Business Strategic Management

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Module Assignment On Executive Master In Safety, Health & Environment
Prepared by Hasnizam Bin Md Saad
STUDENT’S NAME : HASNIZAM BIN MD SAAD
STUDENT’S NAME : HASNIZAM BIN MD SAAD
I/C NO : 770129-02-5729
PROGRAMME : EXECUTIVE MASTER IN SAFETY , HEALTH &
ENVIRONMENT
CLASS DATE : 23 JULY 2016 & 24 JULY 2016
INTAKE DATE : 2nd BATCH
MODULE : BUSINESS STRATEGIC MANAGEMENT
TRAINER’S NAME : DR. JAZ ASKME
CENTRE : PENANG
OVERALL MARK
(Fill up by Trainer)
QUESTION MARK
1
2
3
4
5
TOTAL
FINAL MARK
(40%)
INDIVIDUAL ASSIGNMENT

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Module Assignment On Executive Master In Safety, Health & Environment
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Introduction
The following report attempts to identify, analyse and interpret the Marketing Strategy of DELL Inc..
The first part will introduce the company and its history while the second part outlines the company's
current marketing strategies showing their corporate mission and vision, their target market, DELL's
business model and philosophy and the actual market trends.
The main part examines DELL's strategic business units using SWOT, Porter's five forces and PEST.
Furthermore an analysis of DELL's business portfolio will be undertaken using the Boston-Consulting-
Group-Matrix. It will be examined which of Porter's Generic Strategies they follow and what kind of
demand DELL faces and how they balance between demand and supply. Also DELL's marketing mix
will be studied and their general sales strategy will be examined.
Finally the report concludes using the findings to provide recommendations and suggestions for
potential solutions and future development.
DELL Inc. – The Company's History in short
DELL Inc. is a computer technology company with their headquarters in Round Rock, Texas, USA.
Today privately owned again, they are a multinational company developing, selling, repairing and
supporting computers and related products and services. DELL sell directly to their customers, small to
large businesses, healthcare and educational institutions, and government agencies through dedicated
sales representatives, telephone-based sales, and online via their company web site.
Founded in 1984 as 'PC's Limited' and renamed then after its then 22-year old founder, Michael Dell,
the company today counts as one of the world's largest technological corporations employing more than
103,300 staff worldwide (Statista Inc., 2014)
After opening their first subsidiary in 1987 in UK the company went public in 1988. 1990 DELL were
the first in selling through retail stores like CompUSA, Best Buy and WalMart but quickly withdrew
again after they determined the model did not meet their financial objectives. In 1992 27-year old
Michael Dell was the youngest CEO of a company ranked in Fortune magazine's list of the top 500
corporations. In 1994 the launch of the Latitude XP with a record-breaking battery life brought breath-
taking success. The same year they launched operations in Asia-Pacific. 1996 their announcement that
their daily internet sales reached $1m revolutionized the market. By 1998 daily internet sales topped
$12m and in 1999 DELL opened an integrated sales, manufacturing and support centre in China. By the
year 2000 within 15 years in business Michael Dell became the 9th
richest man in the world. In 2003
Michael Dell steps back as CEO to return in 2007 to face the company's crisis. To regain the company's
flexibility Michael Dell completed in 2013 the largest corporate privatization in history. Together
with 'Silver Lake Partners' and 'Microsoft' he bought his own company back for 25bn.
Being listed number 51 (Fortune.com,2014) in the Fortune 500 list until 2014, they are not listed
anymore due to the confidential nature of its financial information after going private in 2013 (DELL-
Financial News, 2013) which Michael Dell called 'the world's biggest startup' (Spring, 2013).

