Running head: STRATEGIC PLAN PROJECT FOR DELL 1
STRATEGIC PLAN PROJECT FOR DELL 17
Strategy Plan Project for Dell
Name:
Institution:
Date: June 7, 2015
Dell Strategic Plan
Dell is a private multinational company that deals with the manufacture of personal computer technologies. It was founded in 1984 and currently has its headquarters in Round Rock, Texas in the United States (Dell & Fredman, 1999). This strategic plan will analyze various internal and external environment factors affecting the company.
Mission statement
The Dell mission statement reads; “our mission is to be the most successful IT Company in the world by delivering the best customer experience in all the markets we serve. In doing so, Dell will meet customer expectations of highest quality, leading technology, competitive pricing, individual and company accountability, best-in-class service and support, flexible customization capability, and superior corporate citizenship”(Dell, 2015). The mission statement is focused on acquiring customer loyalty through high value creation.
Proposal for updated mission: the mission statement above needs to be updated so as to capture more values of the company. Currently, the mission is just focused on customer relations. Whereas Dell has a separate corporate social responsibility statement, this should be captured in the mission statement as it represents the core values and beliefs of the company. The statement should capture the company’s commitment towards environmental sustainability and its role in promoting the local communities.
Vision statement
Dell’s vision statement reads; “it’s the way we do business. It is the way we interact with the community. It is the way we interpret the world around us- our customers’ needs, our future technology, and global business climate. Whatever changes the future may bring. Dell vision will be out guide focus” (Dell, 2015). This vision is focused on customer satisfaction and introduces some aspect of the company’s responsibility towards the community.
Proposal for updated vision: a vision statement is a reflection of a company’s future ambitions or its desired future outlook (Roberts, 1996). The Dell vision statement captures this aspect effectively. There is however one thing that lacks in Dell’s vision: an ambition for market leadership. The vision should have a statement on how the company wishes to grow into a leader in the technology industry.
External factor evaluation matrix (EFE)
External factor
Weight
Rating
Weighted score
Comments
Opportunities
Strong market position and global presence of the company
0.30
4
0.52
Dell has maintained a global outlook despite challenges including the recent economic crisis of 2008
Introduction of new products and services
0.07
4
0.31
Dell is currently introducing new models of .
MARGINALIZATION (Different learners in Marginalized Group
Running head STRATEGIC PLAN PROJECT FOR DELL .docx
1. Running head: STRATEGIC PLAN PROJECT FOR DELL
1
STRATEGIC PLAN PROJECT FOR DELL
17
Strategy Plan Project for Dell
Name:
Institution:
Date: June 7, 2015
Dell Strategic Plan
2. Dell is a private multinational company that deals with the
manufacture of personal computer technologies. It was founded
in 1984 and currently has its headquarters in Round Rock,
Texas in the United States (Dell & Fredman, 1999). This
strategic plan will analyze various internal and external
environment factors affecting the company.
Mission statement
The Dell mission statement reads; “our mission is to be the most
successful IT Company in the world by delivering the best
customer experience in all the markets we serve. In doing so,
Dell will meet customer expectations of highest quality, leading
technology, competitive pricing, individual and company
accountability, best-in-class service and support, flexible
customization capability, and superior corporate
citizenship”(Dell, 2015). The mission statement is focused on
acquiring customer loyalty through high value creation.
Proposal for updated mission: the mission statement above
needs to be updated so as to capture more values of the
company. Currently, the mission is just focused on customer
relations. Whereas Dell has a separate corporate social
responsibility statement, this should be captured in the mission
statement as it represents the core values and beliefs of the
company. The statement should capture the company’s
commitment towards environmental sustainability and its role in
promoting the local communities.
Vision statement
Dell’s vision statement reads; “it’s the way we do business. It is
the way we interact with the community. It is the way we
interpret the world around us- our customers’ needs, our future
technology, and global business climate. Whatever changes the
future may bring. Dell vision will be out guide focus” (Dell,
2015). This vision is focused on customer satisfaction and
introduces some aspect of the company’s responsibility towards
the community.
