Dell Pursue Growth in a Challenging Environment

Topics: Asset, Balance sheet, Liability Pages: 8 (2314 words) Published: April 2, 2013
Dell Pursue Growth in a Challenging Environment

- Balancing expansion to retail
- Stagnant corporate market (large enterprise, government)
- Costumer market growing but not significant (home, small business) - Downturn economic
- New entrants higher, rivalry higher (price war)
- Bargaining power of supplier high
- Leader change -> policy, goal
- New opportunity market (tablet)
- PC market stagnant
- Still focusing in US market
- US crisis, decrese in ability to pay -> demand changes-------- - Government regulation - to go green (higher cost)
- Inventory cost higher (dead stock higher)
- R&D cost 1% revenue made to stock) mass production
- Segment changes (corporation -> home user)

External Analysis
PEST Analysis
Political: Governments forces the industry to use technology that go green. Economical: Economic downturn, make the customer think twice to buy a PC`s for themselves. They prefer lower spec PCs in purpose to reduce the price. Socio culture: Customer behavior in US, it shown that people who using PC`s are growth year by year. That was the opportunity that even the economic was in crisis, people are still need PC. Technological: An additional technological trend impacting the computer industry is that customers prefer to use a single vendor for all of their computing platforms. From the customer’s perspective, this simplifies technology upgrades and one company is accountable for all of its needs. 5 Forces Analysis

Understanding the external environment is key to successfully competing in the computer hardware industry. Porter’s Five Forces of Competition provide a framework for Dell to outline the bargaining power of suppliers and customers, the threat of new entrants, the threat of substitutes and the intensity of competition. In this industry, the bargaining power of suppliers is high due to the limited number of suppliers for key components. For instance, Intel sells 90%of the microprocessors used in PCs and Microsoft provides 85-90% of the operating systems. In addition, 80% of the world’s laptops are assembled in Taiwan. Likewise, the bargaining power of customers is also high due to the fact that PCs are now commodities. Nearly all PCs contain the same components or the same type of components. However, customers’ power remains limited because consumers may be willing to pay a premium to computer companies that are able to provide technological solutions. Alternatively, the threat of new entrants is low. The1990s saw a significant level of growth, but the early 2000s have shown signs of contraction within the industry. The threat of substitutes is also low since the only available substitute for a Windows-based PC is an Apple Macintosh. Finally, the intensity of competition is high since there are relatively few competitors in the market. However, they all offer the same basic products and must compete on price.

Internal Analysis
Corporate Structure
Dell is best described as a flat organization. From the factory floor to senior leadership very little hierarchy exists to slow down the decision process. Employees are encouraged to pursue the most efficient ways to complete their jobs and are permitted to implement these new efficiencies without prior approval by upper management. This open-communication has made junior employees realize their ideas are welcome and respected. Once proven to be successful, it is not uncommon for these ideas to be implemented across the organization Corporate Culture

Dell preserve its culture through open communication and honesty. Dell` s culture is described as meritocracy which rewards those employees who work hard and critical of those who don`t. Corporate Resources

Logistic: using technology such as information system in purpose to apply just in time inventories. And for the customer they can buy their product using web to know is the product available or not. Operations: based on source from the internet, Dell maintaining an...
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