Dell SWOT Analysis

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.

References:

http://www.marketwatch.com/investing/stock/dell
http://money.cnn.com/magazines/fortune/fortune500/2010/snapshots/1053.html
http://www.isuppli.com/Home-and-Consumer-Electronics/MarketWatch/Pages/Dell-Climbs-Back-to-No-2-in-Global-PC-Market.aspx
http://money.cnn.com/magazines/fortune/mostadmired/2010/snapshots/1053.html
http://www.scribd.com/doc/2468791/SWOT-Analysis-of-DELL
http://www.freeessays.cc/db/29/mul71.shtml
http://www.quality-assurance-solutions.com/swot-analysis-of-dell.html
http://diogo-dellcomputers.blogspot.com/2007/03/swot-analysis-dell.html

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