SWOT Analysis Dell

Strengths.
y
Dell is the World's largest PC maker. Profits for the 3 months to July 2005 were in excess of $1 billion US, representing a growth of around 28%. For the last couple of years it has held its position as market leader (it took it from rivals Hewlett-Packard). The Dell brand is one of the best known and renowned computer brands in the World.

Dell cuts out the retailer and supplies directly to the customers. It uses information technology, and Customer Relationship Management (CRM) approaches to capture data on its loyal consumers. So a customer selects a generic PC model, and then adds items and upgrades until the PC is kitted out to the customer's own specification. Components are made by suppliers, never by Dell. PC's are assembled using relatively cheap labour. You can even keep track of your delivery by contacting customer services, based in India. The finished goods are then dropped off with the customer by courier. Dell has total command of the supply chain.

Weaknesses.
y
The company has such a huge range of products and components from many suppliers from a plethora of countries, that there is the occasional product recall that can cause Dell some embarrassment. In 2004 Dell had to recall 4.4 million laptop adapters because of a fear that they could overheat, causing electric shocks or fires.

Dell is a computer maker, not a compute manufacturer. It buys from a group of concentrated hi-tech component manufacturers. Whilst this is a tremendous advantage in terms of business operations, allowing Dell to focus on marketing and logistics, the company is reliant on a few large suppliers, and to an extent is locked in for periods of time (i.e. unable to switch supply dues to the lack of large suppliers in the World).

Opportunities.
y
Kevin Rollins replaced Michael Dell in 2004 as Dell's Chief Executive Officer. Dell remained the company's Chairman. Despite founder Dell's massive success, new blood and a change in management thinking could lead the company into a new, even more profitable period. Dell was born in 1965, and founded Dell in 1984 with $1000 whilst studying at the University of Texas. He became the youngest Fortune 500 CEO in 1992, and will be a tough act to follow.

Dell is pursuing a diversification strategy by introducing many new products to its range. This initially has meant good such as peripherals including printers and toners, but now also included LCD televisions and other non-computing goods. So Dell compete against iPod and other consumer electronics brands.

Dell is making and selling low-cost, low-price computers to PC retailers in the United States. The PC's are unbranded and should not be recognised as being Dell when the consumer makes a purchase. Rebranding and rebadging for retailers, although a departure for Dell, gives the company new market segments to attack with the associated marketing costs.

Threats.
y
The single biggest problem for Dell is the competitive rivalry that exists in the PC market globally. As with all profitable brands, retaliation from competitors and new entrants to the market pose potential threats. Dell sources from Far Eastern nations where labour costs remain low, but there is nothing stopping competitors doing the same even sourcing the same or similar components from the same or similar suppliers. Remember, Dell is a PC maker, not a PC manufacturer.

Dell, being global in its marketing and operations, is exposed to fluctuations in the World currency markets. Although it is a very lean organization, orders do have to be placed some time ahead due to their size or value. Changes in exchange rates could leave the company exposed to potential loses in parts of its supply chain.

Dell's commitment to customer value, to our team, to being direct, to operating responsibly and, ultimately, to winning continues to differentiate us from other companies. The Background section provides critical information and history about Dell's business world......

SWOT Analysis of Dell Computer Strengths

1. Dell's Direct Model approach of enables the company to offer direct relationships with customers such as corporate and institutional customers. Their strategic method also provides other forms of products and services such as internet and telephone purchasing, customized computer systems; phone and online technical support and next-day, on-site product service. This extensive range of products and services is definitely one of Dells strengths. 2. Dell Computer's award-winning customer service, industry-leading growth and consistently strong financial performance differentiate the company from competitors for the following reasons: 3. Price for Performance Dell boasts a very efficient procurement, manufacturing and distribution process allowing it to offer customers powerful systems at competitive prices. 4. Customization - Each Dell system is built to order to meet each customers specifications. 5. Reliability, Service and Support Dells direct customer allows it to provide top-notch customer service before and after the sale. 6. Latest Technology Dell is able to introduce the latest relevant technology compared to companies using the indirect distribution channels. Dell turns over inventory for an average of every six days, keeping inventory costs low. 7. The company's application of the Internet to other parts of the business -including procurement, customer support and relationship management -- is

growing at a rate of 30 percent. The company's Web site received at least 25 million visits at more than 50 country-specific sites.
Weaknesses

1. Dells biggest weakness is attracting the college student segment of the market. Dells sales revenue from educational institutions such as colleges only accounts for a measly 5% of the total. Dells focus on the corporate and government institutional customers somehow affected its ability to form relationships with educational institutions. Since many students purchase their PCs through their schools, Dell is obviously not popular among the college market yet. 2. For home users, Dells direct method and customization approach posed problems. For one, customers cannot go to retailers because Dell does not use distribution channels. Customers just cant buy Dell as simply as other brands because each product is custom-built according to their specifications and this might take days to finish.
Opportunities

1. Personal computers are becoming a necessity now more than ever. Customers are getting more and more educated about computers. Second-time buyers would most likely avail of Dells custom-built computers because as their knowledge grows, so do their need to experiment or use some additional computer features. 3. Demand for laptops is also growing. As a matter of fact, demand for laptop has overtaken the demand for desktops. This is another opportunity for Dell to grow in other segments. 4. The internet also provides Dell with greater opportunities since all they have to do now is to visit Dells website to place their order or to get information. Since Dell does not have retail stores, the online stores would surely make up for its absence. It is also more convenient for customers to shop online than to actually drive and do purchase at a physical store.
Threats

