Dell Case Analysis

In: Business and Management

Submitted By ruba1r1
Words 7797
Pages 32
Abstract
Company Overview

Michael Dell, who was a student at the University of Texas, decided to establish a computer company with a capital of only $1000. He was following the "direct model" concept where all the products were customized based on the orders and requests of the customers. It is headquartered in Round Rock, Texas but receives nearly half of its revenues from outside the United States.

Dell offers produces and markets a wide range of technology products for the consumer, education, enterprise, and government sectors. In addition to a full line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, Ethernet switches, and peripherals such as displays and projectors. In addition to third-party software and many services such as asset recovery, financing, support and so on.
Strategic analysis summary

This case study analyzes Dell Company from a strategic perspective, which shows that Dell follows a differentiation Strategy.
In the analysis of Internal and External factors; Dell has scored medium on both external and internal factors analysis with scores of (2.78) and (2.56) respectively. Showing good financial position compared to its competitors, the financial analysis revealed that the company was able to enhance and increase its market share and power after the recession especially after 2009.
This study led us to recommend using the QSPM matrix. Dell has to be aware of the price war started by rivals in which competitors charge fewer prices. The company can make alliances with suppliers and/or integrating vertically by producing PDs beans in order to ensure the sustainability of supplying the desired quality.

Strategic and Management Analysis
Business-Level Strategy

Dell was originally founded on a simple "direct-to-consumer" model, which was their differentiation strategy. The idea…...

Similar Documents

Case Analysis - Dell

...strategic position of Dell Inc. Headquarter in Round Rock, Texas; Dell computer was founded in 1984 by Michael Dell who was then an undergraduate student at the University of Texas. From very inception the company is providing superior value to its target market by providing latest technology at competitive prices around the world. Dell is cited as the largest player of the personal computer market. The company follows unique selling policy that is known as Dell Model—selling computers and other equipments directly to customer and build-to-order strategy thereby eliminating the intermediary margins and inventory costs. The mission statement of Dell has been divided into three parts customer satisfaction that states “We are an established company striving to satisfy customers by meeting their demands of quality, responsiveness, and competitive pricing. Each customer is #1” , team satisfaction that states, “Management and employees are committed to cooperating as a team for the purpose of profitability and gratification 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). 1. External Analysis: The primary industry of Dell is personal computer and computer equipments that are evolving with the passage of time due to constant advancement of technology. The dynamic nature of environment offers certain opportunities to Dell while posed certain......

Words: 2774 - Pages: 12

Dell Analysis

...SITUATION ANALYSIS In 1984, at the age of 19, Michael Dell founded Dell Computer with a simple vision and business concept; that personal computers could be built to order and sold directly to customers. Michael Dell believed his approach to PC manufacturing had two advantages: (1) bypassing distributors and retail dealers eliminated the markups of resellers, and (2) building to order greatly reduced the costs and risks associated with carrying large stocks of parts, components, and finished goods. Now, that concept picked up and arrived at Dell being the multi-billion dollar leading computer manufacturer in the world with 2001 revenues reaching $32 Billion and return on investment of 335%. However, things started to plummet by 2001 and Dell experienced, for the first time, a -10% decline in sales and unprecedented cutthroat competition from HP and IBM. Dell Corp. had to make difficult decisions on how to sustain its profitability in light of its broad product portfolio - PCs, workstations, servers and storage products for a broad cross-section of customers in the United States and worldwide. Fueled with ambition and determination, Michael Dell is set to maintain his company's leading position in these tough times. Dell, facing a predicament of whether they should maintain their strategic course or fundamentally change it in order to achieve the targeted growth rates, managed to acquire three important strategic options: 1) Focus only on the four major core products......

