Dell SWOT Analysis

{ Posted on Dec 28 2010 by Chakar Rind | 8,796 views}

This is the SWOT Analysis on Dell written after referring to multiple resources. Please refer to below article for strengths, weaknesses, opportunities and threats of Dell.

Dell Inc. a Delaware Corp., listed in NASDAQ as DELL, was founded in 1984. The company offers a variety of product categories that consists of mostly mobility products, desktop PCs, software and peripherals, servers and networking, and storage. The firm’s services include a broad range of configurable IT and business related services that also includes infrastructure technology, consulting and applications, and business processes. The four global business segments of the firm are: Large Enterprise, Public, Small and Medium Business, and Consumer. It designs, develops, markets, sells, and supports a wide variety of products and services for the PC market that can be customized to individual customer requirements.

Dell Strengths

• Ranked as the 2nd largest PC maker globally (2010).

• Renowned for its custom made computers, satisfying the customer needs specifically.

• Ranked as 38 in fortune 500 (2010).

• Ranked as 5 in Fortune 500 Most Admired Companies in the computer industry (2010).

• It cuts off the wholesalers as well as the retailers and engages the customers directly, offering the exact configuration the customer wants.

• Information and CRM (customer relationship management) are used intensely for data retention of its potential customers.

• Suppliers are in strong terms with the firm.

• Assembly line marks the core competency.

• Delivery status can be tracked.

• Centralized command regarding the supply-chain.

• Finished products are delivered through courier (also flown to other countries).

• Dell model (business model) is the most efficient supply chain model in the industry, and it has also maintained a strong financial position through-out.

• It offers performance PCs that are powerful and configured at competitive prices.

• Reliability and support service are tailored to satisfy the customer to the optimum level.

• Dell launches newer technology far more before the other companies that hold inventories.

• Turnover inventory is an average of 6 days.

• There is no inventory buildup.

• Efficient in saving cost.

• Customization in accordance to their clients regarding the computers, core competency of the firm.

• Leading seller on the internet in the computer industry.

• History of holding strong acquisitions and mergers (Perot Systems 2009, Alienware 2006).

• Michael Dell, longest tenured CEO, is a strong and vital asset to the company regarding his experience, and management and leadership skills.

• Innovative regarding its E-Commerce and Supply Chain Management.

• Largest firm in Austin, 2nd biggest corporation in Texas (non-oil), and 5th largest in terms of revenue.

• They use JIT (just-in-time) approach.

Dell Weaknesses

• The firm having such a large range of components from a range of suppliers in different countries that there may be trouble regarding occasional distress.

• It is dependant on large suppliers for being an assembler rather than a computer tech manufacturer.

• Product/Component recall in such a position can be troublesome for the firm.

• Quality issues regarding the suppliers.

• Do not have proprietary technology to offer the market.

• Weak relations with other retailers.

• Continuous process improvement at the end of the customer is required for better performance.

• No physical distribution channels and troubleshooting centers.

• No diversification regarding technology, only regard the PC business.

• Leadership and management revolve around only on one person.

Dell Opportunities

• New blood regarding the management can lead to better business propositions.

• Diversification in peripherals and also in non computing items such as LCD TVs, it can compete in a whole new angle.

• It makes low-cost/ low-price computers for PC retailers (refurbished), although not Dell products, but still is an opportunity for the firm to tackle a low level market penetration.

• It should also propose its business regarding the students due to the high level of reliability of students on PCs in the modern technological era.

• European market and Asian markets that are merging to be compatible in the technological market are scopes that Dell should consider.

• It should have a physical presence in the market as well for supporting troubleshooting and customer support services.

• Diversification in sections such as security devices, security softwares are few of the fastest growing need of the customers in the industry.

Dell Threats

• The competitive rivalry in the industry is very intense globally, and due to the changing technological developments, new entrants are a direct threat in this case.

• Changes in the currency rates can pose a potential lose for the firm, as the order takes place ahead of the time of delivery.

• The competition can also start designing custom made product as per customer requirement, and most of the companies in competition are computer makers rather than assemblers.

• Lower prices of the competitors are a direct threat to the firm due to the price conscious consumer base of the firm.

• Strong competitors like Hewlett Packard, Acer, Intel, IBM.

• Political instability, government regulations and tariffs cause discrepancies in developing countries, for the firm.


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