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Strategy Analysis

  1. 1. SHENYANG AEROSPACE UNIVERSITY“DELL Inc.” Roni Bhowmik Master’s Program Department of Economics & Management SHENYANG AEROSPACE UNIVERSITY 0
  2. 2. SHENYANG AEROSPACE UNIVERSITY TABLE OF CONTENTS Title Page No. Introduction 04 Company Background 05 Company Profile at a Glance 08 Key Milestones 09 Management Hierarchy 11 Mission, Vision, & Objectives 12 Macro Environment (PESTLE) 14 Micro Environment (SWOT) 18 Industry Analysis 21 Strategy & Tactics (Ten Years) 27 Findings of the Report (Risk, Problem) 41 Recommendation of the Report (Solution, Advise) 44 Conclusion 47 References 481Prepared by Roni Bhowmik
  3. 3. SHENYANG AEROSPACE UNIVERSITYIntroduction: ―No other technology company listens to customers, collaborates with partners, adds its own significant layer of innovation and delivers relevant technology more efficiently and effectively than Dell.‖These words from Michael Dell point out more than anything else how the Dell Companymanaged to advance to the worldwide number one in the computer industry. From a littlecompany founded by an undergraduate student at the University of Texas, Dell Inc.,headquartered in Round Rock, Texas, has developed into a huge corporation with more than103,300 employees today and an annual turnover of nearly $61.49 billion.Dell Inc, which was ranked the 25th largest company on the Fortune 500 list by Forbesmagazine, began its cosmic rise in 1984 when Michael Dell used a mere $1000 dollars tofound PC’s Limited. It is the second largest non-oil company in Texas and the largestcompany in the Austin area.Dell traces its origins to 1984, when Michael Dell created PCs Limited while a student at theUniversity of Texas at Austin. The dorm-room headquartered company sold IBM PCcompatible computers built from stock components. Michael Dell started trading in the beliefthat by selling personal computer systems directly to customers, PCs Limited could betterunderstand customers needs and provide the most effective computing solutions to meetthose needs. Michael Dell dropped out of school in order to focus full-time on his fledglingbusiness, after getting about $300,000 in expansion-capital from his family.Long the worlds largest direct-sale computer vendor, Dell Inc. is now also the leading sellerof computer systems in the world, capturing a global market share of more than 15 percent.Dell markets desktop personal computers, notebook computers, network servers,workstations, handheld computers, monitors, printers, high-end storage products, and avariety of computer peripherals and software. The firm also has moved into the consumerelectronics arena, offering LCD televisions, projectors, and other products. Dell manufacturesmost of the products it sells, maintaining six production facilities worldwide, located inAustin, Texas; Nashville, Tennessee; Eldorado do Sul, Brazil; Limerick, Ireland; Penang,2Prepared by Roni Bhowmik
  4. 4. SHENYANG AEROSPACE UNIVERSITYMalaysia; and Xiamen, China. About two-thirds of revenues are generated in the Americas,with 22 percent originating in Europe, the Middle East, and Africa and with the Asia-Pacificregion accounting for the remaining 11 percent. Dell sells its equipment directly to consumers,small to large businesses, government agencies, and healthcare and educational institutionsthrough dedicated sales representatives, telephone-based sales, and online via the companyweb site. Founder Michael Dell holds 12 percent of the company and will remain chairman ofthe company after stepping down as CEO in July 2004.Company Background:Dell Computer Corporation is not the largest personalcomputer company but it is the fastest growing. Dell’s focusis being ―first to volume, not first to market.‖ Dell traces itsorigins to 1984, when Michael Dell created PCsLimited while a student at the University of Texas at Austin.The dorm-room headquartered company sold IBM PC compatible computers built from stockcomponents. Michael Dell started trading in the belief that by selling personal computersystems directly to customers, PCs Limited could better understand customers needs andprovide the most effective computing solutions to meet those needs.The company vision was to produce computers that could easily be fitted with individualcomponents to build a computer system to accommodate individual requirements. The goalwas to give the customer exactly what they needed or wanted. The computers were built fromstock parts as they were ordered. In 1985, the founder dropped out of school, got a familyloan for $300,000 dollars and began to give his full attention to the new company.Later the same year the company introduced its first company designed computer, the TurboPC. The computer boasted an Intel 8088 processor that ran at an impressive speed of 8MHz.And it sold in the United States for $795 dollars. The computer systems, which wereadvertised in computer magazines nationally, were purchased through direct sales. Given alist of options, the customers choose the components they wanted and the computers werebuilt as they were ordered. By ordering the components wholesale, the company was able toprovide great pricing, which proved to be much lower than their competitors’. The3Prepared by Roni Bhowmik
  5. 5. SHENYANG AEROSPACE UNIVERSITYcompany’s business formula proved to be a great success and the first year of trading theygrossed more than $73 million dollars.Ireland welcomed the new company in 1987, and became the first of many internationaloperations. 1988 ushered in the new company name, Dell Computer Corporation and thiscompany with humble beginnings grew from a $30 million dollar company to a companyworth $90 million dollars. Although the company attempted to market their computers viawarehouse club stores and superstores, the public, now used to having the abilityto choose and build as they wanted, did not respond as hoped and the company returned todirect sales.Dell’s 10th anniversary was celebrated in 1994 with the release of a brand new logo. And1996 found the company selling the popular computer systems direct to the customer onDell’s own internet website. When the company acquired Compaq in 1999 they becameknown as the top seller of personal computer systems in the United States.2002 became the year of company expansion as Dell began to also provide such products astelevisions, digital audio players and computer printers. The following year, 2003 thecompany became known as Dell Inc. in an effort to acknowledge the company’s expansioninto other products. The year 2004 saw a new manufacturing assembly plant near Winston-Salem, North Carolina and Michael Dell while deciding to appoint Kevin Rollins as newCEO, decided to retain the position of Chairman of the Board. In 2007 CEO Kevin Rollinsresigned and Michael Dell resumed his position as CEO. Dell is also one of the largestsuppliers of dedicated servers to web hosting companies.Company currently manufacturescomputer systems in the following locations: Austin, Texas; Nashville, Tennessee; Miami, Florida; and Winston-Salem, North Carolina in the U.S. Chennai, India Hortolândia, Brazil Limerick and Athlone, Ireland Łódź, Poland Penang, Malaysia Xiamen, China4Prepared by Roni Bhowmik
  6. 6. SHENYANG AEROSPACE UNIVERSITYDell World conversation map:While true that Dell Inc. has experienced some trouble spots in the past few years, thecompany continues to be one of the largest computer manufacturers due mainly to the longrecord of customer satisfaction. While others have adopted the model of direct sales, Dell Inc.continues to be the most successful and the most popular.Founder Michael Dell with hisPCs Limited (the precursor to Dell Inc.) prototype, which isnow housed at the Smithsonian Institution.This is the first designed computer Turbo PC by DellInc. in 1984.5Prepared by Roni Bhowmik
  7. 7. SHENYANG AEROSPACE UNIVERSITYCompany Profile at a Glance: Items Description Company Name Dell Inc. Company logo Company type Public Ltd. Traded as NASDAQ: DELL, NASDAQ-100 Component, S & P 500 Component Computer Systems, Computer Peripherals, Computer Industry Software, IT consulting, IT services Founded Austin, Texas November 4, 1984 Founder(s) Michael Dell Headquarters 1 Dell Way Round Rock, Texas, U.S. Area served Worldwide Key people Michael Dell (Chairman & CEO) Products Desktops, Servers, Notebooks, Netbooks, Peripherals, Printers, Televisions, Scanners, Storage, Smart Phones Revenue US$ 61.49 billion (FY 2011) Operating income US$ 3.43 billion (FY 2011) Net income US$ 2.63 billion (FY 2011) Total assets US$ 38.59 billion (FY 2011) Total equity US$ 5.64 billion (FY 2011) Employees 103,300 (January 2011) Subsidiaries Dell Services Alienware First designed computer Turbo PC First designed computer sold United States First computer sold price $795 U.S dollars Website Dell.com6Prepared by Roni Bhowmik