Words: 1665 - Pages: 7

Dell Analysis

...CASE STUDY ON Strategic Analysis Of Dell Inc. mujeeb [Pick the date]   Introduction: The purpose of this report is to analyze the strategic position of Dell Inc. Headquarter in Round Rock, Texas; Dell computer was founded in 1984 by Michael Dell who was then an undergraduate student at the University of Texas. From very inception the company is providing superior value to its target market by providing latest technology at competitive prices around the world. Dell is cited as the largest player of the personal computer market. The company follows unique selling policy that is known as Dell Model—selling computers and other equipments directly to customer and build-to-order strategy thereby eliminating the intermediary margins and inventory costs. The mission statement of Dell has been divided into three parts customer satisfaction that states “We are an established company striving to satisfy customers by meeting their demands of quality, responsiveness, and competitive pricing. Each customer is #1” , team satisfaction that states, “Management and employees are committed to cooperating as a team for the purpose of profitability and gratification 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). 1. External Analysis: The primary industry of Dell is personal computer and computer equipments that are evolving with......

Words: 2782 - Pages: 12

Dell Analysis

...Dell Critical Analysis For the longest time, Dell Inc. has been the top, most efficient personal computer maker globally and a strong competitor in the technology industry. A recent shift in the industry’s focus has forced other companies to change accordingly by acquiring new companies and widening their capabilities, while Dell has remained stagnant. The evolved industry requires innovation in multi-technological products and services, incorporating the Internet and mobile devices, in order to stay competitive in the market. Cliff Edwards’ article “Dell’s Extreme Makeover” points out that while Hewlett-Packard, Apple, and IBM successfully adjusted to, and even in some regards initiated, the industry’s progression, Dell has fallen back due to its lack of focus and stubborn tactics. In response, the company reinstated founder Michael Dell as its CEO in January of 2007. Dell, in light of these events, returned to his own company with the attitude of a newcomer, aspiring to completely restructure the business and drastically shift its focus towards flexibility, awareness, and innovativeness. During its flourishing stage, Dell Inc. was largely successful because of its ability to sell customizable computers directly to customers at unbeatable prices. In essence, Dell derived its competitiveness from specialization. However, with the rapidly changing technological industry, what was once Dell’s biggest strength has simply become a limitation in the newly......

Words: 3573 - Pages: 15

Dell Case Analysis

...Dell Computer Corporation designed, manufactured and sold high performance personal computers. Initially it started by upgrading IBM computers then they began to market and sale its own brand. They followed built-to-order model which enabled Dell to have a much smaller working capital requirement compared with its competitor. It also allowed Dell to offer its products at a very competitive price and introduce the new technology more quickly than its competitors. SWOT analysis Strengths * Since the company followed its built-to-order model it did not spend a lot of capital in the business. * Low inventory which allowed the company to have very competitive prices and the introduction of newer technology at 1/3 the time taken by its counterparts. * Since Dell inventory it’s so low, it dramatically reduces the cost of storing inventory, which is part of the Cost of Goods Sold. * The Defects in raw material were easily pick over * High inventory turnover and low inventory days which means low cash conversion cycle. Weaknesses * Large dependence of suppliers * Small compared to its competitors Opportunities * Expansion of business activities due to globalization. * Increasing need of personal computers which will be reflected in an Increment in the demand of personal computers. * Change of the millennium * Adoption of new technology * Internet Threats * Rapid upgrade of new technology * Larger competitors Now I am......

Words: 530 - Pages: 3

Matching Dell Case Analysis

...Matching Dell Outline with General Questions Read the following instructions before proceeding. 1) Write in a continuous, narrative style within each question. Keep section headings. 2) The questions in the outline are to help you analyze the case and develop your own thought. 3) Limit your memo to three pages of text. Diagrams and tables do not count as part of the three pages of text. Do not use bullet points. 4) Double-check your grammar before submission. It matters! 5) Upload your write-up in Word format to WISE. What can we learn from this case? 1) Barriers to imitation (entry): it illustrates how fit among numerous activities, tradeoffs between positions, historical commitments, and threats of retaliation by other players can deter imitation. Interestingly, the retaliation threats come from both immediate rivals and downstream “partners.” 2) Different types of imitation attempts: “Straddling” by Compaq and IBM, “repositioning” by Gateway, and potentially new entry by some members of the channel. 3) The case allows us to quantify Dell’s cost advantage and estimate the portion of that advantage which is threatened by the imitation attempts of others. 1. Environment a. Threat of New Entrants: It is low. Because high technology industry is highly competitive with continuing developments. Costumers are more likely to purchase on famous brands and be loyal to those familiar brands. So......

