RUNNING HEAD: DELL COMPANY OVERVIEW
Dell Company Overview
Your Name
MGT 450 Strategic Planning for Organizations
Instructor Sheila Fry
February 28, 2012
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DELL COMPANY OVERVIEW
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Dell Company Overview
An extensive image of satisfying consumers by offering custom made computers directly
to their door was Dell’s prime goal since its birth sometimes 26 years ago. Company designs,
produces, manufactures, promotes, sells, customizes and extends direct sell customized personal
computers, as well as presents excellent services from coast to coast and country to country.
Divers workforce enriched company Dell also offers its business producing software and
peripherals, smart phones, servers, mobile workstations, as well as data storage capability and
networking server optimizations. Company currently employs more than 98,000 skilled workers
with $60.7 billion in revenue and $9.26 billion in gross profit according to the financial record of
2010. Dell holds $13.38 billion of total cash and $6 billion of total liabilities. Company operates
its many different subsidiaries in about 28 countries. Dell had achieved its recent year’s goal by
merging the two significant brands to promote better line of products such as Alienware Systems
which opened some artistic line for exclusive gaming industry and the Perot system that helps
the medical database in control. Company generates almost 1/2 of its revenues outside the US
every year. Company is well known for its customer’s relations especially on direct distribution
of personal computer. It has been said that” Just In Time (JIT)” method was first used by Dell.
Company was able to save millions of dollars inventory cost by implementing JIT in their
product flow system. JIT is very helpful when company lacks to meet the deadlines to reach the
distributors or customers. Dell was penalized with an internal investigation for severe financial
irregularities during the FY 2007. Finally Chairman Michael Dell and few other executives got
relieved from those charges by paying a good sum of fines to SEC which rescued them from
serious penalties and sanctions.
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Dell is the first company to its kind to come forward to reduce greenhouse gas emission.
Company’s goal is to reduce greenhouse gas by 40% in the entire Dell production facilities all
over the globe by 2015. Fortune 500 has put Dell on 38th position and company became the most
admire company in the US in 2009.
Mr. Michael Dell produced his first personal computer from his dorm room in 1984 which
was marketed later as Turbo PC, na IBM compatible computer in 1986. From that time on Dell
has been a dedicated player producing quality personal computers for home and business as well
as government and private organizations. Dell currently manufactures, designs, and sells an
extensive range of computing products globally which include: “desktop PCs; laptops, net-books
smart phones, mobile workstations, and networking servers such as storage, remote access
network, direct-attached storage, disk backup systems, and removable disk backup; and
operating systems. Dell also support several office applications include security software, antivirus, laptop accessories, and televisions, networking entertainment software; keyboards mice,
printers, and power adapters, digital cameras etc. Dell’s mission doesn’t stop there; they also
provide technical support in the company wide with excellent financial services, infrastructure
technology services, and Information Technology consulting services. Dell’s serves several
different groups which include Government, education and health care organizations, corporate
business, small business, and individual consumers. In 1995, Dell started its computer production
in Malaysia and in Republic of China in 1999. Made in India brand started in India in 2006
which serving the Southeast Asian region. In 1999, Dell opened its power Edge Server in its
Hortolandia, Brazil. For its outstanding performance on recycle management, Dell received
‘Recycle Works’ award from the national recycling coalition in 2007.
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It is obvious that Dell have been confining the best expertise in its field to manufacture the
best products since its launch in 1985. The company has been recognized for strong customer
support for various type services using its supremacy of artistic employees. Dell is always wellknown for its outstanding performance in customer relations around the globe. Dell utilizes its
strong marketing apparatus which include television, news papers, magazines, flyers, arena of
events, and optimized through all main search engines sites. Dell flashes everywhere with a
strong leadership and management structure in the technology company.