Proposal for updated vision: a vision statement is a reflection
of a company’s future ambitions or its desired future outlook
3. (Roberts, 1996). The Dell vision statement captures this aspect
effectively. There is however one thing that lacks in Dell’s
vision: an ambition for market leadership. The vision should
have a statement on how the company wishes to grow into a
leader in the technology industry.
External factor evaluation matrix (EFE)
External factor
Weight
Rating
Weighted score
Comments
Opportunities
Strong market position and global presence of the company
0.30
4
0.52
Dell has maintained a global outlook despite challenges
including the recent economic crisis of 2008
Introduction of new products and services
0.07
4
0.31
Dell is currently introducing new models of its personal
computers and venturing into more diversified product lines. It
now produces printers, laptops, and personal computers,
Effective customer service
0.07
4
0.32
Dell has an effective customer service that has won awards in
the past. The company often takes into consideration customer
feedback on several aspects like product reliability,
customization and fast-service delivery.
Cost leadership
0.10
4
4. 0.58
The company’s products still remain cheaper than those of
major competitors like Apple and HP.
Internet support and e-commerce
0.09
2
0.67
The company’s processes are based on strong internet
integration. These processes include procurement, customer
support, and marketing.
Threats
Slow growth rate
0.08
3
0.37
The intense competition within the global markets has slowed
down the growth of Dell.
Very dynamic market
0.12
4
0.23
The technology market experiences rapid changes. New models
of the personal computers are designed annually by the different
competing companies.
Trade barriers
0.09
2
0.42
The company is finding it difficult to deal with trade barriers
existing in some countries. These barriers include price controls
and high import levies.
New customers’ perceptions
0.08
1
0.16
Most new customers, especially the youth, are not attracted to
5. dell products. Most of the prefer apple products.
Total
1.00
3.58
Porter’s 5-factor forces analysis
The Porter 5-factor forces analysis is an evaluation of five
aspects that influence a company’s competition. These are
threats that a company faces from new entrants, substitute
goods, rival competitors, bargaining power of customers and the
bargaining power of suppliers (Hill & Jones, 1998).
a) Threat of new entrants.
The computer technology industry is currently dominated by 5
major competing companies. These are Dell, Apple, Acer,
Hewlett and Packard (HP), and Toshiba. Other smaller
competitors also exist and include Sony, Lenovo, and Samsung.
The industry is hence established and any new entrant would not
pose much threat (Paroutis, Heracleous & Angwin, 2013). This
is because the industry has some major entry barriers such as
high start-up costs and high level of innovation required in the
industry. The threat of new entrants is hence very weak.
b) Bargaining power of suppliers
Dell deals with hardware, software, and service suppliers. There
are several suppliers who compete to supply services and
products within the industry. Computer companies therefore
find it easier to bargain for the products and services of the
suppliers. The only dominant supplier in the industry is Intel,
which supplies 80 percent of the microprocessor, hence has a
large bargaining power in the supply of microprocessors.
Overall, Dell has control over most of its suppliers’ bargaining
power since the suppliers compete against each other. The
threat of bargaining power of suppliers is hence moderate.
c) Bargaining power of buyers.
The personal computers industry is experiencing a lot of
6. competition in creation of diverse services and products.
Customers hence have a variety of products and services to
choose from. Dell uses a direct model of marketing to reduce
cost of its products (Dell & Fredman, 1999). Most customers
often view most products as being same, hence use prices as the
primary choice factor. The threat of bargaining power of
customers is hence strong.
d) Rivalry among existing firms.
Dell faces a lot of competition from HP, Toshiba, Acer, and
Apple. All the companies have global markets hence they
compete fiercely. Dell has lost most of the United States’
domestic market to Apple Inc. hence is focusing in developing
markets like Asia and Africa. Some companies like Compaq
exited the market by merging with HP due to the strong
competition. The threat of competition from industry rivals is
hence strong.
e) Threat of substitutes
Dell and the personal computers’ industry at large, is facing
treat from substitute products. The main substitute goods that
pose a threat are smartphones and tablets that are manufactured
by mobile phone companies like Apple, Samsung, and HTC.