1. In a volatile market such as personal computers, threats abound. Computers change in a constant sometime daily basis. New software, new hardware and computer accessories are introduced at a lightning speed. It is essential for Dell therefore to be always on the lookout for new things or introduce new computer systems. 5. The threat to become outmoded is a pulsating reality in a computer business. Not only that, companies must produce products that are high in quality but low in price. This is one challenge that Dell contends with. 6. One of the biggest external threats to Dell is that price difference among brands is getting smaller. Dells Direct Model attracts customers because it saves cost. Since other companies are able to offer computers at low costs, this could

threaten Dells price-conscious growing customer base. With almost identical prices, price difference is no longer an issue for a customer. They might choose other brands instead of waiting for Dells customized computers. 7. The growth rate of the computer industry is also slowing down. Today, Dell has the biggest share of the market. If the demand slows down, the competition will become stiffer in the process. Dell has to work doubly hard to differentiate itself from its substitutes to be able to continue holding a significant market share. 8. Technological advancement is a double-edge sword. It is an opportunity but at the same time a threat. Low-cost leadership strategy is no longer an issue to computer companies therefore it is important for computer companies to stand out from the rest. 9. Technology dictates that the most up-to-date and fastest products are always the most popular. Dell has to always keep up with technological advancements to be able to compete.

10.

11. 12. 13. 14. 15. 16. 17. 18. SWOT OF DELL 19. Strengths 20. 1.Worlds largest PC maker 2.one of the best known brands 3.cuts out the retailer 4.customers own specification 5.relatively cheap labour 6.keep track of your delivery 21. Weaknesses 22. 1. a huge range of products and components from many suppliers from various countries. 2. computer maker not computer manufacturer making DELL unable to switch supply. 23. Opportunities 24. 1. diversification strategy by introducing many new products to its range. 2. making and selling low-cost, unbranded low-price computers to PC retailers in the United States 25. Threats

26. 1. competitive rivalry that exists in the PC market globally. 2. new entrants to the market pose potential threats. 3. exposed to fluctuations in the World currency markets (Changes in exchange rates) 27. Conclusion: Dells commitment to customer value, to being direct, to operating responsibly and, ultimately, to winning continues to differentiate it from other companies. 28. 29. 30. 31.

SWOT ANALYSIS OF DELL COMPUTERS. STRENGTH. 1. Dell is one of the biggest technological corporation in the world. 2. Dell is scheduled at number 38 on the fortune 500(2010). Fortune also lists it as the number 5 most admired corporation in its industry. 32. Dell has huge acquisition and mergers. For example acquisition of perot systems(2009) and alien ware(2006). 33. The company has experienced management and leadership. For example Michel dell (ceo) is the computer industrys longest-tenured chief executive officer. 34. Dell is the highly innovative company in the industry and has very strong Ecommerce and supply chain management.

35. Dell is the largest firm in the Austin and 2nd biggest non- oil corporation in Texas and 5th largest in Texas by revenue. 36. Direct selling to the customers by understanding customers need and preferences is the important strength of the company. 37. Dell manufacturers product near to its customers and use just in time producing approach to minimize the cost. 38. Dell has strong customer base. Approximately two-third of dells sales is generated from government agencies, large corporations and educational institutes. 39. The company is renowned for its distinctive direct model, industry leading growth, award winning customer service, and consistent strong financial performance. 40. Dell has differentiated itself from its competitors by providing potent system to the clients and customers at competitive price. 41. Dell has the industrys most efficient procurement, manufacturing and distribution system.

WEAKNESSES. 42. Dell is highly dependent upon its suppliers which may cause great trouble in quality, manufacturing and services. 43. Dells centre of sales is the government institution and corporate customers which has affected its ability to form relations with customers. 44. The company does not have proprietary technology. It changes its techniology at very fast rate. 45. Management and leadership rotate around just one person. 46. There is no diversification and the company is only focusing the PCs business. 47.

OPPORTUNITY. 48. Advancement in technology will allow dell to come up with new products and create new market segment. 49. Improvement in technology will also help the company to introduce efficientmanufacturing system which will decrease the overall cost of production. 50. Dell is in the rapid changing industry; innovation is the only way to remain in the industry and be competitive. 51. Customers preferences changes very frequently. They always look for new and updated products. Being a customer oriented is a sign of success in the industry. 52. Diversification in related and unrelated business such as security devices, softwares, broadband and PC softwares are a few of the fastest growing segments. 53. Backward and forward integration may result in lower cost and increase in quality and service. 54. Sustaining low-cost leadership is also an important opportunity for the company. 55.

THREATS. 56. Advancement in technology obsoletes manufacturing facilities as well as product of the company. 57. Dell is facing strong competition to sustain its market share. 58. Industry is witnessing strong price war between pc producers. 59. Dell has strong competitors in the industry such as IBM, Intel etc. 60. Dell has a strong presence in the developing countries, currency changeability in those countries create problem for its business. 61. The company is facing various problem in developing countries such as political instability, tariffs etc.