
2004-2007, Dell reigned as the number 1 domestic seller of x86 servers for
windows and linux and number 2 in the world in x86 server shipments.
The Dell DJ (Dells mp3 player), was number 2 behind the apple ipod.
Dell products were sold in more than 170 countries
In 2010 Dell is ranked the No. 1 healthcare information technology services
provider in the world according to Gartner, Inc.
Dells Inspiron Mini 9 notebook was selected as one of Time Magazines Best
Inventions of 2008 and CNETs 10 Most Cutting Edge Products of 2008
Issues:
Shift in server technology and growing cost-consciousness of users.
High cost charges to service or replace certain desktop models that included a
vendor part that failed to perform its specifications.
Decline in market shares due to competitors namely HP and apple.
Slowdown in IT spending in 2001-2007 compared to earlier years.

https://www.strategicmanagementinsight.com/mission-statements/dell-mission-
statement.html

Company Mission
 IE166-B1 SY 17-18
Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo
08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

Our mission is to be the most successful IT systems company in the world by

delivering the best customer experience in all markets we serve. In doing so, Dell will
meet customer expectations of:
highest quality
leading technology
competitive pricing
individual and company accountability
best-in-class service and support
flexible customization capability
superior corporate citizenship
Internal/External Analysis

Porters 5-Forces Model of Competition

IE166-B1 SY 17-18
Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo
08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

SWOT ANALYSIS/TOWS MATRIX

IE166-B1 SY 17-18
Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo
08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

Strategic Implications
After analyzing the SWOT and TOWS matrix of Dell, it is apparent that prioritizes
the individual needs of its clients while also maintaining low costs in an Information
Technology Industry and they should choose a strategy to ensure that these needs are
always met also through their suppliers and they give the clients a unique and
innovative product.

Goals and Long-Term Objectives

Dells goals and long-term objectives include actions in areas of Environment,
Communities and People:
By 2020, the good that will come from Dells technology will be 10x what it takes to
creates and use it.

http://i.dell.com/sites/doccontent/corporate/corp-comm/en/Documents/2020-plan.pdf?
newtab=true
IE166-B1 SY 17-18
Group #1 Czarina Araneta, Ria Aquino, and Dayanara Domingo
08/25/17
Dell Inc. in 2008: Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal
Computers?

Strategy Selection
The strategy selection for dell would be a cost-leadership strategy, and differentiation
strategy by offering customization these strategies was chosen because:
Buyers are becoming more aware of the value of technologies
Rival firms mostly prioritize on developing technologies and offer their products at
higher prices
Clients will think that they will get more value for their money by purchasing dells
products
Dell focuses on the efficiency of its operations
There is a growing demand for personal computers and people can easily have
access by offering it in a lower price.

With the combination of cost-leadership strategy and differentiation,

Clients will perceive that they are getting more value for their money with Dell
and this can attract more customers in the long run.
Recommendations
Because Dell is competing in a fast-changing market, strategy options include:
Invest in development of new technologies of suppliers to produce components.
Focus on making operations as efficiently as possible so that they have
resources needed to adapt new technologies.
Market the products and make them easier to access by also offering them at a
low price despite the excellent value.
Increase number of loyal customers by letting them purchase new products in a
lower price in exchange for their old products
Further improve company relations with other firms and merge knowledge and
capabilities