  8. 8. SHENYANG AEROSPACE UNIVERSITYKey Milestones:1984: Michael Dell founds Dell Computer Corporation.1988: The Company goes public with 3.5 million shares ofcompany stock.1991: Dell introduces its first notebook PC.1993: Dell establishes subsidiaries in Australia and Japan.1996: Dell is added to Standard & Poor’s 500 stock index. Company begins selling over theInternet.1997: Dell introduces a line of workstations.1999: Dell opens a plant in Nashville, Tenn.2001: The Company gains the leading share of the global PC market.2003: Reflecting its widening interests, the company changes its name to Dell Inc.June 2004: Speculation begins about the possibility of a Dell expansion in the Piedmont.July 2004: Michael Dell announces he will step down as CEO but remain chairman.Nov. 4, 2004: A bundle of tax incentives, worth at least $242.5 million over 15 years, clearsthe N.C. legislature.Nov. 9, 2004: Dell chooses the Triad as the location for its third U.S. factory. Guilford andForsyth counties are possible sites, with 1,500 workers employed within five years. Gov.Mike Easley and Rollins shake hands to seal the deal. Local governments begin to craftincentives.Nov. 19, 2004: Guilford lays out its offer of $7.1 million in incentives.7Prepared by Roni Bhowmik
  9. 9. SHENYANG AEROSPACE UNIVERSITYDec. 7, 2004: The Greensboro City Council votes to offer $5.3 million in cash grants andother incentives.Dec. 13, 2004: Forsyth County passes largest economic incentives package in county history,offering $14.8 million in cash and services.Dec. 14, 2004: Davidson County approves a $23.1 million incentives package.Dec. 20, 2004: The Winston-Salem City Council approves an $18.9 million package.Combined with the Forsyth County offer and free land, the total package is $37.2 million.Dec. 22, 2004: Dell selects Forsyth County site for the plant. Dell receives an incentivepackage from the N.C. General Assembly with up to $225 million in tax credits spanning 15years. In return, the company is expected to create at least 1,500 jobs and invest $100 millionover five years. Total incentive deal from local and state is more than $300 million.June 2005: Robert Orr, a former N.C. Supreme Court justice and the head of non-profit N.C.Institute for Constitutional Law, files a lawsuit challenging the $242 million in incentivesapproved by the N.C. General Assembly and the $37 million offered by Winston-Salem andForsyth County.May 10, 2006: Wake Superior Court Judge Robert Hobgood dismisses incentives lawsuit.March 2008: Dell introduced the first consumer desktop that meets ENERGY STAR 4.0requirement.January 2009: Dell agrees to a legal settlement with states that said the computer companymade misleading financing and service offers to PC buyers. Dell agrees to pay $3.85 millionto North Carolina and at least 44 other states participating in the settlement. A portion of themoney will be used to reimburse states for legal costs, including $75,000 for North Carolina.February 2009: Dell announces plans to cut $4 billion in annual costs by the end of fiscal2011, $1 billion more than its earlier goal. Layoffs are announced for the computer assemblyplant in Forsyth County, but Dell officials declined to describe the positions or say how manypeople would be laid off.8Prepared by Roni Bhowmik
  10. 10. SHENYANG AEROSPACE UNIVERSITYApril 2, 2009: Dell announces additional layoffs at its Forsyth County computer assemblyplant but refuses to say how many people lost their jobs.May 11, 2009: Frank Miller, Dell’s vice president for operations in the Americas, tells theWinston-Salem City Council that Dell now employs 1,140 people, 260 fewer than it did inJanuary.Oct 7, 2009: Dell announces plans to close its manufacturing plant in Winston-Salem byJanuary 2010.Management Hierarchy:A board of directors of nine people runs the company. Michael Dell, the founder of thecompany, serves on the board. Other board members include Don Carty, William Gray, JudyLewent, Klaus Luft, Alex Mandl, Michael A. Miles, and Sam Nunn. Don Carty William Gray Michael Dell Judy Lewent Sam Nunn Klaus Luft Alex Mandl Michael A. MilesShareholders elect the nine board members at meetings, and those board members who do notget a majority of votes must submit a resignation to the board, which will subsequentlychoose whether or not to accept the resignation. The board of directors usually sets up fivecommittees having oversight over specific matters. These committees include the AuditCommittee, which handles accounting issues, including auditing and reporting; theCompensation Committee, which approves compensation for the CEO and other employeesof the company; the Finance Committee, which handles financial matters such as proposed9Prepared by Roni Bhowmik
  11. 11. SHENYANG AEROSPACE UNIVERSITYmergers and acquisitions; the Governance and Nominating Committee, which handlesvarious corporate matters (including nomination of the board); and the Antitrust ComplianceCommittee, which attempts to prevent company practices from violating antitrust laws.The corporate structure and management of Dell extends beyond the board of directors. TheDell Global Executive Management Committee sets strategic directions. Dell has regionalsenior vice-presidents for countries other than the United States, including David Marmontifor EMEA and Stephen J. Felice for Asia/Japan. As of 2007, other officers included MartinGarvin (senior vice president for worldwide procurement) and Susan E. Sheskey (vicepresident and Chief Information Officer).Mission, Vision, Objective:Starting with the core of the business, Dell’s vision, mission, and values are clearly definedand posted on the company web site. Dell’s focus is being ―first to volume, not first tomarket.‖ In other words, their priority is to be innovative in mass production and sales ofcomputers, not necessarily to be innovative in the technology itself. The company hasdeveloped strong relationships with its customers and suppliers that allow it to leverageinformation gained to develop insight into the marketplace and the future needs of customerswhich aids in strategic planning and forecasting.Vision Statement:It’s the way we do business. Its the way we interact with thecommunity. Its the way we interpret the world around usour customer’s needs, the future oftechnology, and the global business climate. Whateverchanges the future maybring our vision Dell Vision will be our guiding force.So Dell needs full customer satisfaction. In order to become the most successfulcomputercompany, they need the newest technology and loyal customers.Mission Statement:Dells mission is to be the most successful Computer10Prepared by Roni Bhowmik
  12. 12. SHENYANG AEROSPACE UNIVERSITYCompany in the world atdelivering the best customer experience in markets we serve.The mission statement of Dellhas been divided into three parts customer satisfaction that states ―We are an establishedcompany striving to satisfy customers by meeting their demands of quality, responsiveness,and competitive pricing. Each customer is #1‖ , team satisfaction that states, ―Managementand employees are committed to cooperating as a team for the purpose of profitability andgratification of a job well done‖ and community satisfaction ―We will provide jobs in a clean,safe, environmentally sound atmosphere and be an active participant in community affairs‖(Dell, 2010).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. Team satisfaction for the purpose of profitability and gratification of a job well done. Community satisfaction of the world base. Our response time to our customer’s inquires and requirements shall meet our customer’s needsObjective:The main objectives of their company are tomake sure that- Dell shall maintain sufficient profits, The products that Dell produce shall meet all customer requirements, Dell response time to time their customer’s inquires and requirements shall meet their customer’s needs.11Prepared by Roni Bhowmik
  13. 13. SHENYANG AEROSPACE UNIVERSITYMacro Environment (PESTLE):Dell’s environment consists of uncontrollable forces that directly or indirectly influence anorganization’s ability to achieve a desired result. In the words of Kotler and Armstrong―marketing environment consists of the actors and forces outside marketing that affectmarketing management’s ability to build and maintain successful relationships with targetcustomers‖ (Kotler & Armstrong, 2003). These influences create both opportunities andthreats for a manager. I use the PESTLE analysis for determining the Dell macroenvironment analysis.Political Factors:State and local government leaders are tasked with serving andprotecting citizens, delivering state-of-the-art governmentservices and maintaining a high level of transparency. Yet,meeting these objectives in the face of decreasing budgets ischallenging, forcing government leaders to root out inefficiencies in all areas,including IT. Dell’s IT transformation strategy provides solutions that help ITleaders simplify, modernize and innovated their infrastructures so that IT is a toolthat moves the government forward. The political environment of the business haspivotal effects on the performance of the business in the quest of achieving its strategic goals.The political instability started after the 9/11 has affected the market conditions all over theworld. Most of the computer manufacturers belong to US and the country government is12Prepared by Roni Bhowmik