These products offer services that were initially offered
exclusively by computers. The threat of substitutes is therefore
strong.
Internal factor evaluation
Factor
Weight
Rating
Weight score
Strengths
Creation of recycling program.
0.07
3
0.21
Expansion to Asian countries like India and China.
0.09
7. 4
0.32
Privatization of Dell in 2013
0.25
3
0.52
Customization of products
0.12
3
0.32
Weaknesses
Low investment in research and development
0.20
1
0.15
Price wars
0.12
2
0.18
High debt to income ratio
0.15
1
0.36
Total
1.00
2.06
SWOT Matrix
Strengths
a) Creation of global recycling program.
b) The client reinvention strategy that was introduced in 2011
has enabled the company to improve the customer loyalty.
c) Dell’s focus on customization of products.
Weaknesses
8. a) Existing price wars with competitors
b) High debt to income ration
c) High manufacturer dependency
Opportunities
a) Strong market position
b) Cost leadership
c) Improving technologies and use of internet
Threats
a) Competition from Apple, Acer, Toshiba, HP, and IBM.
b) Trade barriers in most countries
c) Low growth rate
BCG matrix
The BCG matrix is used to categorize a company based on its
financial capability and the market share it has. Dell is
considered to lie under the cash cow portfolio. This is because
Dell has a large global market share and operates within an
industry that has already stabilized in terms of growth. The
industry no longer has many new entrants hence it is matured
(Daft, 2006).
IE (internal-external) matrix
The IE matrix will be the most appropriate strategic direction
that should be used by dell. The IE matrix focuses on the
internal and external factors highlighted in the SWOT analysis
as well as the IFE and EFE. The matrix specifically makes use
of the internal and external factor evaluations to seek the best
strategy that should be adopted by the company. According to
the analysis provided earlier, Dell has an IFE of 2.06 and an
EFE of 3.58. The company can hence be categorized to lie on
the cell II of the IE matrix. The IE matrix is necessary in Dell’s
case since the company is struggling with most threats from its
competitors and other external forces (Rao, Rao &
Sivaramakrishna, 2008).
9. Strategy Formulation
Dell has been operational for over two decades but still has
not expanded as one would expect. It is part of this strategic
plan to advice on the possibilities of the expansion. The first
thing to consider in the strategy formulation is providing
rational planning (Andrews et al., 2009). It should impact
positively on management processes in the enterprise. Most
research shows that rational planning is optimum when the
external environment is unstable (Mittal & Jain, 2012).
Therefore, Dell should be able to grow and increase service
delivery in terms of opening new branches to serve many
people.
Second, parameter for Dell strategy formulation is logical
increment. This move ensures that the enterprise gives the best
quality service. Designing a logical increment strategy is
significant because the business will not adapt political aspects
of strategy making. Such decisions may fail to achieve the goal
put in place (Andrews et al., 2009). More so, when an
organization uses broad goals for projection, the chances of
increased consultation with the stakeholders may make the
process difficult for the formulation. Therefore, Dell should
have a specific goal of developing quality hardware and
software for its customers.
Availability of a comprehensive framework is the next
parameter that Dell should follow to achieve its goal. According
to Mittal and Jain (2012), a proper framework will facilitate the
organization to predict financial aspects. Also, this design can
provide a perfect organizational chart that will show the chain
of authority. In that regard, no officer will have overlapping
duties that may result in failure of the clinic’s projects. The
chain of command that is on the chart should be easy to
understand so that duties within the clinic are easily discharged
with the responsible office. This working plan will enable the
organization to save time and reduce supervisory needs of the
10. organization because there would be a clear outlay of duties.
Strategy Implementation
The organization has set goals that the Dell fraternity
needs to realize in a three-year plan. The first and the greatest
plan is to expand to fresh external markets especially in Asia,
North and Central Africa. Products from Dell can find an easier
market penetration in these regions because the current
competition in the US and European countries is so stiff. The
company should establish a market research team because as
Valos and Bednall (2010) explain the action can act as a
marketing strategy and can profoundly increase the
competitiveness of the firm. Also, the company should open a
new line of product such as a smartphone so as to have a market
share of these products.