Words: 1043 - Pages: 5

Dell Case Analysis

...Tables 1. Table 1: Summary of Multiple Regression Analysis of Variables Related to Retention Status- Grade 4............................................................................................................... 14 2. Table 2: Classification of Cases by Retention Prediction Model- Grade 4................ 16 3. Table 3: Odds Ratios and Percent Increase in Probability of Retention- Grade 4...... 17 4. Table 4: Summary of Multiple Regression Analysis of Variables Related to Retention Status- Grade 5............................................................................................................... 18 5. Table 5: Classification of Cases by Retention Prediction Model- Grade 5................ 21 6. Table 6: Odds Ratios and Percent Increase in Probability of Retention- Grade 5...... 21 7. Table 7: Summary of Multiple Regression Analysis of Variables Related to Retention Status- Grade 6............................................................................................................... 23 8. Table 8: Classification of Cases by Retention Prediction Model- Grade 6................ 26 9. Table 9: Odds Ratios and Percent Increase in Probability of Retention- Grade 6...... 26 10. Table 10: Summary of Multiple Regression Analysis of Variables Related to Retention Status- Grade 7................................................................................................ 28 11. Table 11: Classification of Cases by Retention Prediction Model- Grade 7..............

Words: 4529 - Pages: 19

Dell Case

...First Case Confidential 1. A. Because the developing of company is very fast, the company does not use an appropriate way to change it’s accounting rule. The company does not accurately reflect its business store and liability. The company can use some accounting rule to correct these mistakes, such as revenue recognition, amortization of revenue and vendor reimbursement agreements. B. There are some honest mistakes to record some transactions, because it is difficult to track very detail things and orders. There are no evidences to show that the recording of transection is unappropriated. C. If the error is material, it should be disclosed. But not all of errors are material. 2. A. The consistency provided by the rules described in this case is worth to comply in the company. Because it can provide an accurate and completed information to the company. But Dell Company is hardly to follow these rules for Dell company’s size. If company want follow these rules, the cost will be too high. B. Because there are a lot of transaction in Dell Company, Dell Company more likely to use GAAP rules. Because IFRS is more detailed then GAAP, Dell Company not requires tracing every transaction detail. C. The GAAP rule is more appropriate to investment manager. GAAP are imposed on company. Investors can get a minimum level of consistency in the financial statements, when they analyze the investment purpose of company. Therefor investors more trust GAAP. 3. Dell......

Words: 390 - Pages: 2

Case of Dell

...SCHOOL OF BUSINESS STANFORD UNIVERSITY CASE NUMBER: EC-17 November 2000 DELL DIRECT1 In 1995, a manager from a leading Japanese computer company was recounting his company’s plans to conquer the US Personal Computer (PC) market: “We have a strong brand name in consumer electronics, and what’s most important, we build many of the components that are needed in the PC ourselves: monitors, audio equipment, CD-ROM, DRAM, and so on. This will give us a tremendous advantage over American competitors, who have to buy everything outside” [1]. Several years later, it looks like the competitive weapon of this and other Japanese electronics giants had misfired. Hitachi, Sony and Fujitsu have spent vast resources trying to crack the US PC market, but had only captured a marginal share—and they had lost money doing it. At the same time, Texas-based Dell Computer Corporation, founded by 19-year-old Michael Dell in a university dormitory room, was growing rapidly, sustaining a much larger portion of the PC market than all Japanese vendors combined. And while the Japanese PC manufacturers were unable to earn any money in the US market, Dell, which produces no PC components, was highly profitable, grew by more than 50% each year over the 1995-1998 period, and saw its stock grow about 30,000% in a decade (see Exhibit 1 for Dell financial summary). Dell does not manufacture any components, but it can produce custom-built PCs in a matter of hours. How does Dell do it? Why did it succeed......

