Dell Inc. Situation Analysis and Swot

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Dell Situation Analysis and SWOT
By: Nicole Saathoff

Dell was started in 1984 by a college student, Michael Dell. Dell started the company off out of his college dorm room. He bought IBM compatible computer parts at wholesale prices and built computers that resembled IBM models. He sold them to people looking for a PC but not wanting to pay the retailer prices. After making $80,000/mo, he dropped out of college and started Dell Computer Corp.(Free Encyclopedia of Ecommerce) He started advertising and selling computers through telephone orders, and because he used no middleman, he was allowed to sell machines lower than competition. It took no time for him to become the leader in mail order PC sales. Because of this growth, he put together a marketing team and hired a company president. Dell appointed himself CEO of the company, and started expanding his company by making his mark in international sales. He started manufacturing facilities, a national customer support center, offered on-site setup, maintenance, and repair for his products. Dell began targeting clients on a larger scale, such as corporations, schools, and government entities but also serve smaller businesses and home users. In 1988 they sold their first share for $8.50, and started working to upgrade its machines. (Free Encyclopedia of Ecommerce) They became one of the first to create file servers, and began working to incorporate Intel’s microprocessor. By 1990, 40% of their revenue came from corporations, but because of research and development costs and inventory surplus, profits plunged to 64%.(Free Encyclopedia of Ecommerce) Today, Dell continues to grow internationally and looks to move most of their product sales, service, and support to the Internet. Through the Internet and value-added services, Dell intends to continue to grow its business at a high-growth rate.

Industry Analysis: Trends, Growth, Main Competitors
These days, more and more people are talking of the "post-PC" era because the excitement, innovation and major growth have all shifted from personal computers to smart-phones, tablets and virtual PCs. (Castaldo 2010) According to Marks (2009), virtualization refers to the process of installing multiple "virtual" servers on a single computer. So, instead of having a bunch of desktop computers working at only part of their capacity, virtualization can help get more use out of a single machine. This is huge for Dell considering they mostly cater to larger institutions and businesses because it allows these places to get rid of all of the unnecessary individual computers. There are huge benefits from getting rid of a bunch of computers and running all your business applications on one tower because you can cut the cost of powering those machines, save on space, and protect yourself so that if one application crashes it affects only one virtual server, not the entire machine. (Marks 2009) This industry has grown tremendously in the last three years and will continue to grow as providers compete in pricing and software. Wireless allows us to use these electronic devices just about anywhere, and virtualization takes away from our need of our personal computer’s processing power. We can now store our information and software on the internet or servers. As computers become more mobilized, companies are competing to put out the most specialized devices, and it seems that Apple is setting the mark. Apple's multifunctional iPad has sold more than 7.5 million units since it was unveiled in April 2010. (Rapp 2011) Since the unveil of Apple’s iPad, other PC makers have been racing to keep up. HP has come out with a slate PC that runs Windows 7 and costs between $549 and $599.(Olenick 2011) The Streak, and Android based web surfing device, has been put out by Dell and is smaller than rival tablets but is larger than most smart phones. It has a 5-inch touch screen, can make calls and fits into your pocket. Dell plans on putting...
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