  14. 14. SHENYANG AEROSPACE UNIVERSITYtaking huge efforts to facilitate the business. This offers exciting opportunities across theworld to manufacturer like Dell, HP, Acer, Toshiba, and IBM etc. In order to capitalize thegrowing needs of the market the government of US has strengthen its ties with China in orderto exploit the comparative advantage of the country in the form of low labor andtechnological cost.Economic Factors:The economic environment has gone through tremendouschanges after the advent of 9/11. In fact the event hascompletely changed the economic conditions of the world. Companies that were consideredas giant in the market are now myths of the history. The condition stabilize relative in year2006 and 2007 but after insolvency of Lehman Brothers and other giants of the US theeconomic condition all the world suffered. The interest rates are not stable due to hugefluctuation that arises from the instability in the financial situations. Inflation all over theworld has surged to all time high. Due to huge expenditure on war terror fought in Iraq,Afghanistan and other parts of the world the GDP of various countries have shown a very lowgrowth that have resulted in almost stagnant per capita income.Socio-cultural Factors:The values across the continents are changing with the passageof time, and now a global culture is arising meaning the presenceof universal segment having the same values, likes and dislikesand other norms across the world. The national demand for computers is dependent on theeducational level prevailing in a specific country. The higher the educational standard, thehigher is the demand. Furthermore, computers get more and more involved in daily life.13Prepared by Roni Bhowmik
  15. 15. SHENYANG AEROSPACE UNIVERSITYToday, children already get familiar with the use of computers at a very young age,representing a generation that will hardly live and work without a computer in the future.Additionally, the brand image of a computer and lifestyle trends get more and more decisivefor the purchasing decision. The computer industry adapts to this trend, e. g. by offering awider range of notebooks and by trying to create a strong brand name. This translates intovarious economies, and low fixed costs, meaning change in attitude towards foreign brand.Technological Factors:Due to advent of the information technology the world hascondensed to global village. The computing technology isleading the change from the front by offering excitingopportunities for advancement in technology. Technology has enabled the variousmanufacturers to enjoy low cost advantage and better quality. Manufacturer across theindustry are trying their level best to offer innovative products at competitive prices.Moreover the demands for the industry offerings are increasing with the passage of time dueto extensive use of Internet and World Wide Web.Legal Factors:Dell has nonqualified deferred compensation plan for the benefitof certain management employees and nonemployees directors.The Deferred Compensation Plan permits the deferral of base salary and annual incentivebonus. Dell delivers multiple programs that help employees keep themselves and theirfamilies healthy. They monitor their programs for effectiveness and compliance. Globalbenefits and Environmental Health and Safety (EHS) teams engage employees throughvoluntary, on-site programs that offer medical screenings, vision checks, immunizations,14Prepared by Roni Bhowmik
  16. 16. SHENYANG AEROSPACE UNIVERSITYsmoking cessation and stress management programs and events. The base internationallyrecognized product safety standard for Information Technology Equipment (ITE), such ascomputer systems, printers and monitors, IEC 60950 provides design and testingrequirements for safe use of the equipment. Dell was fined for fraudulent and deceptiveadvertising within the consumer complaints forum, part of the Business and Finance Lawcategory. But in this time Dell maintain all rules and regulations.Environmental Factors:Dell interest in the environment goes beyond the mandatesof governmental regulation. Dell vision is to create a culturein which environmental excellence is second nature. Dell operations will place a high priorityon waste minimization, recycling, reuse programs and pollution prevention. Dell willcontinuously improve the environmental friendliness of their products and procedures so thatthey meet or exceed industry standards and applicable regulations.15Prepared by Roni Bhowmik
  17. 17. SHENYANG AEROSPACE UNIVERSITYMicro Environment (SWOT): A situation analysis is a technique for matching organizational strength and weakness with environmental opportunities and threats to determine the organizations right which is known as SWOT analysis (strengths, weakness, opportunity and threat). Every organization should be able to identify the purpose for which it is best suited. Strategies are faced not with snapshots of the environment and theorganization but with a movie of rapidly changing events. Strategic planners, whether topmanagers, key operating managers or staff planning specialist, have many way to scan theenvironment for opportunities and threats. They can study tell-tales shifts in the economy,recent innovations, growth and movement among competitors, market trends, laboravailability and demographic shifts. One needs to store out environment opportunities andthreats carefully. A perceived threat may turn out to be an opportunity or vice versa. Step canbe taken to turn negatives into positive.On May 3, 2010, Fortune Magazine listed Dell as the 38th largest company in the UnitedStates and the 5th largest company in Texas by total revenue. It is the 2nd largest non-oilcompany in Texas (behind AT&T) and the largest company in the Austin area.This facilitates the comparison of the internal analysis - strengths and weaknesses, and itsexternal analysis - opportunities and threats.I use the SWOT analysis for determining theDell micro environment analysis.Strengths: Ranked as the 2nd largest PC maker globally (2010) Dellis the biggest PC maker in the world - economies of scale16Prepared by Roni Bhowmik
  18. 18. SHENYANG AEROSPACE UNIVERSITY Strong brand recognition Customer oriented marketing strategies Ranked as 38 in Fortune 500 (2010) Ranked as 5 in Fortune 500, Most Admired Companies in the computer industry (2010) Cuts out the retailer Lean supply chain; relatively cheap labor Online capabilities to customize products 24X7 customer support They use JIT (Just In Time) approach Strong service reputation Manufacturing excellence allows diverse products and bespoke orders Experienced top management Dell has nine of manufacturing plants Global experienced They ship around one hundred and forty thousand computes in a day Strong market share Good profitability and strong solvency Wide distribution of network Dell is PC maker, not PC manufacturerWeakness: Door to door delivery problem in emergent countries Some quality concerns from customers Huge range of products and components from many suppliers from various countries Commoditization Dell not able to attract the students of schools and colleges, this segment earn only 5% of total revenues They have weak business relationship with many computer retailers Dell is dependent on its suppliers Inventory17Prepared by Roni Bhowmik
  19. 19. SHENYANG AEROSPACE UNIVERSITY Closure of Dell’s biggest call center in April, 2003 terminating 1100 employees Customers view the products as "not state of the art" Leadership and management revolve around only one person, CEO power only simple Decreasing trend of market share Elimination of bonuses in 2006 to increase the company financial performance They build computers, not develop themOpportunities: Maintaining the excellent lead that was taken by the founder, Michael Dell will be challenging Diversification strategy by introducing many new products to its range Making and selling low-cost, unbranded low-price computers to PC retailers in the United States Cost reduction in latest technology It should also propose its business regarding the students due to the high level of reliability of students on PC’s in the modern technological era Growing income Maintaining and expanding the one stop shopping abilities that are offered to their customers Increase the world government and education market Broadening their scopes in Europe, India, Bangladesh, Pakistan, and ChinaThreats: Competitive rivalry that exists in the PC market globally New entrants to the market pose potential threats18Prepared by Roni Bhowmik