Words: 9040 - Pages: 37

Dell Case Analysis

...Introduction Dell Computer Corporation was founded in 1984 by Michael Dell in his dorm room at the University of Texas. In 2003, the company name was changed to Dell Inc. to reflect evolution of it from a computer manufacturer to a company that provides a wide range of technology related services. Dell Inc., now an American privately owned multinational company, became successful by providing quality inexpensive computer products than its competitors and grew to be the number one in the world (Exhibit 1) by implementation of its Direct Model. While competitors sold primarily through distributors, resellers and retailers, Dell directly took specified orders from customers through its established website and telephone lines, built and shipped devices to customers. Dell’s success started when its revenue surfaced $80,000 per month in 1984, and its ever growing revenue to billions of dollars, shares price and domination of PC market and standards until its defeat by Wlett-Packard (HP) in 2007. The ever falling of Dell’s shares price eventually made Michael Dell to buy back Dell’s shares in order to be able to restructure its legacy PC business one day. Company’s Current Strategy Dell Inc. pursues a focused differentiation strategy by offering premium quality products and devices and the best possible before and after sales customer service in a very timely manner. Dell believes it has the most efficient business model in the fierce competitive PC making industry. The......

Words: 1790 - Pages: 8

Dell Case

...Dell Case Study 1. What has made Dell successful to date? * Successful driver: 84% of orders and shipped within 8hrs, 5days inventory, reduced vendor from 200-25, internet created supply side efficiency, lower operating cost 1. Economic Condition: * The millennium effect * Strategic decision to leave the retail channel to directly interact with customers helped the mass customisation as well as the preserve of the profit margin * Followed the trend that Intel & Microsoft shaped * International geographic expansion 2. R&D, Logistics & Production: * Virtual integration with suppliers * Followed (progressively for this era) Just-in-time logistics reducing inventory costs, shortening the sell cycle. * Good MRP production cut cost of storage, shorten the supply line * Customization product to follow customers’ particular needs as much as possible (build to order system) * Built production plant in different countries to reduce cost for its international geographic expansion 3. Marketing & Sales: * Direct channel model: reduced cost of middle channels, aimed at the high velocity, and distributed value and provided capable opportunity for cross selling and up selling. (good performance on retaining this customer segment) * Flexible online channel store that contributed to up selling & cross selling by complementing the physical direct channel * Efficient multichannel customer......

Words: 867 - Pages: 4

Dell Case

...Dell Computer Corporation Dell Computer Corporation since its arrival in the computer manufacturing business has been following the “Direct Model” that has helped it to leverage its position as a leading manufacturer of PCs. When Dell entered the PC manufacturing industry there were already established competitors like IBM, HP, COMPAQ, Gateway and Apple.IBM was the pioneer with respect to technical standards in the PC industry and also had an open architecture allowing developers to build applications suitable for running on the IBM machines. The industry was rallying around the standards set by IBM and all major players in the industry had IBM clone machines except for Apple which was using alternative standards and had its own proprietary architecture. The major players had strong sales force teams and dealer networks .So the PC industry had a lot of competition and there was very less opportunity for any substantial growth in the industry. Because of presence of so many competitors in the industry price wars were common and locking in customers could only be done by providing them with a cost effective solution. Also the PC manufacturing industry had two prominent suppliers for the microprocessor (Intel) and the operating system (Microsoft) ,the two most important things required in building a PC. Even though Intel made the microprocessor available to purchasers at a standard price it rationed new products to PC makers based on the proportion of their previous......