Dell should be sure to have all trained employees in this three-
year period. This move will enable improved service delivery,
efficiency in procurement, and customer relations. As such, the
firm will link a business with professional training institution to
achieve the projections. Also, the enterprise should revise the
organizational chart. The action will enable the management to
have an efficient control system (Campbell, 2012). The current
chart places the Managing Director at the top, but at the same
time, he is answerable to the CEO of the company. All the six
departments available report to the Managing Director. The
department heads have subordinates who report to them.
The new chart seeks to change the flow of authority. The CEO
will remain the active overseer of the organization. The
Managing Director will have a general manager reporting to
him. Functional managers (new positions) of various
departments will report to the general manager. Each functional
manager will have an assistant who will help to coordinate
activities of the subordinates. The steps that will make this
successful are through promotions of current workers to various
posts based on their merit. Also, the organization will outsource
workers to fill the gaps through the available procedures of
11. hiring.
Organizational chart
CEO
Managing Director
Marketing Manager
Sales Manager
Human Resource Manager
Procurement Manager
Research Manager
Safety Manager
Deputy Procurement Manager
Deputy Sales Manager
Deputy Research Manager
Deputy HRM
Deputy Marketing Manager
Deputy Safety manager
The organizational product positioning is primarily through
effective product promotion that will aim at reaching the
12. youthful generation and companies that need computer
installation. This group is the main consumer of Dell’s
products. The stakeholders are interested in the income balances
of the enterprise before and after implementation. This is how
the data is projected for the three years’ experience.
Product placement strategy
Market Research
Product Position Reach for customers
· (Youths, companies, etc…)
Identify channel of distribution
Dell Company Income Statement (Before implementation)
As at the end of 2013
INCOME
Revenue:
From Government $ 10,000
Goods and services
1,880,000
Additional revenues
260,000
Total revenue
2,150,000
13. Gains:
Foreign exchange $ 120,000
Additional gains 480,000
600,000
Gross income
2,750,000
Expense:
Suppliers $ 230,000
Employees 450,000
Expenses 45,000
Machine repair 38,900
(763,900)
Net income
1,986,100
Dell Company Income Statement (After implementation) after
the 3 year
INCOME
Revenue:
From Government $
19,000
Goods and services
4,500,000
Additional revenues
1,560,000
Total revenue
6,079,000
Gains:
Foreign exchange $ 3,120,000
Additional gains 780,000
3,900,000
Gross income
9,979,000
Expense:
14. Suppliers $ 530,000
Employees 800,000
Expenses 90,000
Machine repair 1,100,900
2,529,900
Net income
7,458,100
Dell Company balance sheet
As at the end of 2013
Dr.
Cr.
FIXED ASSETS
Premises $ 500,000
Machinery 300,000
Furniture/ Fittings 150,000
950,000
CURRENT ASSETS
Stock 700,000
Bank 140,000
Cash 200.000
Debtors 30,000 1,000,070
2,000,020
Capital 1,500,000
CURRENT LIABILITIES
Creditors 110,000
Bank overdraft 50,000
Short term loan 150,000 310,000
LONGTERM LIABIL
Mortgage 140,000
Long term loan 70,000 210,000
2,000.020
Assessment of the present value
15. From the above data of the balance sheet, one can see the
company is at position prone to financial crisis. The amount
owed to the creditors is higher than that of debtors with an
excess of $ 80,000 hence we can ascertain more outflows than
inflows. The level of stock is low. As such, the business should
act faster to implement the plan so as more production can
provide a substantial amount of stock. Lastly, the cash at bank
and cash in hand should be reimbursed inform of savings that
will enable plugging back of the funds during development
projects.
In terms of what is worth in the market today, it is
significant to maintain the high level of innovation of the staff
so they can produce products that meet the competitive
standards of the market. Also, the trading partners of the
organization such as the suppliers must be retained to maintain
a harmony environment for the business.