  20. 20. SHENYANG AEROSPACE UNIVERSITY Exposed to fluctuations in the World currency markets (i.e., changes in exchange rates) Substitute products (ipadetc) High cost of discovering new products and fewer discoveries The industry is highly competitive Tariff trade barriers affecting their positions in multiple countries Increasingly lower prices for products amount their competitors High bargaining power of the suppliers Strong competitors like Hewlett Packard, Acer, Intel, IBM Aggressive marketing by competitorsIndustry Analysis: The economic structure of an industry is not an accident. Its complexities are the result of long- term social trends and economic forces. But its effects on everyone as a business manager are immediate because it determines the competitive rules and strategies. Michael Porter has identified five forces that are widely used to assess the structure of any industry. In analysing an industry future prospect industry analysis is very important in which the industry is competing because the profitability of various industries differs over time. Porter’s five forces are the:19Prepared by Roni Bhowmik
  21. 21. SHENYANG AEROSPACE UNIVERSITY Rivalry among the Exiting firm Bargaining Threats of power of new Supplier Porter’s Entrants 5 Forces Bargaining Threat of power of Substitute Buyers product » Rivalry among the exiting firm: Computer industry or IT sectors has huge competition, because in this sector very important in this time. Every person one of the main basic need to in this timetechnology use, in this situations overall world very vital is computer industry. In this global market computer industry place risky position, because in the Dell not rich company. As this situation, Dell computer can’t establish world class product. The personal computer industry from the beginning is inclined toward consolidation, as the market type can rightly be cited as oligopoly. The industry contains players like Dell, IBM, HP, Toshiba,20Prepared by Roni Bhowmik
  22. 22. SHENYANG AEROSPACE UNIVERSITY Gateway etc. The competition in the market is based on price and competitive advantage. Highly competitive: Ready for action if any chances take in this competitive open market. Any company go to market create any country and in this time rich company capture to the market. In this situation local industry losses there market, not only local but also international market. Example of this situation Intel and IBM capture to the world market, most of the country computer market capture to theirproduct. High fixed cost and high working capital: Computer company establish very expensive to fixed cost, because her mechanism high costly. In her production instrument cost also high, there are required highly qualified persons. And mechanism maintained cost need huge working capital. Strong Pressure: It is information technology time, in this time small to big every business sector run strong pressure and competition. Dell always runs pressure because China computer industry very strong, so they are ready to capture market. Globally open market: In this time world is create a global village market opportunity to the information technology. So one company easily go to global market and sell their product world-wide. Though computer industry have some rules and regulation in global market. In this situation if any company sell their product cheap rate and good quality, then this company easily capture market. As like Bangladeshi company Daffodil computer sell there some PC UK, South Africa, and Middle East country because there good quality. High switching cost: Computer industry switching cost very high, so because there fixed cost high. In this situation investor can’t interest computer industry. Low customer loyalty: Low customer loyalty in Computer Company, because some time computer company produce low quality PC. As like some time21Prepared by Roni Bhowmik
  23. 23. SHENYANG AEROSPACE UNIVERSITY ago1990DellCompany produces low quality PC and many orders next time cancel. In this situation Dell Company lost loyalty in general people. » Threats of new entrants: Strong Pressure to new entrants because computer industry is much competitive in the market. There were many strong rival existed in the market. That’s why it was much difficult to enter in the market for new computer Company.Every player tries its utmost to beat and outperform competitors by producing the latest technology and then price them competitively. This probably the reason that new firms find it very hard to enter the market and the existing competitors trying their level best to either maintain their market. Very low barriers to entry: Computer industry very low barriers to new entry, in this time new investor encourage investing in this sector. But new investor done this work not trouble-free because much competitive in the market in existing company. In this situation many country newly entry invest this sector and it is one kind of threat in Dell company. Economies of scale exist: In existing company use the economies of scale to take the market position. Existing company produce the product extent level and they are benefited to cost. Dell histories not mature in this position other Company uses this opportunity. » Threat of substitute product: Low Pressure in substitute because USA computer position very high, Dell is one of them famous. In our Asian country India and is very strong in IT or computer industry, so it is threat in Dell. In this time computer is very important every sector or every work.Usually the availability of substitute does affect the sales and profitability of the computer and its various components to huge extent. Traditionally the threat of substitutes is very high for Dell. The computer industry has traditionally experienced similar products produced by the different manufacturer with a very little distinction between a computers produced by one manufacture with that of other. The competition between the rivals can be22Prepared by Roni Bhowmik
  24. 24. SHENYANG AEROSPACE UNIVERSITY rightly cited as oligopoly because almost all the major producer manufactures identical products. » Bargaining power of buyers: Low pressurebecause Dellcomputer is very much responsible about their customer. They offer competitive price as like as competitors offers their customer but maintaining quality. In the personal computer industry the bargaining power of the buyer is very high due to the fact that there is very less amount of brand loyalty in the market because most of the manufacturer produced identical products. In additional to absence of brand loyalty, the switching cost is very low in the industry because most of the systems are based on the Intel processor. Moreover, customer also feels comfortable with backward integration and building their own system through selecting the individual components manufactured by different producers. Brand identity exists and is in the hands of influencer: Dell computer has already brand identity exists and is in the hands of influencer but people some time avoid Dell company. Because some timeDell can’t maintain to their quality, in this situation they need to more use influencer. End consumers do not have bargaining power: Final consumers do not have enough bargaining power in the world. Because they can’t take enough substitute computer as like cheap price. » Bargaining power of supplier: Low pressuretheyhave much ability to compete with other supplier in computer industry. Dell has enough bargaining power to supplier; they are shift any time to their necessary raw material supplier. Traditionally the bargaining power of suppliers is also very high in the computer market. This is due to the fact that there are very few suppliers who supply the major components of the computer. For example the major suppliers of microprocessor are Intel and AMD. They are almost having the monopoly over the market. Moreover the organization will bear significant switching if the decided to change the component part suppliers. Volume benefits occur: Dell purchase there important raw material large volume, in this situation they take volume benefit. If the supplier bargaining to their products then they are shift supplier, sometimes it is difficult because computer industries necessary raw material seller only some company.23Prepared by Roni Bhowmik
  25. 25. SHENYANG AEROSPACE UNIVERSITY Numerous suppliers- switching cost low: When the Dell demand to low price then many suppliers sometimes switching cost low. Raw material cost constitute major portion of total expenses: We know computer industries raw material cost constitute major portion of total expenses. In this situation Dell try to their cost minimize bargaining when purchase raw material.Degree of actual and potential competition depends on first 3 forces and a rest 2 forcedetermines the relative bargaining power in input and output markets.24Prepared by Roni Bhowmik