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Module Assignment On Executive Master In Safety, Health & Environment
Prepared by Hasnizam Bin Md Saad
In 2014 DELL was, after Lenovo and HP, the world's third largest PC vendor (Pettey,2015). Currently
DELL is the number 1 seller of PC monitors in the world (Song&Shirer,2013).
DELL maintains five production facilities worldwide, two in the USA, located in Texas and Tennessee,
one in Brazil and two in Malaysia and China, the factory in Limerick, Ireland was closed 2010 and they
manufacture most of the products they sell. About two-thirds of their revenue is generated in the
Americas, 22% originating in Europe, the Middle East, and Africa and about 11% coming from the
Asia-Pacific region.
Current Marketing Strategies
Until 2013 'The Soul of DELL' (DELL UK, 2015a)(DELL ZA, 2015b) defined their mission to be the
most successful computer company in the world at delivering the best customer experience in markets
we serve"
and their vision [...] to create a better world for all [...] an image of the future we seek to create, the
way we interpret the world around us – our customer needs, the future of technology, and the global
business climate.
Target market
DELL's success builds on direct sales and their build-to-order strategy for producing and selling PCs.
Originally targeting individual PC-users they, by the end of the 1980's, evolved targeting the corporate
market. Developing their own sales force and starting dealing with CIOs and other top executives
directly, they penetrated corporate accounts that long were dominated by established IT-vendors such as
HP, IBM or Compaq (2002 acquired by HP).

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Module Assignment On Executive Master In Safety, Health & Environment
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BACKGROUND OF DELL
The company selected is Dell and it deals with the manufacturing of computers and its components, and
it comes under the computer manufacturing industry. Computer manufacturing companies are mostly
considered as electronic manufacturing companies and these companies produces products like
computers, its peripherals, equipment’s related to communications, and many more products similar to
these products. These products can be used at many places like offices, schools, industries, colleges, as
well as homes. These products are also used for military as well as government establishments. In
addition to all this different computer peripherals or different components are built in into many industry
products.
Dell has been a well-known manufacturer of Computers, mainly Desktops, Laptops, Notebooks, and
PDA. Dell has emerged as one of the largest manufacturers of computers. Dell competes with the
industry leaders and with the best in the industry. Dell grew as a computer manufacturing company in
the year 1980's and 1990's, and it also became the largest computer manufacturer at one point of time.
Dell's core business was to sell Desktops, Laptops and Servers, etc. Dell also sells some other
electronics products, which it acquires from its suppliers around the world and sell them under the brand
name of Dell. The operations of Dell have increased significantly over the last few years and have been
competing with the best in the business.

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Module Assignment On Executive Master In Safety, Health & Environment
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CURRENT SITUATION ANALYSIS
Dell is one of the worlds best and most known brands. So is it all a rosy picture for dell. This SWOT
analysis of Dell points out chinks in Armour of dell’s fortress.
Strengths:
 World’s largest PC maker.
 One of the best known brands in the world.
 First PC maker to offer next-day, on-site product service.
 Direct to customer business model. Uses latest technology.
 Dell has remarkably low operating cost relative to revenue because it cuts out the retailer and supplies
directly to the customers.
 Dell’s Direct Model approach enables the company to offer direct relationships with customers such as
corporate and institutional customers.
 Dell’s direct customer allows it to provide top-notch customer service before and after the sale.
 Each Dell system is built to order to meet each customer’s specifications. Reliability, Service and
Support.
 Dell boasts a very efficient procurement, manufacturing and distribution process allowing it to offer
customers powerful systems at competitive prices.
 Dell is able to introduce the latest relevant technology compared to companies using the indirect
distribution channels.
 Dell is not a manufacturer; Components are made by the suppliers and Dell assembles the computers
using relatively cheap labor. The finished goods are then dropped off with the customer by courier. Dell
has total command of the supply chain.
 Dell turns over inventory for an average of every six days, keeping inventory costs low.
 Dell is enhancing and broadening the fundamental competitive advantages of the direct model by
increasingly applying the efficiencies of the Internet to its entire business.

