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• Dell is the Worlds largest PC maker. Profits for the 3 months to July 2005 were in excess of 1 billion US, representing a growth of around 28%. For the last couple of years it has held its position as market leader (it took it from rivals HewlettPackard). The Dell brand is one of the best known and renowned computer brands in the World.
SWOT Analysis Strengths Dell is the World's largest PC maker Profits for the months to July 2005 were in excess of $1 billion US, representing a growth of around 28% For the last couple of years it has held its position as market leader (it took it from rivals Hewlett-Packard) The Dell brand is one of the best known and renowned computer brands in the World Dell cuts out the retailer and supplies directly to the customers It uses information technology, and Customer Relationship Management (CRM) approaches to capture data on its loyal consumers So a customer selects a generic PC model, and then adds items and upgrades until the PC is kitted out to the customer's own specification Components are made by suppliers, never by Dell PC's are assembled using relatively cheap labor You can even keep track of your delivery by contacting customer services, based in India The finished goods are then dropped off with the customer by courier Dell has total command of the supply chain Weaknesses The company has such a huge range of products and components from many suppliers from a plethora of countries, that there is the occasional product recall that can cause Dell some embarrassment In 2004 Dell had to recall 4.4 million laptop adapters because of a fear that they could overheat, causing electric shocks or fires Dell is a computer maker, not a compute manufacturer It buys from a group of concentrated hitech component manufacturers Whilst this is a tremendous advantage in terms of business operations, allowing Dell to focus on marketing and logistics, the company is reliant on a few large suppliers, and to an extent is locked in for periods of time (i.e unable to switch supply Opportunities Kevin Rollins replaced Michael Dell in 2004 as Dell's Chief Executive Officer Dell remained the company's Chairman Despite founder Dell's massive success, new blood and a change in management thinking could lead the company into a new, even more profitable period Dell was born in 1965, and founded Dell in 1984 with $1000 whilst studying at the University of Texas He became the youngest Fortune 500 CEO in 1992, and will be a tough act to follow Dell is pursuing a diversification strategy by introducing many new products to its range This initially has meant good such as peripherals including printers and toners, but now also included LCD televisions and other non-computing goods So Dell compete against iPod and other consumer electronics brands Dell is making and selling low-cost, low-price computers to PC retailers in the United States The PC's are unbranded and should not be recognised as being Dell when the consumer makes a purchase Rebranding and rebadging for retailers, although a departure for Dell, gives the company new market segments to attack with the associated marketing costs Threats The single biggest problem for Dell is the competitive rivalry that exists in the PC market globally As with all profitable brands, retaliation from competitors and new entrants to the market pose potential threats Dell sources from Far Eastern nations where labour costs remain low, but there is nothing stopping competitors doing the same - even sourcing the same or similar components from the same or similar suppliers Remember, Dell is a PC maker, not a PC manufacturer Dell, being global in its marketing and operations, is exposed to fluctuations in the World currency markets Although it is a very lean organization, orders have to be placed some time ahead due to their size or value Changes in exchange rates could leave the company exposed to potential loses in parts of its supply chain