  26. 26. SHENYANG AEROSPACE UNIVERSITYStrategy and Tactics (Ten Years):Strategy, a word of company origin, refers to a plan of action designed to achieve aparticular goal."Strategy isthe direction and scope of an organisation overthe long-term: which achieves advantage for theorganisation through its configurationof resources within a challenging environment,to meet the needs ofmarkets and tofulfil stakeholder expectations".Another side,Tactics are the meat and bread of the strategy.They are the ―doing‖ aspect that follows theplanning. Tactics refer specifically toaction.While strategy tends to involve the higher ups of an organization, tactics tend toinvolve all members of the organization. Following the Dell ten years Strategy and Tactics:Strategy:2011Dell is committed to a capital allocation strategy that includes investments indeveloping and acquiring new intellectual property, enhancing their sales capabilitiesand in theiron-going stock-repurchase program. Dell announced in April that it plans toinvest $1bn (£613m) in new datacentres and technologies during its current fiscal year,offering both private and public cloud services.Dell Cloud Services can help you develop asuccessful strategy that achieves your unique business goals.Dells plans to move away fromlow-cost hardware and into the cloud space highlight the market momentum behind so-called"as-a-service" offerings. In April, Dell announced a $1 Billion investin technologysolutions and services. These investments will result in building out next-generationcloud data centers, and the expansion of Dell Global Solution Centers to helpcustomers architect, validate and build solutions that power their businesses. Earlierthis week, Dell opened their first Solution Center in Limerick, Ireland.25Prepared by Roni Bhowmik
  27. 27. SHENYANG AEROSPACE UNIVERSITY2010Dell focused on improving their core business, shifting portfolio to higher-margin andrecurring revenue streams over time, and maintaining a balance of liquidity, profitability, andgrowth. Dell consistently focuses on generating strong cash flow returns, allowing expandingtheir capabilities and acquiring new ones. Dell seeks to grow revenue over the long termwhile improving operating income and cash flow growth.Dell Disclosed that in 2010 Partofthe Strategic Plan to Increase Investment in China.2009Dell’s vision is to create a company culture where environmental excellence is second nature.Their mission is to fully integrate environmental stewardship into the business of providingquality products, best-in-class services, and the best customer experience at the bestvalue.Their goal is to increase computational processing useful work performed as energyrequirements drop. Meaningful difference: Dell must continue to build trust with customers and stakeholders by demonstrating their positive impact on society and the planet developing meaningful measures for reporting their progress. Design for Energy Efficiency:Grow portfolio of energy-efficient product and services. Packaging solution: Dell continuous work to the packaging. Climate Leadership: Reduce operational carbon intensity 15% by 2012 based on 2007 levels. Further Dell worldwide facilities GHG emissions 40% by 2015. Suppliers: Increase supplier audits, increase transparency and build supplier capability. Positive Work Environments: Work with socially responsible entities that comply with all applicable laws and regulations.2008Michael Dell’s letter describes our strategic initiatives andpriorities across the environmentand supply chain and in corporate governance for year 2008. These include Dellcommitmentsto:26Prepared by Roni Bhowmik
  28. 28. SHENYANG AEROSPACE UNIVERSITY Be the greenest technology company on the planet and the first computer company to achieve carbon-neutral operations by the end of 2008 Continue leadership with their climate strategy and global recycling programs Partner with their customers in energy-efficiency and climate-protection initiatives Broaden their Global Citizenship commitment Recommit their efforts to improve sustainability governanceThe following information highlights some of the commitments Dell has made after listeningto internal and external perspectives and how they areprogressed toward meeting thosecommitments. Not every goal can be achieved in one year. Therefore, Dell will continue toreport some multiyear efforts in the next several years.2007Dell businessstrategy is evolving as they combine their direct customer model with relevanttechnologies and solutions, highly efficient manufacturing and logistics, and new distributionchannels to reach commercial customers and individual consumers around the world.Accordingly, the Board and the Chief Executive Officer have defined the following fourmulti-year strategic corporate priorities: Globalization —Focus on accelerating profitable revenue growth in developing areas of the world; Product Leadership — Design and innovate around non-proprietary standards-based technologies to offer customers what they want, when they want it, and at a level of value they consider to be unparalleled; Customer Experience —Focus on product quality and customer service to instill customer satisfaction, trust, and loyalty; and Winning Culture —Recruit and develop a diverse workforce globally and provide a positive work environment, including recognition based on merit, a focus on customer commitment, the highest standards of integrity and ethical behavior, and community leadership.27Prepared by Roni Bhowmik
  29. 29. SHENYANG AEROSPACE UNIVERSITY2006The priorities resulting from Del customer-focused approach are defined by Dell’s four,multi-year strategic corporate initiatives: driving Global Growth, achieving ProductLeadership, enhancing the Customer Experience and developing our Winning Culture.2005―No other technology company listens to customers, collaborates with partners, adds its ownsignificant layer of innovation and delivers relevant technology more efficiently andeffectively than Dell.‖Dell has been a leader in educating customers about the existence andseverity of computer security risks, including software viruses and Internet spyware, anddeveloped services that help protect systems from unwanted software and ―clean‖ computersalready infected.2004Dell’s business strategy combines its direct customer model with a highly efficientmanufacturing and supply chain management organization and an emphasis on standards-based technologies. The key tenets of Dell’s business strategy are: A direct relationship is the most efficient path to the customer. Customers can purchase custom-built products and custom-tailored services. Standards-based technologies deliver the best value to customers. Dell believes that standards-based technologies are critical to providing customers with relevant, high- value products and services.2003Dell setup their goal to increase shipments, revenue and per share increases used their directmodel.Dellexpects to deliver value for all their constituents theircustomers, investors andother stakeholders regardless of market conditions.Dell always known that volume andmarket-share numbers are expressions of customer experience and satisfaction. Dell regularlyassess their selves against a broad range of customer focused measures, including thetimeliness with which Dell deliver built-to-order systems, the reliability with which theyperform, and the speed and quality of service and support.Dell, constantly challenges28Prepared by Roni Bhowmik
  30. 30. SHENYANG AEROSPACE UNIVERSITYtheirselves to accept individual responsibility: for creating customer loyalty, for doingbusiness with the highest ethics, for achieving operating targets and for fixing problems whenthey see them.2002Dell industry-leading growth occurred even as theirstabilized then began to improve, try totheir operating profitability.By profitably winning business in the midst of industry softness,Dell positioned their selvesexceptionally well for global economic improvement andincreased demand for informationtechnology. And Dell try to retain customers isnoteworthy.Dell work tremendous in three areas of strategic emphasis: enhancing operatingefficiencies to deliver greater customer value, winning in high-growth products and services,and expanding their business in key geographic markets.2001Dell initiated another price war, adding aggressive advertising and cost cutting to thestrategy.The Company’s business strategy is based on its direct business model. TheCompany’s business model seeks to deliver a superior customer experience through direct,comprehensive customer relationships, cooperative research and development withtechnology partners, computer systems custom-built to customer specifications and serviceand support programs tailored to customer needs.Tactics:2011Dell celebrates with saving up to 25% off plus free shipping on select laptops anddesktops. We launchedvStart, which allows us to deliver fully pre-configured virtualmachines. Dell-owned intellectual property (IP) from storage technologyincludingCompellent, EqualLogic, PowerVault, and DX Object Storage grew revenue 11%year over year. Moving forward, they will continue efforts to drive even more revenuethrough Dell-owned IP.201029Prepared by Roni Bhowmik