The main players of the company are Michael S. Dell as the chairman and CEO, President
of services is Peter Altabef, , Enterprise product’s Senior vice president Brad R. Anderson,
president of public services Paul D. Bell, , vice chairman of operations and technology, Jeffrey
W. Clarke, President of consumer services Stephen J Felice, , President of communications
Ronald G. Garriques, and Senior vice president and CFO Brian T. The most effective executives
are senior vice president of corporate strategy Gladden David L Steve H. Johnson. Shareholders
elect the 12 members of board of directors who make significant decisions for the well being of
the company. These board members of the Company participate in individual committees that
manage specific matters within the company. These are four audit committees plays a big roll
such as: Nominating Committee, Compensation Finance and Governance Audit.
In the last few years company’s senior executives faced charges of fraud accusing of
misleading trade practice and false advertisements in the national medium. Dell is facing several
lawsuits due to poor technical support provided by dell expertise which took place in May 2008.
New York Supreme Court handled that case where if found guilty Dell might have to pay serious
amount money for settlement. In Mid 2007, SEC brought Dell to the court for serious financial
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discrepancy and irregular accounting practice which cost the company’s executives more than
$100 million and a good deal of good will. Dell experienced multiple sanctions where they were
denied charges and falsified documents without reviling the activities of fraud.
21st century pioneer Dell seems to be very up to date with their innovation and excellent
marketing capabilities. On the contrary, it is still very vague to comprehend their ability to fight
against their rival HP, Apple, and Samsun. It looks like the company’s best products are
struggling to excel the market with the new generation tablet PCs. Apple’s I-pad, ASUS tablet,
Nokia and Amazon’s kindle are staying at the top where Dell computer lag behind with poor
features of Dell Streak tablet. The price of Streak is much higher than those are offering better
features such as ASUS Eee pad. (Asus, 2012)
Macro-environmental factors come in play when a company is analyzed to see what its
position in present market and where its direction is for future achievements. These factors are
also described as the external factors where the company do not poses much control to it. Macroenvironmental factors are usually assessed by several key categories. The six main categories are
identified as economic, social, demographic, technology, cultural and political/legal. These
factors are thoroughly investigated below
Recent year’s economic recession and poor job market had a lot to do with the technology
market to be very slow with production. Production has been cut down due to the lower sales in
the PC market where Dell plays a big roll. In 2008, Dell was forced to close its desktop
manufacturing facility in Texas due to severe logistic problem. Lesser demand went its peek of
the curve in the Middle East and therefore another desktop production line in Beirut, Lebanon
had been shut down in 2009. After a few years of production, in November 2010 a major US
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plant was forced to close. Looking at this circumstances Dell must find a way to come with
cheaper products and best value item for the general population when people are tighten their
belts.
Dell lives up with style and innovation as the society goes alone with its modern faster
pace. On the other side of the token, Dell actually a little bit lost for holding those old designs of
machines that they could have replaced with new generation social media friendly touch screen
products. Modern life style, urbanizing platform and Social development, is drawing many
opportunities for Dell to bring real success.
Dell is operating its subsidiaries in 7 continents and 26 countries with significantly higher
revenues compare to back home in the US. The demand of technology machines specifically
computing products have been sky rocketed in the last decade, especially in the developing
countries and Dell definitely took advantage of that movement. The new generation of
information technology and wireless opened a wide door for Dell to extend more rapidly around
the globe. Dell takes the rising of Chinese economy as a challenge to excel in their innovation
and sustainability and thus Dell became the pioneer for personal computers in Asian. In 2007,
Dell invested 60 million to produce 400k desktop per year. European and Asian market looks
very good for Dell since the fall of Nokia and Sony with only a little challenge from Apple
computers and their unique mobile computing device. Strategically it is eminent for Dell to up
with more competitive tablets and mobile device to beat Apple’s world market.
Out of all the other macro-environmental factors, the Technology is the key for companies
to survive. For Technology Company like Dell, there is no other way to succeed in this game of
rapid innovative technology race. Dell’s representative said “For more than 26 years, Dell has
empowered countries, communities, customers and people everywhere to use technology to
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realize their dreams”. [Dell 2012] As a high technology mission, the Green Initiative had a great
outcome for Dell. Dell stands for special brand for business operation with more steadfastness,
long life cycle and serviceability.