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Module Assignment On Executive Master In Safety, Health & Environment
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Weakness:
 A huge range of products and components from many suppliers from various countries.
 Computer maker and not the computer manufacturer, making DELL unable to switch supply.
 Dell lacked solid dealer / retailer relationships.
 No propriety technology
 Not attracting the college student segment of the market. Dell’s sales revenue from educational
institutions such as colleges only accounts for a merely 5% of the total.
 Dell’s focus on the corporate and government institutional customers somehow affected its ability to
form relationships with educational institutions.
 For home users, Dell’s direct method and customization approach posed problems. For one, customers
cannot go to retailers because Dell does not use distribution channels.
 Customers just can’t 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:
 Diversification strategy by introducing many new products to its range.
 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 Dell’s custom-built
computers because as their knowledge grows, so do their need to experiment or use some additional
computer features.
 The internet also provides Dell with greater opportunities since all they have to do now is to visit Dell’s
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:
 Competitive rivalry that exists in the PC market globally.
 New entrants to the market pose potential threats.
 The threat to become outmoded is a pulsating reality in a computer business.
 Price difference among brands is getting smaller.
 Dell’s Direct Model attracts customers because it saves cost. Since other companies are able to offer
computers at low costs, this could threaten Dell’s price-conscious growing customer.
 With almost identical prices, price difference is no longer an issue for a customer. They might choose
other brands instead of waiting for Dell’s customized computers.

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Module Assignment On Executive Master In Safety, Health & Environment
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 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.
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
Dell to stand out from the rest.
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Customers
Dell serves a wide range of customers ranging from individuals, small business to large multinational
companies. Dell also supplies computers and other devices to the government organizations in various
countries. Its customers are spread all across the world, making it a truly global company. The global
customers of Dell also point out the presence of Dell, which all across the world. So, it is satisfying a
large base of customers and thus there is lot of scope for increasing the customer base of Dell
Costs
The costs of any company play a key role in the profitability and success of any company. Higher costs
lead to low income or losses in some cases, so it is always better to reduce the cost of manufacturing and
also the other indirect costs. Dell manufactures most of the products on its own and it also acquires
some of the products from suppliers around the world, with a view to reduce costs. This helps it in
pricing its products competitively, thereby helping it to stay competitive in the market.

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Module Assignment On Executive Master In Safety, Health & Environment
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Competitors
Some of the competitors of Dell are well known companies around the world. The competitors of Dell
include Microsoft, IBM, Apple Inc, HCL, HP, Sony, LG, Samsung, etc. These competitors are well
known companies with a wide range of products and a wide base of customers, which also helps them to
mark their presence all over the world. The competition is very stiff in the computer manufacturing
industry, with the presence of these popular global brands.
STRATEGY FOR DELL
The strategy for Dell would be to adopt an innovative manufacturing process thereby helping it to stay
competitive by bringing in a change and by manufacturing technologically advanced products.
Change Required
Dell needs to bring about a major change in the size of its desktops and laptops. Dell can manufacture
sleek laptops like Apple, Inc, and thus would be able to compete with Apple Inc. It would also give Dell
an advantage over its competitors. Moreover, it gives Dell an opportunity to increase its market share by
serving a new base of customers with its sleek products. This can be achieved only by adopting a
technology like Apple Inc, or even a better technology than Apple Inc.
Impact on Management
This change is likely to impact the management at Dell. The impact of the technological change would
require dell to bring about a change in the way the management at Dell operates. There may be a need to
include a new of level of management or to remove an existing level of management positions based on
the requirements. With a change in the organization with regards to the structure or the technological
changes, the management also needs to change, as per the requirements. So, it can be said that the
change in the products to be manufactured, is likely to bring about a change in management. Thus, it can
be said that there is an impact of this change on the management.