  31. 31. SHENYANG AEROSPACE UNIVERSITYDell refers to as Large Enterprise, Public, and Small and Medium Business (―SMB‖). Theirglobal Consumer business unit remained the same. This alignment creates a clear customercentric focus, which they believe allows serving customers with faster innovation and greaterresponsiveness, and enables us to better understand and address their challenges. Dell fourglobal business segments are: Large Enterprise — Dell Large Enterprise customers include large global and national corporate businesses. Dell believe that a single large-enterprise unit enhances their knowledge of their customers and thus furthers their advantage in delivering globally consistent and cost-effective solutions and services to many of the world’s largest IT users. Dell seeks to continue improving their global leadership and relationships with these customers. Public — Dell Public customers, which include educational institutions, government, health care, and law enforcement agencies, operate in communities. Their missions are aligned with their constituents’ needs. Small and Medium Business — Dell SMB segment is focused on providing small and medium-sized businesses with the simplest and most complete standards-based IT solutions and services, customized for their needs. Dell SMB organization seeks to accelerate the creation and delivery of specific solutions and technology to small and medium-sized businesses worldwide in an effort to help their customers improve and grow their businesses. Consumer —Dell recently announced Global Communications Solutions business is part of their focus on innovative products and designs for mobile devices. Their focus is on delivering mobile communications solutions for wireless operators and their dedicated customers. Dell as a global technology solution provider – but what is it like inside of Dell’s internal IT shop? With over 90,000 employees and a fast-moving global business focused on technology solutions, Dell internal IT has its hands full. Dell will work with Microsoft to develop a Windows Azure platform appliance for large enterprise, public and hosting customers to deploy in their own datacenters. The appliance will leverage infrastructure from Dell combined with the Windows Azure platform. The Dell management plug-in for VMware vCenter. This plug-in allows their customers to manage Dell hardware from the vCenter management console with a level of integration not seen in any other plug-in. Dell says that, we’re not the ones30Prepared by Roni Bhowmik
  32. 32. SHENYANG AEROSPACE UNIVERSITY saying that, our customers and virtualization industry insiders are. The launch was very successful, with our breakout session so full that they were turning people away at the door.2009 Design for Energy Efficiency: Offered for six Dell Inspiron and four Studio Energy Star configurations. Dell offered to the five Energy Star workstation systems. Added 41monitors and offered a total of 89 Energy Star monitors, 12 multi-function devices and 14 Energy Star printers. Packaging: Reduce product packing and shipping materials 20 million pounds for desktops and 10 million pounds for notebooks by 2012. Dell achieved 9.5 million pound reduction in product packaging. Climate Leadership: Increased green electricity purchases in Dell operations to 19.8%. Completed 88 projects to reduce or avoid 4300 tons of annualized GHG emission. Continue making energy efficiency improvements to equipment and buildings. Transportation and Logistics: Continued to use SmartWay-certified partners and other partners to provide timely and damage-free deliveries. Forest Stewardship: Dell achieved an average of 30% PCW for copy paper in the U.S.; in January 2008 began using 100% PCW copy paper at all Austin, Texas, and Nashville, Tennssee,Campuses. Engagement: Launched new ReGeneration Web site. Suppliers: Hired additional SER staff in China for supplier audits and to build supplier capability. Dell conducted workshops for suppliers in labor, environment, and health and safety. Dell Billion Dollar Roundtable status with more than $1 billion spends with diverse suppliers. Positive Work Environment: Expanded non-discrimination policy to include gender identity, pregnancy and HIV status. Dell improved working conditions at suppliers through audit process.31Prepared by Roni Bhowmik
  33. 33. SHENYANG AEROSPACE UNIVERSITY2008 Employee Relations: Conducted Tell Dell employee survey and developed action plans from feedback 89% of employees participated. Lu Employee Sustainability Engagement: Lunched Employee Storm, an informal employee idea generation tool, engaging more than 25% of worldwide employees in first six months. Employee Volunteerism: Attained more than 30% employee participation in volunteer events. Healthy, Literate, and Connected Communities: Improve employee awareness of health and workplace safety in all regions. Governance and Public Policy: Published public policy online. Updated non- discrimination policy in Dell Code of Conduct. Stakeholder Dialogue: Held five stakeholder meetings. Supplier Diversity: 80% of Tler 1 suppliers signed letter of commitment. Presented two capability building workshops in China for suppliers. Design for the Environment: Offered 15 Energy Star desktop configurations including one consumer system and one workstation. Offered 9 Energy Star notebook systems, including one workstation. Offered 5 Energy Star workstation systems. Chemical Policy and Use: Achieved 90% of reduction goal for lead and 94% of reduction goal for BFRs as of the end of Fiscal year 2008. Reduced packing by 5440 tons. Climate Protection: Increased green electricity purchases in North American operations. Opened two new plants India, Poland to manufacture computers closer to customers, optimizing shipping routes and reducing shipping emissions. Product Recovery and Recycling: Recycled and reused more than 95% of non- hazardous waste from manufacturing operation. Forest Stewardship: Reduced U.S. paper use in offices and manufacturing by 26 % over two years. Obtained approximately 29% of catalog and insert fiber from FSC certified sources globally.Dell acquired Equal Logic, which is a provider of high-performance storage area networksolution.32Prepared by Roni Bhowmik
  34. 34. SHENYANG AEROSPACE UNIVERSITY2007Beginning in 2007, Dell began forming partnerships with large retailers across the U.S.,Europe and Asia. Notable among these are Wal-Mart Stores, Best Bay (BBY), CostcoWholesale (COST), Staples, Carrefour and Suning and Gome, Chinas largest electronicsstore. These partnerships represent a drastic departure from Dells previous strategy whichpurposely excluded any relationships with retailers. As a result, in addition to its traditionalmail order distribution system, Dell has nearly 24,000 retail locations worldwide. Dell was the first major systems provider that joined a cooperation project between Microsoft and Novell. Dell launched its Direct 2 Dell corporate blog as well as the customer idea engine Idea Strom and various online forums for business clients. The committee seeks to increase shareholder value by rewarding performance with cost-effective compensation. Dell managing fixed costs by combining a conservative approach to base salaries and benefits, with more aggressive performance-dependent short- and long-term incentives. Del start at Home Service for technical support service at home or work, Express Tech Support for priority access to Dell’s technical support team, and home installation services. Increased pressure from competitors combined with poor execution led to an erosion of market share and ultimately culminated in a change of leadership. The key elements of the compensation program for our executive officers are base salary, annual incentive bonus, long-term incentives, and benefits and perquisites. Dell designed to keep the salary close to the market median. The committee determined that the key component of his compensation was performance-based bonus. Dell has separated its basic and extended warranty accounting! And what a surprise it contains. It turns out that basic warranty expenses are much smaller, and extended warranty revenues are much larger, than anyone outside the company ever imagined. The PC industry’s increasing maturity pushed Dell to shift its longstanding direct sales model.33Prepared by Roni Bhowmik
