Dell Inc., 2009
Mr. Reeder
Mr. Mackey
Ms. Blocker
Ms. Richey
Overview
 Analyze case/ Success and Downfall
 Competitive Advantage
 SWOT
 Internal/External Threats
 Dell Competitiors
 Response to Threats
Dell Inc., 2009
The success of Dell
How Dell Added Value to
its Company
Dell, the Largest supplier
The fall of Dell and the
Rise of others
BTO
Dells Competitive Advantage
SWOT Analysis of Dell
Strengths:
World’s largest PC maker.
One of the best known brands in the world.
First PC maker to offer next-day, on-site product service.
Direct to customer business model. Uses latest technology.
Dell has low operating cost
Direct relationships with customers such as corporate and institutional customers.
Direct customer service before and after the sale.
Each Dell system is built to order to meet each customer’s specifications.
Dell is able to introduce the latest relevant technology.
Dell is not a manufacturer; Components are made by the suppliers and Dell assembles the
computers using relatively cheap labor.
Dell has total command of the supply chain.
Dell is enhancing and broadening the fundamental competitive advantages of the direct
model by increasingly applying the efficiencies of the Internet to its entire business.
SWOT Contined
Opportunities:
Diversification strategy by introducing many new products to its range.
Personal computers are becoming a necessity now more than ever.
The internet also provides Dell with greater opportunities since all they
have to do now is to visit Dell’s website to place their order or to get
information.
Since Dell does not have retail stores, the online stores would surely make
up for its absence.
SWOT Continued
Weakness:
A huge range of products and components from many suppliers from
various countries.
Computer maker and not the computer manufacturer, making DELL unable
to switch supply.
Dell lacked solid dealer / retailer relationships.
No propriety technology
Not attracting the college student segment of the market.
Dell’s focus on the corporate and government institutional customers
somehow affected its ability to form relationships with educational
institutions.
For home users, Dell’s direct method and customization approach posed
problems.
Customers just can’t buy Dell as simply as other brands the custom-built
according to their specifications and this might take days to finish.
SWOT Continued
Threats
Competitors
New entrants to the market pose potential threats.
The threat to become outmoded is a pulsating reality in a computer
business.
Price differences
Dell’s Direct Model attracts customers because it saves cost.
With almost identical prices, price difference is no longer an issue for a
customer.
The growth rate of the computer industry is also slowing down. Dell has
the biggest share of the market.
Internal threats
●
●
●
Slack- lost focus and allowed cost
structure to become non-competitive
Strategic missteps- waited too long
to improve technology and reduce
cost
Lost shares due to growth of units
sold through retail and competitive
pressure from HP and Apple
External threats
Imitation- lost market share caused by competitors
imitating their supply chain and lowering their prices
●
Substitution- lost share to HP, Apple and other vendors.
●
Hold up- poor financial performance and negative news
coverage caused by Kevin Rollins
●
Dells Competitors
 Hewlett Packard- Focused on getting their products to retail
outlets first.
 Acer inc- Selling lower costing PCs that were Linux and Windows
friendly, bought Texas instrument notebook division,and Gateway
inc and Packard Bell, also ridded itself of conflicting manufacturing
partner Winstron Corp.
 Apple- targeted premium customers, were known for their
aesthetic designs and distinctive advertising campaigns, designed
its own OS, hardware, and services
 Lenovo Group Limited- Largest Pc manufacturer in China, bought
IBM, sold to large businesses, and took advantage of low cost
advertising in Banglore and India. Would contract manufacturing
on a temporary basis.
Dells Response to threats
 We have to gain a retail presence, most of the customers we are
missing go to those places to see the product. If we don’t have a
product their the consumer will not desire our product. We have to
have a presence in the mobile space.