Business Case study – A Case study of Dell Technologies
Dell Inc., operates under brand name Dell, is an American computer technology organization that develops, repairs, sells and supports the computers and its related products. Named after the founder, Michael Dell, this company is one of the largest technological corporations all over the globe, employing more than 145,000 people around the world.
Dell sells servers, personal computers (PCs), data storage devices, software, computer peripherals, network switches, HDTVs, printers, cameras, MP3 players, built by the other manufacturers. This company is known for the innovations in electronic commerce and supply chain management. Dell was a pure hardware vendor for much of its existence, however with acquisition of Perot Systems in 2009, Dell entered the market for services of IT. The company has made additional acquisitions in networking and storage systems, with the aim of expanding the portfolio from offering computers only to delivering overall solution for enterprise customers.
Background of Dell company
Dell traces origins to 1984, when Michael Dell created Dell Computer Corporation, which at that time did business as PCs Limited, Dell dropped out of school for focusing full-time on fledgling business. According to Ana from Myassignmenthelp marketing department, “In 1985, this company produced the first computer of own design, Turbo PC. PC’s Limited advertised the systems in national computer magazines for sale directly to consumers. The company grossed more than $73 million in its first year of operation”.
In 1986, Michael Dell brought in Lee Walker, as president and chief operating officer, to serve as mentor of Dell and implement ideas of Dell for growing company. Walker was instrumental in recruiting members to the board of directors when the company went public in 1988. The company dropped PC’s Limited name in 1987 to become Dell Computer Corporation and started expanding globally.
About Dell:
| Name of company: Dell technologies |
| Year of Formation: 1984 |
| CEO: Michael Dell |
| Annual revenue: $90.6 billion |
| Countries in which it operate: Worldwide |
Main competitors
The top competitors in Dell Technologies’ competitive set are Lenovo, HP, Samsung, Sony, Apple, IBM, Acer, ASUS, LG Electronics and Toshiba.
SWOT Analysis
Strength
- Dell allows customers in customizing their laptops. The services were not found originally within any major computer retailer, however add great value to customers and also provides Dell with competitive advantage.
- According to Topassignmentreviews.com, “Over last few years Dell has spent $13 billion for successful acquisitions and mergers, which brought patents, assets, new capabilities and skills to business”.
- Dell has quite strong brand reputation of quality products.
- Dell is engaged in several green initiatives and received several rewards for being eco-friendly business. It is benefit when working with government and public agencies.
Weakness
- The large stream of revenues of Dell comes from computer which is commoditized product.
- Company spends much lower percentage of income on R&D that main competitors and missed opportunity in developing strong products for tablet and smartphones markets along with in learning new capabilities and skill.
- Once praised, customer services of Dell deteriorated due to the outsourcing call centers offshore. Dell invested lot of money to fix this, however has not regained previous reputation of customer services.
- Due to low spending on R&D Dell has not acquired strong portfolio of patents and it finds this hard to compete within lucrative smartphones market.
Opportunities
- If Dell wants to diversify, this needs new technology patents as well as new ideas. Dell has not properly established R&D facilities for discovering new technologies, so only feasible way for obtaining technologies is acquiring other companies.
- Dell provides several services as well as enterprise solutions which are most profitable business of Dell at the moment. Dell business should focus to grow these divisions as they promise better growth opportunities. Emerging economies are fastest growing markets for tablets laptops. Dell has good presence in the markets, however should strengthen position as this company experiences declining market share.
Threats
- Main income of Dell is from selling hardware products, whose prices would increase in future due to rising prices of raw material. This will add in costs for Dell.
- With lower price as well as strongly improved capabilities, the consumers choose smartphones and tablets over laptops. Growing demand for previous devices takes share out of the laptops, main stream for revenue of Dell.
- Growth rate of computer market is slowing down and within near future, markets would become saturated. This would prove hard for Dell in competing in market.
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