  35. 35. SHENYANG AEROSPACE UNIVERSITY Dell has announced retail relationships with Wal-Mart and Sams Club in the U.S., Carphone Warehouse in Europe and Bic Camera in Japan. In December 2007, Dell partnered with WPP (after withdrawing its advertising responsibilities from over 800 different agencies worldwide) which launched its own specialist unit Enfatico with Dell as its only customer. Dell appears to be a company of the future; they’re opening the lines of communication using the web to build better products and services.2006 To demonstrate Dell confided to their direct model as the blueprint for success whenever they do business and commitment to continued growth. Dell opened new facilities in Germany, Scotland, Ireland, India, EI Salvador, Canada, China, the Philippines and the U.S. Dell is poised for break-out growth in China, a country that is rapidly embracing the direct model as internet usage continues to boom. Dell designing and innovating around standards and simplifying enterprise offerings such as network servers, storage systems and enhanced services, Dell made it easier to acquire deploy and manage information technology. Shipments of Dell PowerEdge servers increased 24 percent, and their set an industry record for x86 servers shipped annually in the U.S. Innovations resulting from their four-year collaborative relationship with EMC have driven networked-storage costs down by 91 percent. Including a decline in the rate of service contacts measured against systems under warranty. Dell enhanced products and services, reduced organizational complexity and made substantial investments in capacity, technology and people — from new customer contact centers and an innovative remote software tool called TechConnect to 2,500 additional Dell on Call service professionals. Dell committed to empower employees to do their job right the first time, and to take personal ownership for being the reason customers choose and come back to Dell. More than 10,000 new team members joined the company.Dell further developed its online help and support service by starting an initiative called ―Dell Connect‖.34Prepared by Roni Bhowmik
  36. 36. SHENYANG AEROSPACE UNIVERSITY Dell becomes one of the first computer producers integrating Blu-Ray Disc technology into its notebook computers.2005 ―Dell growth in printing and imaging represents the most successful new-product entry in Dell history, and is the latest example of how prices drop and customer value increases when we enter a product segment.‖ Customers increasingly rely on us for an extensive range of products and services to improve their businesses and personal lives. Dell growth in printing and imaging represents the most successful new-product entry in Dell history, and is the latest example of how prices drop and customer value increases when we enter a product segment. Provide quality products and services, resolve issues when they arise, and show customers how highly they’re valued at Dell. For each of those areas, we persistently track and act in response to how customers say we’re performing against a variety of specific standards. Dell is encouraging personal accountability for customer satisfaction and company performance. Dell is maintaining a higher standard of integrity and ethical behaviour, and building and developing a workforce that is diverse in background, skill, thought and potential. With strong double-digit increases in all Dell product categories and regions of the world, the feedback loop we listen to—and innovate based on—grows larger every day. Dell redesigning their systems for the environment, reducing the volume and original content of supplies used in manufacturing and distribution, and recycling paper, plastic and other resources in Dell operations worldwide.2004 Dell is building on programs that allow consumers in the United States to ship unwanted computers—or have them picked up and delivered—to recycling centers at very low costs.35Prepared by Roni Bhowmik
  37. 37. SHENYANG AEROSPACE UNIVERSITY Dell provides online diversity and multicultural training, networking groups, mentoring, career coaching and work/life effectiveness programs to ensure Dell recruits and retains the best and brightest talent in the industry. Dell it has office and manufacturing space in approximately 41 countries. By applying the direct model to its services business, Dell seeks to simplify customers’ computing experience by offering a full range of flexible, tailored solutions. Dell offers a portfolio of services that help maximize information technology (―IT‖), rapidly deploy systems, and educate IT professionals and consumers. The Dimension product line typically features the latest high-performance components. Dell’s supply chain management decreases Dell’s exposure to the risk of declining inventory values, allows Dell to quickly incorporate new technologies or components into its product offerings and allows Dell to rapidly pass component cost savings directly to customers. Dell’s online training programs feature over 1,200 courses for consumer, business, and IT professionals. Dell provides a limited warranty for all computer systems for a period generally ranging from 90 days to three years and offers 24 hour telephone and online technical support.2003 Dell introduced multifunction flat panel TVs, DJ music player, an online music download service, digital music player, and projectors. And Dell may release an MP3 player like the iPod. Dell started its ―Dell Recycling‖ program, which encourage its customers to either recycle their old computers and components or donating them to charity. In 2006, the program has even been extended in this way that Dell offered all its clients to recycle all Dell products for free. The traditional supply chain had two fundamental differences: disintermediation and real-time production. Dell sold directly to its customers cutting out the middlemen. Dell announced a new Enterprise Command Center (ECC) to provide high-level, 7x24x365 support for sever and storage customers in the Americas. The ECC was based on crisis management best practices of 911 and related crisis centers.36Prepared by Roni Bhowmik
  38. 38. SHENYANG AEROSPACE UNIVERSITY Dell never focused on new product development. It spends a little on R&D and doesn’t even pretend to be a technology innovator. Dell had the lowest operating expenses in the industry owing to this direct business model helped it sell its products cheaper than its competitors.2002 Dell launched ―Quick Ship‖ program. Under the program, customers could choose from a range of select PCs and Dell would build their system and ship it in 48 hours. Dell climbed to market leadership by directly selling computing products and services based on industry-standard technology. And Dell introduces Power Connection network switches. Dell began to sell both inkjet and laser printers, and within three it managed to grab 20% of the U.S. inkjet printer market. Use JIT formula sales increase China is expected to more than triple.2001 Dell’s supply chain system, i2, went live with more than 120Intel based servers. i2 helped Dell to integrate forecasting, planning and execution capabilities with complete visibility across the supply chain. Dell extended its product portfolio to the consumer electronics market by launching network switches. Dell introduces Power App appliance server. Dell ships its one millionth Power Edge servers. More than a ―first-mover‖, Dell became a ―first-prover‖. The ―manufacturer-direct‖ business model became the largest single method of buying PCs, with 23% of the purchases, passing consumer electronics stores, which sold 19% of the PCs. Dell restructured earlier than the competition, reducing the company’s workforce by seventeen hundred. And another three thousand jobs later that year. Taking advantage of the atmosphere of uncertainty surrounding the merger between Compaq and Hewlett-Packard, Dell cut price and captured market share. When Hewlett-Packard implied possible price increases to offset low profit in 2003, Dell cut prices again and captured market share.37Prepared by Roni Bhowmik
  39. 39. SHENYANG AEROSPACE UNIVERSITYDell Inc. different products-38Prepared by Roni Bhowmik
  40. 40. SHENYANG AEROSPACE UNIVERSITYFindings of the Report:Major’s findings of the report are as follows-Risk: Dell believed that its business was exposed tovarious risks: General economic and business conditions; Weakening global economic conditions and instability in Financial markets Strong competition Political instability, unexpected regulatory changes Disruptions in component or product availability Unfavorable results of legal proceedings Loss of Government contracts Employee jobs not safe Changing environmental laws Trade protection measures, tax laws, copyright levies Information technology and manufacturing infrastructure disruptions or breaches of data security Unfavorable outcomes in tax audits and other compliance and matters Disruptions in component or product availability The level of demand for the companys products and services Armed hostilities, acts of terrorism or other conflicts The level and intensity of competition in the technology industry Periodic product transitions Inability of the company to develop new products based on new or evolving technology and the markets acceptance of those products Inability of the company to manage its inventory levels to minimize excess inventory, declining inventory values and obsolescence The product, customer and geographic sales mix of any particular periodEvery business regulatory environments become more and more complex, risk managementis increasingly critical to Dell. Follow this- Risk Compliance for Capital Markets39Prepared by Roni Bhowmik
