Dell /Year| Net Revenue($B)| Net Income($B)| ROA(%)| ROE(%)| 2008| 61.133| 2.947| 10.69| 78.90|
2009| 61.101| 2.478| 9.35| 58.01|
2010| 52.902| 1.433| 4.26| 25.40|
2011| 61.494| 2.635| 6.83| 33.92|
2012| 62.071| 3.492| 7.84| 39.16|
2. Dell Inc. share prices from 1998 to 2013.
Forecast Earnings Growth
According to the graph above, over the next five years, the analysts that follow Dell, are expecting it to grow earnings at an average annual rate of 1.96%. This year, analysts are forecasting earnings decrease of 19.82% over last year. Analysts expect earnings growth next year of -2.88% over this year’s forecasted earnings. Thus, based on this information and the first chart, considering that stock price did not have such a very high variation after the recession of 2008-2009, it is not expected such a great difference on the performance of Dell at the end of the next five years.
3. Major root cause of the Dell’s recent setback and the particular performance that might have avoided the problem. The main cause of Dell’s setback was the priority strategies with short-term results. Furthermore, after an investigation, the company found out that some managers falsified quarterly results to meet sales targets from 2003 to 2006. The performance evaluation tool called MBWA (Management by walking around) could be used to track how well the strategy execution were going, talking with different people at many different levels such as speaking with those managers and employees for deciding whether to continue or change the company’s vision, objectives, strategy and /or strategy execution methods. It would be a way to evaluate the company’s progress and making corrective adjustments in order to avoid Dell’s problem.
4. Three distinct ways in which Dell’s business strategy is implemented and how each of these ways contributes to the company’s low cost structure. 1) Dell sells its products direct to its customers. It is an efficient technique to grow sales, eliminating wholesalers and retail dealers that impede Dell’s understanding of customer needs and consequently unnecessary costs. 2) An efficient supply chain with standardized technologies in all product offerings contributes for a low cost structure where cost savings can be distributed along to customers in the form of low prices. 3) Dell makes partnership with reputable suppliers of PC parts and components and stay with them as long as they maintain their leadership in low cost manufacturing and high technology and quality. The long term partnerships allow Dell to work with its suppliers, for instance, to minimize the number of different stock-keeping units of parts and components in its products and consequently identify ways to reduce costs.
5. Revenue by Product and Services Categories of the fiscal year 2012.
Revenue by Product and Services Categories/2012| % of Revenue Contribution| Servers and networking| 13.43|
Software and peripherals| 16.47|
Desktop PCs| 22.78|
6. Net Revenue and Operating Income by Reportable Global Segments of 2012. Segments of Operating Income / 2012| Revenue Contributions ($B)| Large Enterprise| 18.4|
Small and Medium Business| 15.1|
7. Why did Dell enter the printer Market?
In order to achieve a more profitable and consolidated brand and influence the sales of its products, Dell decided to create his own line of printer and offer a complete line of products including printers, computers and peripherals. For example, it is more convenient when customers receive both computer and printer at the same time. For that, Dell bought the Lexmark brand. One of the advantages was that Lexmark’s ink cartridges have a more attractive...