Words: 2182 - Pages: 9

Dell Case

...Introduction and Company background The purpose of this case study is to analyze the new product scenario and provide a written report. Dell Computers was founded by Michael Dell in 1984 and has its head offices in Round Rock, Texas. (Benedetto, 2012, p. 165) Michael Dell has a very simply philosophy, selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations. (Dell Inc. - Company Profile, Information, Business Description, History, Background Information on Dell Inc., 2012) Michael Dell started his company while he was still in College in 1984. The premise was to buy IBM parts wholesale and assemble computers and sell them for less money than the competitors were selling theirs for. Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year. (Dell Inc. - Company Profile, Information, Business Description, History, Background Information on Dell Inc., 2012) Dell soon realized that he could not keep up with the explosive growth of the company and hired Tandy Corporations marketing executive team to run things. Tandy was a competitor at the time. Dell has experienced a very nice trajectory through the 90’s and projection over the next 5 years show a 47% increase in the......

Words: 867 - Pages: 4

Dell Case

...financial health is in a good place. One the other hand, it could indicate that there is too much inventory. In this case, the inventory is never kept at a high volume, so we can say that the increase in working capital is a good thing. Now, we need to look at the percentage change for each current asset and each current liability in comparison with the increase in the working capital trend. We may notice that each one plays a part in it. One asset that may stick out more than any of the others is the percentage change in inventory. If we take a look at Table 2, we will notice that, for the most part, the percentage change decreased from 1995 to 1996 compared to 1994 to 1995. For inventories, this percentage jumped from 33.18% to 46.42%. This big of a jump may send up some red flags since Dell does not want to hold too much inventory, but that is not want we want to take away from this. In this short time frame, Dell has grown significantly from the previous years. Since Dell is in the growth stage it is not something that should send up red flags. It should be looked at as a good thing because it means that the company is gaining business, which results in needing some more inventories. Dell has been able to finance its own rapid growth internally by its effective use of working capital and profitability throughout the years. This working capital policy has given Dell a tremendous competitive advantage over its competitors. For example, Dell’s working capital policy does a......

Words: 527 - Pages: 3

Case Analysis 1: Sara Lee vs Dell vs Jcpenney

...Case Analysis 1: Sara Lee vs Dell vs JCPenney With the advance of technology and the development of society, the competition in industry is increasing intense. If there is no any innovation and just standstill for a company, it will be out of business quickly and be replaced by other competitors. Under this condition, every company wants to make wise strategy to gain profits and strength their competitiveness in the industry. Information technology plays an important role when companies develop strategy. Overview of the problems each company is facing For Sara Lee Bakery Group (SLBG), they delivered fresh-baked goods to their retailers directly. The delivery people needed to count at the retailer’s back door. But, these retailers wanted to reduce labor cost, they reduced the number of hours their back door is open. So, for SLBG, they need more trucks, more time to accommodate the limited door open time. Obviously, it will increase large amount of cost to do this. For Dell, Dell has a short delivery cycle after received customer’s order. Dell has a demand-pull value chain and it could decrease cost by not make too much computer ahead of schedule. However, HP’s local store availability and develops a number of unique features that are highly demanded by customers help HP to fight Dell for the top position successfully. For JCPenney, there was about 10% money they spend, half billion dollar goes transaction. The CEO of JCPenney thought this part of money could use to......

Words: 1818 - Pages: 8

حلقة 14 برنامج الصدمة الجزء الثالث الحلقة 14 2018 HDTv برنامج الصدمة الجزء الثالث الحلقة 14 توك شو مشاهدة وتحميل برنامج الصدمة 3 الموسم الثالث 2018 HD اون لاين وتحميل مباشر برنامج,الصدمة,الجزء,الثالث,الحلقة 14 | #militaria | Programas de Tv