  41. 41. SHENYANG AEROSPACE UNIVERSITY Digital Strategy and Risk Assessment Email Security and Continuity Enterprise Compliance Efficient Data Center and Lowers Costs IT’s Part of the Corporate Risk P The Business Risk of a Lost Laptop Technology Risk Marketing Risk Operational Risk Liquidity Management Risk Intellectual Property Risk Financial Risk Foreign Currency Risk Reputation Risk Accounting and Governance RiskProblem: Financial Trouble: 38% of the time financial trouble due to its business fails. Power Supply Problem with Dell Dimension 4600 Dishonour of warranty and complete cover Customer service are poor Problem with dell monitor Problems with Desktop Monitor or Laptop Screen Screen, Icon, or Font size too small or too big The problem at Dell wasnt the CEO. Its the commodity R&D Fuzzy, Blurry, or Color Problems Brightness, Contrast, or Geometrical problems Dell to keep cutting prices to gain market share Dual Monitor Setup problem Webcam Central software and integrated webcam Dell Refuses Blame for OptiPlex Problem Admit Hardware Problems Could Spell Big Trouble40Prepared by Roni Bhowmik
  42. 42. SHENYANG AEROSPACE UNIVERSITY Wireless Firmware missing problem for dell Inspiron 1564 model Black ink problem with dell 920 all in one printer Problem with Dell Bluetooth keyboard and/or USB ports Dells Exploding Computer and Other Image Problems Problem with Dell Streak touchscreen Problem with Dell New Studio Laptop Vista boot problem on Dell laptop Ps2interface problem with Dell 5150 Online order system some problem strongly41Prepared by Roni Bhowmik
  43. 43. SHENYANG AEROSPACE UNIVERSITYRecommendation of the Report:It is not easy to recommend some suggestion toenhance the performance level of the organizationduring three weeks read. I have observed someshortcoming regarding operational and other aspects.On the basis of my observation I would like topresent the following recommendations:Solution: Dell believed that any general economic, business or industry conditions that caused customers or potential customers to reduce or delay their investments in computer systems could have an impact on the companys business. During fiscal 2002, worldwide economic conditions had a negative impact on the demand for Dells products and resulted in declining revenues and earnings compared to the previous year. Dell believed that worldwide economic conditions would improve. Economic conditions continued to worsen, or if they did not improve as rapidly as expected, the companys revenues and earnings could be negatively affected. So Dell must be improving their products. Dells manufacturing process consisted of assembly, functional testing and quality control of computer systems. Testing and quality control processes were also applied to components, parts and sub-assemblies obtained from suppliers. In February 2002, Dell held a portfolio of approximately 730 US patents and 535 pending US patent applications. Dell also had a large number of related foreign patents and patent applications pending. Dells US patents expired in years 2003 through 2020. Dell was developing a portfolio of patents that might be of value in negotiating intellectual property rights with others in the industry. Dell was exposed to a variety of financial risks, including foreign currency, interest rate and stock market fluctuations. Dell had clearly defined policies and procedures to manage these risks. Foreign currency fluctuations could have a negative impact on earnings and cash flows. Dell utilized option contracts and forward contracts to hedge foreign currency exposures. The principal currencies hedged during fiscal 2002 were the British pound,42Prepared by Roni Bhowmik
  44. 44. SHENYANG AEROSPACE UNIVERSITY Japanese yen, Euro and Canadian dollar. Dell monitored its foreign currency exposures to ensure the overall effectiveness of its foreign currency hedge positions. Dell leverages extensive domain experience to ensure that you are well-positioned to comply with the required local and global regulations. Gain insight into your organizations existing processes and technologies and know which additional technologies carry the greatest potential to generate the results you seek with Dell Digital Strategy & Risk Assessment. Dell leverages extensive domain experience to ensure that you are well positioned to fulfil with the required local and global regulations. Downtime and data loss are two of the greatest concerns in business communications. Dell must works with their consumers to assess and manage these and other risks to help prevent the unthinkable. Dell Secure Works has the services and flexibility to address the requirements of every consumer particular security challenge. The computer industry underwent continuous technology improvements. This resulted in the frequent introduction of new products, short product life cycles and continual improvement in product price/performance characteristics in Dell. Customer terminations of or pricing changes in services contracts, or our failure to perform as we anticipate at the time we enter into services contracts. Dell knows that employee first then customer, but Dell has some employee rules problem, in this situation employee tensed their jobs safe or not.Advice: Three words to remember: sincerity, transparency, and consistency. Monitor your online reputation as often as your email Extended warranty for desktops Build your Google reputation now, not later Send blogger’s love letters, not PR pitches Tech support phone Know your Achilles heel, no seriously so you give this chance your consumer Extended warranty for laptops Assume everything will make its way to the web Tech support web site43Prepared by Roni Bhowmik
  45. 45. SHENYANG AEROSPACE UNIVERSITY Create a great online impression; dress to impress Choose your blog voice carefully Hangout at the right social network Ostriches are not great role-models Learn more Social Media Marketing best practices Warranty Repairs Small business is better than home and home office Keep cutting prices to gain market share44Prepared by Roni Bhowmik
  46. 46. SHENYANG AEROSPACE UNIVERSITYConclusion:As one of the largest computer manufacturers in the world, Dell Computer Corporation hasgrown tremendously since its incorporation in 1984. Dell’s Direct Model, which is largelyresponsible for the success of the company, provides a fast, cost-efficient, and customerfriendly means of production and distribution.Dell is no significant decline in economic conditions generally or demand growth specifically,no significant change in product mix patterns, Dell’s ability to realize its pipelineopportunities, no supply chain disruptions, and no significant adverse component pricing orsupply movements. Dell events in future periods may differ materially from those expressedor implied by these forward-looking statements because of a number of risks, uncertaintiesand other factors, including: intense competition; Dell’s cost-cutting measures; Dell’s abilityto effectively manage the growth of its distribution capabilities and add to its product andservices offerings; Dell’s ability to effectively manage periodic product and servicestransitions; weak global economic conditions and instability in financial markets; Dell’sability to generate substantial non-U.S. net revenue; weak economic conditions andadditional regulation affecting Dell’s financial services activities; Dell’s ability to achievefavorable pricing from its vendors; Dell’s ability to deliver consistent quality products andservices; Dell’s reliance on third-party suppliers for product components, including relianceon several single-sourced or limited-sourced suppliers; successful implementation of Dell’sacquisition strategy.Moreover the company should re-consider its outsourcing strategy. Traditionally thecompany outsourced its various components parts from other organization in order to providecompetitive prices to the customer. The strategy was once a very successful, but keeping inview the present market conditions, this eliminates the company differentiation, because theoutsourced firm provides the same component part to other competitors as like Lenovo.The current market trends in the personal computer industry are being driven by everchanging consumer needs, wants, and demands. As a result, companies like Dell ComputerCorporation are forced into a constant state of adaptation in order to satisfy their customers.45Prepared by Roni Bhowmik
  47. 47. SHENYANG AEROSPACE UNIVERSITYReferences: » Annual Report 2000-2010 » Dell Magazine » Dell Google Book » Business Week (Global Business Power Plays) » Power point Lecture sheet by Mr KE WANG » » » » » » » » » » » » » www.maketing91.comDell. (2009). » Dell Computer Corporate Global Strategies. Retrieved March 28, 2010, from Dell Computer Inc: » Dell. (2010). Dell Mission Statement. Retrieved March 27, 2010, from » » » www.scribd.com46Prepared by Roni Bhowmik