DELL, INC. PESTEL, PORTER'S 5 FORCES AND SWOT ANALYSIS

Tee Chin Wey (09ABB07499) Ong Shin May (09ABB03597) Lim Sed Hoong (09ABB04569) Chin Jia Wen
(09ABB02940)
Introduction
Pest
Porters 5 Forces VCA
Abigail Tan Wai Mun (09ABB07166)

SWOT
DELL, INC.
Powerpoint Templates
Page 1
Goldman D., 2009 net income fell 63% to $290 million sales fell 23% to $12.3 billion
Gartner Research Company predicted US 0 Growth, Europe
Forrester Research analyst Andrew Bartels PCs market worst hit during recession
2008-2009Sales affected Demand

product and price competition
customer service, quality and reliability

competition in the Home User market segment through phone or internet not comfortable
24/8/2011
Dell issues & problems facing.
PEST Analysis
Page 3
Political Analysis
1. Political instability and restrictive policies in China threat 2. Control of the Internet user activity by the Chinese government threat 3. Political constraint of fair-trade decisions in the U.S. threat 4. President Obama recently extended the 2001 2003 federal income tax rate cuts-Dec, 2010 opportunity 5. Increase in the minimum wage of U.S. workers from $6.55 an hour to Powerpoint Templates present threat $7.25 an hour at
Page 4
Economic Analysis
1. The 2011 Economic Crisis causes the U.S. stock market, U.S. dollar and manufacturing activities to go down threat 2. High unemployment rate in the U.S. market causing purchasing power to decrease threat & opportunity 3. Impact of recession on suppliers of Dell threat
Page 5
Socio-Cultural Analysis
1. Students in South Korea will replace textbooks with Tablet PCs by 2015 opportunity
2. Future of E-learning industry would be bright in India opportunity 3. Growing pool of tech savvy consumers especially gen Y and mobile professionals opportunity
4. The trend towards green products in line with protecting the environment opportunity
Page 6
Technological Analysis
1. Wider use of Internet and World Wide Web opportunity 2. Technology advancement that brings low cost advantage and innovative products at competitive price opportunity
Page 7
Industry Analysis
Porters 5 forces
To identify factors that shape the character of competition
Michael E.Porter, Harvard Professor

Page 8
PORTERS 5 FORCES
Bargaining Power of buyers (HIGH) Rivalry among existing competitors (HIGH) Bargaining Power of suppliers (HIGH)
Threat of new entry (MODERATE)

Threat of substitute products (MODERATE)

Page 9
PORTERS 5 FORCES(CONT)
Bargaining Power of buyers
Individual buyers -Home users Large volume purchasers -SMBs Most computer products are compatible with other brands and is not vastly differentiated (Switching Costs, 2006).
Page 10
Bargaining Power of suppliers
Few number of suppliers for components Rely on the components manufactured by monopolies Threat of forward integration by supplier(high)
Page 11
Threat of new entry
Incredible phase and getting more attractive Market leader for the computer industry always changes (Anton,2011) Capital requirement low - Large company Barrier to entry for small size companies (Analysis of Computer Hardware in Asia and Thailand Market, 2010). Access of distribution channel- distribute their products (Dell
replacing traditional distribution)

Page 12
Product differentiation in the PC industry is getting harder and harder to achieve based on technical specifications, says Nadine Kano, marketing director for experience computing at Microsoft (Redmond, 2008).
Nadine Kano, marketing director for Microsoft

Page 13
Rivalry among existing competitors
HP, Dell, Acer, Compaq and Apple Commodity-like product The price of the PC has declined through competition since 1990s (Bhatia, 2009)
Lack of differentiation
Weapons price
Page 14
Threat of substitute products
refer to products from other industries Mac produced by Apple Computers
few distinct specifications operating system- MAC OS X while other PC uses Windows or Linux OS relearn from using a Windows based OS to a Mac OS
Page 15
Threat of substitute products
Tablet PC (Apple iPad 2 and Samsung Galaxy Tab)
handheld, portable sized laptop
not able to produce work on it productively due to its small size

and less powerful processor
Page 16
Value Chain Analysis
Page 17
Primary Activities
INBOUND LOGISTIC Just-in-time (JIT) inventory system
-reduce costs of warehousing, hiring people to track and maintain inventory & avoid holding the obsolete technology -keep low volume of inventory.
Supply Chain Management