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Module Assignment On Executive Master In Safety, Health & Environment
Prepared by Hasnizam Bin Md Saad
Impact on Business Location
Dell might need to start its manufacturing units to manufacture sleek products, or else it can use the
existing manufacturing facilities to manufacture such products. With a change in the computer
manufacturing technology, Dell has to expand its operations by starting manufacturing units in new
business locations. Dell might need to change it business from location to another considering its impact
on the operations. Most of the manufacturing companies are starting their manufacturing units in
countries like India and China, so Dell might consider India and China, as a proposed location to start its
manufacturing units to manufacture sleek laptops, and small sized desktops.
Impact on Information needs of management.
The management needs an upgraded information system, so as to provide an accurate and updated
information at all levels, as and when required, (Malhotra, 2008). The information needs of the
management at Dell are also likely to change, with a change in the technology and operations of Dell.
So, depending upon the information needs, the information system should also be upgraded, so that it
provides required information to the management at all levels, which could ultimately help in
achievement of the objectives of Dell.

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Module Assignment On Executive Master In Safety, Health & Environment
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Impact on Staffing Plan
As discussed earlier, Dell might need to hire additional people to manage its new processes of
manufacturing sleek laptops. The staffing plan is also likely to change with a proposed change in the
technology. Some employees might need to be transferred from one position to another, and some others
might be needed to be hired, depending upon requirement. The proposed technological change at Dell is
also likely to impact the staffing plan at Dell; therefore, a new staffing plan has to be developed,
considering its operations.
Impact on Training
Dell also needs to provide adequate training and education to its employees with a view to upgrade their
skills and improve the productivity and efficiency. The training and development of employee should be
given highest priority, as the highly developed employees enhance the productivity and performance of
the organization as a whole. With a technological change, there will impact on the training provided at
Dell. There are likely to be new training programs, to suit the needs of the new business development
i.e. incorporating the proposed technological change.

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Module Assignment On Executive Master In Safety, Health & Environment
Prepared by Hasnizam Bin Md Saad
Strategies for Sustained Competitive Advantage
Strategies and measures that Dell undertook to address its loss of market share were many. For example,
it reduced reliance on direct sales by selling through retail channels and launched laptops and netbooks.
Bartlett and Beamish (2011) describe three types of strategic approaches that an MNE can use to
respond to challenges, defend worldwide dominance, challenge the global leader, and protect domestic
niches.
In the competitive PC market, Dell was forced to develop new capabilities such as selling through retail
channels and playing catch-up to its competitors’ new products. However, doing so eroded its core
competencies. Instead, Dell should defend and reinforce their existing capabilities rather than
developing new ones.
Dell can do so by taking extra steps to improve its customer service. For example, it introduced a
concierge service for customers in April 2013 that provided personalized and remote services for
customers. Instead of seeking ways to improve sales through retail channels, Dell could enhance its
direct sales model by using social media.
Dell is renowned for its direct sales model that provides lots of customizability. Taking advantage of
this strength, it can delve deeper into this niche by providing customers with more customizable options
online. For example, Dell acquisition of Alienware in 2006 allowed it to tap into the highly profitable
but niche PC-gaming market. PC Gaming Alliance reported that the PC gaming industry hit record
revenues of $6.8 billion in 2012.
Dell can strive to protect its domestic niches and defend against its competitors’ global advantage. By
responding to local needs, Dell can reshape its personal computers to suit the consumers’ taste.
To offset competitors’ advantage, Dell can employ defensive strategies such as lobbying for changes
and assistance. In 2007, Dell lobbied for the Indian government to reduce its PC tax. Finally, it can also
go into mergers or joint ventures with other global MNEs. For example, it entered into a partnership
with one of its competitors, EMC, that led to sales of more than a billion dollars’ worth of midrange and
entry-level storage products.

