PART II: SWOT ANALYSIS2
PART II: SWOT ANALYSIS1, 2, 3, 4 Assessment of Environment of Company
Dell is one of the leading Computer hardware and software providing company. It offers a broad range of products and services. Products include desktop PCs, servers, networking products, storage, mobility products, software, peripherals and services include technical IT support, IT infrastructure development and consultation. Dell has been a pioneer of e- commerce as it was one of the first leading companies who extensively used internet to interact with its customer, suppliers and partners to build a strong e-commerce business. One of the main success strategy of Dell’s e-business was it build to order and direct sales of its products and services to its customers using the internet. It hugely reduced Dell’s product inventory cost and decreased the risk of losing value of the product before it can be sold. The company has established a strong market position and is able to defend the same with strong brand value. However, sluggish growth trends in the PC market will impact Dell negatively as the company has significant exposure to PC market segment1. As the business model of Dell heavily relies on e-commerce, we will discuss next the SWOT analysis of Dell Company keeping in mind that its business processes and business model based mainly on e-commerce. STRENGTHS1, 2
* Strong market position supported by strong brand value
* Diversified business operations with focus on growth areas * Dell’s Acquisitions drive to fuel growth.
* Strong sales and marketing
* Large ownership of patents, trademarks and licenses
* Sustainable use of resources and environmental stewardship and social responsibility Dell is market leader and has strong position in IT systems market, the company is also a leading player in the computer peripheral equipment and software wholesaler market. According to Data Monitor report, Dell was the second largest player in the worldwide PC market with volume shipment of 43.8 million PCs in 2010. Further, Dell is the second largest player in the worldwide servers' segment and the market share is estimated to have been nearly 40%. Strong market position indicates that the products and services offered by the company have received wide acceptance from the customers. Accordingly, Dell now has access to a large customer base which is a competitive advantage (Data Monitor 2010). The key to the success of Dell was that it was an early and enthusiastic convert to the Internet, creating its first web site in 1994 and moving many of its business activities to the Internet ahead of its competitors. According to University of California Professors, Kenneth Kraemer and Jason Dedrick, “The Company saw that its direct model gave it an advantage in selling online. Unlike indirect vendors such as Apple, IBM, HP and Compaq, Dell did not have to worry about channel conflict with resellers and distributors when it began selling online. Also its build-to-order manufacturing processes were already in place, making it easy to offer customers the opportunity to configure products online just as they already did on the telephone”. Also, equally important was Dell’s effort to use the Internet to coordinate its entire value network, including suppliers, logistics providers, and distributors of third-party products, system integrators, and service providers. All of this was driven by the tight information linkages between Dell and its customers (Kenneth Kraemer and Jason Dedrick). Dell was successful in implementing its e-commerce strategies to develop and build its business and gain a competitive advantage over its competitors. Dell’s online selling model was the turning point of overall growth and success to gain market by selling and servicing directly to the customers. Also Dell’s...