-DSi2 system (improve inventory planning, forecasting and execution system) -global views of product demand and material requirement
OPERATION
Outsourcing-outside suppliers & contract manufacturers (Asia and Mexico) inventory turnover, cash turnover and return on capital invested
Page 18
Primary Activities
OUTBOUND LOGISTICS
the worlds largest direct sales computer company Order custom computer built in 3 days delivered within 1 week sales trends & unmet customer need
MARKETING AND SALES

direct sales model-cost-efficient experienced in market segmentation CMB team (Chadwick Martin Bailey team) - engineering, environmental design, product development and marketing and advertising
Page 19
Primary Activities
SERVICES
offer repair services through local contractors to reduce downtime. created custom corporate sites called Premier Pages - purchase prices, history and order status -Customer forums (share opinion & complaint focusing too much on cost-reduction - removes its toll-free support number
Page 20
Secondary Activities
GENERAL ADMINISTRATION
strategic partnerships with Intel and Microsoft have begun to be equipped with the Linux operating system develop more creative technology to identify new product market opportunities
HUMAN RESOURCE MANAGEMENT

phone technician courteously assisting customer with problem build strong reputation performance improvement installation of special computerized job Knowledgeable employee & focus on customer psychology
Page 21
Secondary Activities
RESEARCH, TECHNOLOGY AND SYSTEMS DEVELOPMENT
moving greater volumes of product sales, service and support to the Internet invest $1 billion to develop leading IT solutions, services and cloud-based delivery options build multiple highly efficient data centers all over the world does not have proprietary technology
PROCUREMENT
Internal-satisfying a customers request External-involves suppliers, vendors, manufacturers, transportation, and distributors achieve high flexibility and responsiveness in producing a large variety of products E-procurement was signed between Dell and PartMiner 22 Powerpoint Templates Page
SWOT ANALYSIS
Page 23
STRENGTH
One of worlds largest PC maker
JIT inventory system
Only holds 6 days of inventory. Save on inventory holding cost.
Sells directly to customers Outsource manufacturing activitiesCut out the use of intermediaries.
Reach customers faster.
Increases EOS & lower production cost
Build computers based on Strategic partnerships with Intel and Microsoft customers specification
Wide use of info technology and CRM
Store date of customers. Customers track delivery status. Powerpoint Templates Page 24
WEAKNESSES
Dealing with large Heavy reliance on few number of suppliers & large suppliers contract manufacturers
Quality issues may arise
Customers unable to go to distributors & retailers to buy

Dells poor repair services
Only focus on its PC business

No any unique technology
Hurt sales and reduce market share Powerpoint Templates
Page 25
OPPORTUNITIES
THREATS
New entrants enter into computer market
Electronic study aid in education -may replace textbooks by 2015 Tariff & non tariff barriers, restrictive policies Growing pool of tech savvy consumers- Gen Y and mobile Control of Internet usage by professionals Chinese government- Internet users to register with the police Tax laws in US- new payroll tax break Increase in minimum wage legislation in US- $6.55 to $7.25 Cost reduction in latest technology Fair trade decisions@ Dumping Laws in US Growing needs from customers for security devices and software Competitive rivalry in PC marketsmaller and smaller price Powerpoint Templates difference between brands 26 Page
STRATEGY FORMULATION
Page 27
SO STRATEGIES
Product Development Opp in education market: Appeal to needs of students Growing need for secure workstation: Develop security software and devices
Market Development Spread of Internet and World Wide Web: Expand sales to new market segments (Government & Education) and geographic locations
Market Development
Add new channels of distributions(Retailers) Physical service and troubleshooting centers
WO STRATEGIES
Concentric Diversification
Customer demand for security: Acquire businesses involved in security devices and software
Product Development
ST STRATEGIES
Competitors and new entrants: Develop new products more quickly
Strategic Alliances
Decreasing price differences from competitors & increase wage in US: Contract manufacturing and outsourcing
Joint Venture
WT STRATEGIES
Political constraints@China: Leverage on local know-how and minimize legal barriers
Strategic Alliances
Fend off competitors: Share skills and expertise in marketing & technological knowhow to create synergy

DELL, INC. PESTEL, PORTER'S 5 FORCES AND SWOT ANALYSIS

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DELL, INC. PESTEL, PORTER'S 5 FORCES AND SWOT ANALYSIS

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Tee Chin Wey (09ABB07499) Ong Shin May (09ABB03597) Lim Sed Hoong (09ABB04569) Chin Jia Wen

Porters 5 Forces VCA

Abigail Tan Wai Mun (09ABB07166)

Gartner Research Company predicted US 0 Growth, Europe

2008-2009Sales affected Demand

customer service, quality and reliability

Dell issues & problems facing.

Michael E.Porter, Harvard Professor

Threat of new entry (MODERATE)

Threat of substitute products (MODERATE)

replacing traditional distribution)

Nadine Kano, marketing director for Microsoft

not able to produce work on it productively due to its small size

Value Chain Analysis

Supply Chain Management

MARKETING AND SALES

HUMAN RESOURCE MANAGEMENT

Customers unable to go to distributors & retailers to buy

Only focus on its PC business

Hurt sales and reduce market share Powerpoint Templates

Competitors and new entrants: Develop new products more quickly

Political constraints@China: Leverage on local know-how and minimize legal barriers

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