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Module Assignment On Executive Master In Safety, Health & Environment
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SWOT
Comparative Performance of Competitors
STRENGHTS
 Biggest PC maker in the world.
 They deal directly with the
customers with no use of a middle
man.
 They design the computer to the
customer's specifications.
 Their assembly is done at a fairly
inexpensive cost.
 They offer their customers the
ability to track their delivery.
 They are the number one PC
provider for medium and small
businesses across the US for 10
straight years.
 They ship around one hundred and
forty thousand computers in a day.
 They have very good branding and
are one of the most known
computers in the world.
WEAKNESS
 Dealing with a large amount of
supplies from many different
countries can cause a large issue
when products are recalled.
 They build computers, not develop
them.
 Their supply orders are so large that
they become limited to dealing with
a small few supplies that can handle
the volume.
 They have weak business
relationships with many computer
retailers.
 They do not have unique
technologies to offer the market.
OPPORTUNITIES
 Maintaining the excellent lead that
was taken by the founder, Michael
Dell will be challenging.
 The introduction of new and
enticing products to the customers.
 Branding their lower cost, lower
priced computers that are sold
anonymously throughout the world
to open other avenues of branding
opportunities.
 Maintaining and expanding the one
stop shopping abilities that are
offered to their customers.
 Continuing to market on the internet
to gain larger market bases.
 Broadening their scopes in Europe,
India and China.
 Expand into government and
education markets.
THREATS
 Increasingly popular brand names in
the competition.
 Strong relationships that are held
between competition and the
retailers.
 Competition can basically create the
same computers since Dell builds
computers, not designs them.
 Fluctuations in the currency markets
can make global business operations
more open to losses in certain areas
of the supply chain.
 Tariff trade barriers affecting their
positions in multiple countries.
 Increasingly lower prices for
products amount their competitors.

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Module Assignment On Executive Master In Safety, Health & Environment
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The comparative performance of some of the major computer manufacturing industry leaders gives us
an insight into the level of competition that exists among the top competitors and also the position of
Dell in the overall computer manufacturing industry.
The revenues of Dell for the year 2015 were $2.419 Billion and its operating income was $3.190
Billion, whereas its Net Income was $2.478 billion. The Net income, Operating Income and also the
revenues have all shown an increase as compared to the year 2008, which shows that there has been an
improvement in the performance of Dell over the last one year or so.
The revenues of HP for the year 2009 were $95.757 Billion and its operating income was $17.012
Billion, whereas its Net Income was $13.425 billion. The Net income, Operating Income have increased
and the revenues have shown a decrease as compared to the year 2008, which shows that there has been
an improvement in the performance of Dell over the last one year or so with respect to the profitability,
but it has lost some part of its market share, as compared to its performance during the year 2008.
The revenues of Apple Inc for the year 2009 were $42.91 Billion and its operating income was $11.74
Billion, whereas its Net Income was $8.24 billion. The Net income, Operating Income and also the
revenues have all shown an increase as compared to the year 2008, which shows that there has been an
improvement in the performance of Apple Inc, over the last one year or so.

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Module Assignment On Executive Master In Safety, Health & Environment
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Conclusion
DELL quickly became incredible successful in its early years growing within short time from a start-up
into one of the market leaders. Their business model and philosophy, and their sophisticated supply-
chain-management-system enabled them for a long time to sustain their competitive advantage by
providing low price products while still delivering high quality. This brand image is still alive although
the company had hard years in the mid 2000's. Competition is getting stronger and profit margins
smaller. While Apple grew quickly with their high-prized iPods, iPhones and iPads and the related
services, DELL missed the point to jump on that train and still relied on desktop, laptop and server
business.
Considering the decline of the PC industry they finally made the right choice to expand their product
palette with exactly these devices while still expanding on corporate business. The decision to take the
company private again at a perfect time, shares were incredibly low, brought them the necessary
flexibility to operate without the restrictions of a public company.
For many years the strategy of not providing 'all things to all people', their strong market segmentation
and specialization, brought the lasting success. Based on market research they were able to formulate
their action plan which ultimately became DELL's brand repositioning and the 'Power to do
more' campaign.
Finally the decision to generally stick to their direct model, but with modifications of pre-built
configurations but to enter the emerging markets China and India with thousands of own retail stores
was the right choice.
Since the share price cannot be a metric for success anymore DELL monitoring the global sales trends
and their share of this became as essential as the obligation of constantly assessing the 'voice of the
customer'. For corporate customers this may be easy through dedicated sales and service representatives
but for PC consumers they closely need to monitor product and customer service reviews on dedicated
portals and on their own web clients.

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Module Assignment On Executive Master In Safety, Health & Environment
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