Strategy Evaluation
Strengths
The management of Dell ascertains that the expansion
move will capture more clients willing to trade with the
company. Training of employees will correct Dell’s weaknesses
to strengths because the ability to communicate with customers
and overall efficiency will improve. The company projects
increase in the revenue. Dell will have a great market share in
the growing markets only if implementation is timely. Increase
in market share would help grow the company’s revenues and
profitability which will enhance shareholders’ investments.
Weaknesses
The company predicts price wars. Also, the business
policies in the new markets are not to the advantage of the
organization. Lastly, there is high debt to income ratio to meet
the costs. As a result of the high debt ratio, the company may
fail to meet all its future obligations that lead to going concern
threats.
Evaluation Starts here!!!
16. References
Andrews, R., Boyne, G. A., Law, J., & Walker, R. M. (2009).
Strategy Formulation, Strategy Content and Performance.
Public Management Review, 11(1), 1-22.
doi:10.1080/14719030802489989
Campbell, D. (2012). Employee Selection as a Control System.
Journal of Accounting Research, 50(4), 931-966.
doi:10.1111/j.1475-679X.2012.00457.x
Mittal, A., & Jain, P. (2012). Mergers and Acquisitions
Performance System: Integrated Framework for Strategy
Formulation and Execution Using Flexible Strategy Game-Card.
Global Journal Of Flexible Systems Management, 13(1),
41-56. doi:10.1007/s40171- 012-0004-7
Daft, R. L. (2006). The new era of management. Mason, Ohio:
Thomson/South-Western.
David, F. R. (2013). Strategic management concepts and cases:
A competitive advantage approach (14e). United States of
America: Pearson Education Inc.
Dell, M., & Fredman, C. (1999). Direct from Dell: Strategies
that revolutionized an industry. New York: Harper Business.
Dell. (2015). Retrieved on 4/28/2015 from:
http://www.dell.com/learn/us/en/vn/purpose-and values
Hill, C. W. L., & Jones, G. R. (1998). Strategic management
theory: An integrated approach. Boston, MA: Houghton
Mifflin.
Paroutis, S., Heracleous, L. T., & Angwin, D. (2013). Practicing
strategy: Text and cases. London: SAGE.
Rao, C. A., Rao, B. P., & Sivaramakrishna, K. (2008). Strategic
17. management and businesspolicy: Texts and cases. New Delhi,
India: Excel.
Roberts, S. (1996). The business of personal training.
Champaign, Ill: Human Kinetics.
Valos, M. J., &Bednall, D. B. (2010). The alignment of market
research with business strategy and CRM. Journal Of
Strategic Marketing, 18(3), 187-199.
Strategic Plan Project - Strategy Evaluation Draft
OVERVIEW
This assignment will ask you to develop a 3-year strategic plan
for an organization with which you are affiliated. It could be
your place of employment, a volunteer organization, a sports
team, a religious organization, or even your child’s day care
facility (company is Dell Company) the assignment will ask you
to develop your strategy in three phases: strategy formulation,
strategy implementation, and strategy evaluation.
DESCRIPTION
This assignment is designed to expose you to the complexity of
a strategic plan, and the measures required for properly
implementing and evaluating a plan. It will allow you to:
Expand your knowledge of strategic planning within an
organization.
18. Develop your ability to use strategic planning tools.
Contribute to your ability to assess the strategic directions and
plans for an organization with which you are affiliated.
*The formulation and implementation step already done, all you
have to do strategy evaluation of Dell Company using
attachment I am providing just doing following elements:
Strategy Evaluation Draft
Prepare a draft document that includes the following:
1. Auditing Plan/Balanced Scorecard that will define how
objectives are going to be tracked over the next three years.
2. Contingency plan that outlines what steps can be taken to
address unforeseen changes to internal or external environments
over the coming three years.
In balance scorecard you should have following items:
Area of Objectives
Measure or Target
Time Expectation
Primary Responsibility