Cultural norms did not affect Dell they way it could in a different sense where people
tend to respect more for their home grown products. For an example American made products
always had a great influence thus big companies like Ford and GM remains icon for ‘American
made’ motto. Some researcher would predict that culturally Dell’s computer sale would down
play in Japan, instead they have a larger sale volume that was expected in the last 3 years. Dell
has gained more popularity among you high school and junior high students.
Dell’s voice, “Customers trust us to deliver technology solutions that help them do and achieve
more, whether they’re at home, work, school or anywhere in their world.”
Due to reduction of government projects in the recent years, Dell has suffered a great deal
to cope with other rival like HP and Samsung. The company has been always at the top of the
line for educational and government computer supply organization since 2000. Political
transformations could play a big role for a company like Dell to receive new contracts or reorder
for existing projects. For an example, Health care reform/ Obamacare would actually bring more
jobs and product demand for consumers. There would be more demand of data storage from
trusted company as Dell.
SWOT analysis is defined as how to assess an organization’s internal and external
factors. SWOT analysis was developed by Albert Humphrey. It is an abbreviation of Strength
and Weakness as internal factors, Opportunity and Threat as external factors.
A quick SWOT analysis for Dell Company is listed below:
Internal Factors:
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1. Strengths:
a. Leadership: Founder, chairman and CEO Michael Dell has grouped outstanding board
members to manage such a large organization, employing 110,000 employees around the
globe. Highly trained management team regularly speaks to customers to increase
customer satisfaction.
b. Productions & Delivery: Dell gained a lot of trust among online customers who orders
custom made products for their need. It has been a huge deal that its customer are very
closed to the customer service team since Dell is the best for being very close to its
customers for direct marketing advantages. Just In Time (JIT) was first implemented by
Dell to satisfy diverse customers.
c. Organizational Competencies: Dell’s managerial configuration is an excellent set up for
to meet the company’s objective.
d. Equipment/ Location: Dell is always suitably prepared to manufacture its goods and
services to the consumers. As of September 2010, Dell operates its business in 26
different countries around the world.
e. Marketing: Dell’s marketing strategy is one of a kind in the market place. Since early
90s, Dell has been a leader in selling computers over the phone and the internet. Dell’s
advertisements are seen in almost every major mass media in the United States.
2. Weaknesses:
a. Dell’s rating went down by the consumer analysts due to its higher prices on few items
like the Tablet Streak which is really outdated in feature.
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b. Dell has been spending too much money and time on off beam products and services
which let the company move to a different direction. Dell needs to focus on mobility
products such as smart phones and tablets.
c. Technology: It is eminent for Dell to move forward and focus on to future generation of
innovations. We haven’t seen many activities for Dell in any mobile communication
market that is very critical at this time.
d. Financial stability: Dell’s net income shows poor results compare to the previous years
because of its declining revenue. Lesser demand of desktop and excessive spending on
R&D is bringing in more instability to ts wealth.
e. It seems to be very slow movement for projects that are associated with future technology
and mobile communication market.
External Factors –
Opportunity and threats are discussed below:
1. Opportunities:
a. Social macro-environmental factors: Because of rapid changes in our society, public
intention is getting more toward urbanizing with modern devices, such as mobile
computing. This is why; I believe Dell has the finest opportunity to go forward develop
itself to a next generation of technology.
b. Cultural: Western culture and educated society is definitely captured by Dell so far.
c. Demographic: Globally Dell is fore runner in computer business. Also all level of people
use personal computers that makes it almost certain that most Computers manufacturer
have good opportunity to contribute to the society.
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d. Political: Sudden changes in politics can veer the directions of large companies due to its
contract. For an example, Obama care would create a big job market as well as revenue
boost for Dell.
e. Technology: It looks like Dell has been busy with its existing products even though they
showed a significant R&D expenses in 2010 financial report. Now is the time for Dell to
step up and grab the mobile computing device and beat the market. This is why I am
optimistic that Dell will take advantages of its resources enter the wireless device
solutions and be the best in mobile computing.
2. Threats:
a. Social Threats: Apple has always been a big rival and a threat to Dells computer when it
comes to a market Competition. Apples I-pad had already captured 61% of all the Tablet
market. Therefore Dell must take action on improving it only tablet Streak which is very
poor in its specification.
b. Economics: Recent economic turmoil has driven consumers toward cheaper bad quality
products such as Acer and Asus brand.
c. Demographics: Dell has cut down several production facilities and reduced the
production due to poor demand on desktops. These type of reduction in the product line,
unemployment rate in such region and new immigrants could play a big role and slow
down the growth of the company.
d. Legal: A few outstanding legal issues and lawsuit have been a big burden for Dell in the
past years. Unlawful commercial and falsifying information led the company to suffer
multiple charges. The company is undergoing a serious investigation of financial
discrepancy by the SEC. These problems could be very harmful for the trust the
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consumers hold. The company should be up front and release all financial information to
regain the public trust.
e. Cultural: The generation we live in is very sensitive. The cultural norm is totally
depending social activities and social status. In this era of fast pace, culture and
urbanizing society require to have social media and mobile communication. Thus Dell
has to be very serious and take action before it drops out of the sky like Research in
motion (RIM) aka Black berry products.
Dell currently manages into two foremost areas of its business. The widely running part
is custom made PCs directly sending to the customers and the other one is developing and
servicing of software peripherals, servers, smart phones, mobile workstations, storage devices
and as well as networking. Last few years, Dell has accomplished its objective by capturing its
movement in both natural and inorganic means when it merged with companies like Alienaware
and Perot Systems. It has been identified that more than 60% of Dell’s revenue has been
generated from its PC systems, 16% from software and accessories, 15% from Storages and
servers and 9% from technical services. As of January 30, 2010 the company showed it has
46,000 employees of which 51.75% work in other countries and remaining 48.3% in the United
States. (Financial news, Dell.com, 2010)
In this high pace competitive market Dell’s leadership is a key to success that should be
played using 100% business ethics and corporate responsibilities. From the episodes of fraud in
commercials and financial indiscretion the company went downhill which must be dealt with
very carefully by shuffling the senior leadership up to the ladder. The pending case in the New
York Supreme Court may judge against the interests of Dell which could be handled and settled
in a goodwill saver for the company. Dell’s background of being a premier to innovation is
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widely respected but current years it seems to resist quite a bit to renew its products in a right
direction. Looking at Apple’s I-pad Dell launched the Streak 7 which embarrassed the entire
market by a few months late arrival with outdated features with relatively higher price. In this
situation Dell must get the right tablet to beat at least the average market expectation. Company
hasn’t been able to come up with any good solution to smart phones that would be compatible to
Android and comparable to Apple’s i-phone. Some reason Dell failed present a better mobile
communication device even though they spent double the sum of money for R&D in FY 2010. In
this critical moment company must open a strong sector from an existing branch that handled the
R&D for mobile devices and re-establish the new generation Smart phone which will make Dell
a wolf than a sheep. Company must make sure their new products reach globally at the same
time of the home market. Apple’s Steve Jobs set an example of that ideology that everyone from
the other side of the world should enjoy the technology at the same time. Wining the crowd is
actually wining the market and this is only possible for Dell by keeping the price down and
providing most updated specifications to its products. Therefore, Dell’s marketing team must
focus on dropping the price and attract new customers for its new products. I believe if Dell
keeps its products renewed with the best features and play along the high paced communication
market and put a new innovative product each year, the company will definitely see a stronger
revenue and wide acceptance to all levels of the consumers.
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