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DellStrategicManagementAssignment/CaseStudy.Itreviewstheorganizationalstructure,vision,mission,
SWOT,PESTELAnalysis,StrategicGroupMapCompetitionandProductPositioningMapofDell.
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Introduction
ThisreportundergoesastrategicmanagementoverviewofDell,oneoftheleadingPCvendorsofthe
worldwithauniqueoperationsmodelfocusingonbuilttoorderanddirecttoconsumerframeworks.The
reportbeginswithacomprehensiveoverviewofthecompanysoperations,itshierarchy,locationand
principleoflogistics.Anunderstandingofthevision,missionandobjectivesallowsforthestrategic
analysistobeputintocontextandperspective.OurfirststrategicanalysistoolistheSWOTanalysis
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followedbyaninternalandexternalfactoranalysis.ThisisaccompaniedbyaTWOSmatrixallowingthe
reporttopinpointspecificstrategieswhichmayhelptheorganizationcashonitsstrengthand
opportunitiestooffsetthreats.AnoverviewofthelifecycleoftheindustryisfollowedbyaPEST
analysis.Understandingthepoliticalfactorsiscriticalandalongwiththelocationprinciplesexplainedin
thefirstsectionallowsustopinpointsomestrategicdirectionforthecompany.Similarlytheeconomic,
socialandtechnologicalfactorsarediscussedfortheindustryandtheimplicationsforDellonastrategic
level.Acompetitiveanalysiswithothernamesintheindustryisdonethroughaproductpositioningmap
onthefactorsofpriceandcustomization.

Overviewofproductandsize
DellbecametheleadingPCVendoroftheworldin2001.OneofthemostuniquepropositionofDellis
thebypassingofresellerthroughadirecttofinalbuyerstrategy.Thisaccountsfor90percentofitssales
leadingtothereportingofhigherprofitabilityandrevenuesforthecompany.Thisdirecttobuyerresults
inaconsumerintensivestrategyiscalledbymanyasthekeytothesuccessofDellsmodelofbusiness
(Kraemer,etal.,2000).Thedirectrelationshipwithconsumersnotallowsforreducedcosts,better
inventorydecisionsandincreasedrevenuesbutalsoallowsforabetterunderstandingofwhatthe
customerrequires.ThePCsarethereforebuilttotheexactspecificationsasrequiredbythecustomer.
ThisisasharpcontrasttotheconventionalmodelofPCswhicharebasedonvendorswhomakeattempts
topredictthedemandsofthemarket.ThisbuilttoorderstrategyhelpsDellinmultiplefronts,reducing
overheadsandincreasingreturnoninvestmentsatthesametimeasallowingforabetterunderstandingof
themarketandconsumerneeds.Thisspecificstrategycomeswithseveralcomplicationsinoperations.
Theoperationsneedtomakesurethatallpartsandcomponentsarequicklyavailablesothatcustomized
configurationscanbehandledquickly.Thecapabilitiesofproductionandlogisticsofsuppliesmustbe
optimizedinordertomakesurethattherearequickturnaroundsandordersareprocessedefficiently.
Therequirementsofsuchanoperationsmeansthereisaninterestingstructureoflogistics.Thereisa
focusonoutsourcingofactivitieswhicharenonstrategicwhiletheemphasisislaiddownonkeystrategic
areas.Thereisarelationshipintensivestrategywithpartnerswhoprovidethecomponentsandelements
ofthePersonalComputerssoastoprovidevalueaddedproducts.TheactualproductionnetworkofDell
isspreadaroundtheworldrangingfromAmerica,EuropetoAsia.Someoftheproductioncyclesare
outsourcedtoothermanufacturers.Thereisalsoarelianceonthesupplyofseveralcomponentssuchas
CDROMsandDiskDriverstooutsiders.PartnershipwithsoftwareproviderssuchasOfficealsoallowsit
tofurtherincreasethevalueoffinalproduct.Outsidepartnersarealsousedforinstallation,repairsonthe
siteandintegrationoftheoverallsystems.Resellersareusedforrecommendationoftheproductto
consumers.

Locations
ThelocationfactorofDelliscriticaltotheeffectivenessofitsbuilttoordermodel.Thebasicdecisive
factorinchoosingalocationistounderstandhowcostscanbeminimized,builttoordermodelscanbe
extendedanddirectsalescanbemaximizedaroundtheworldwithminimumtimeandmaximum
customersatisfaction.Specificlocationsandtheirselectiondependuponlaborratesinanarea,the
transportationinfrastructure,politicalbarriersandtheclosenesstohighdemandareas.
TheheadquartersoriginallywasinAustinTexas,wherethecompanywasformed.Manufacturingunits
existinTennesseaswell.CurrentlythemanufacturingunitsinAmericaarelimitedtothesetwoareas.
BrazilhasamanufacturingunitofDellinEldoradodoSul.Thislocationpointwasdecidedonthebasis
oftheneedtosupplytheSouthAmericanmarket.Therewerealsopoliticalfactorssuchastheavoidingof
tarrifsbecauseofthechoiceoflocation.TheEuropean,MiddleEasternandAfricanmarketarecombined
asonesectortheheadquartersofwhichisbasedintheUK.Irelandisusedforaproductionunitbecause
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ofthetaxincentivesavailableoverthere(Loughran,2000).Logistichubsandtechnicalsupportunitsare
alsodeployedaroundthecontinent.
ManufacturingunitsareplacedstrategicallyintheAsiaPacificregionaswell.Malaysiabecauseofits
appropriatelaborrates,politicalincentivesandclosenesstosupplierswerechosenasthecentrallocation.
ProductionunitsareplacedaroundthecontinentincludingoneinChinawithclosesuppliersinTaiwan.

Hierarchy
Theorganizationalhierarchycanbeseenasfollows:

Vision,mission,goalsandobjectives
Vision

Itsthewaywedobusiness.Itsthewayweinteractwiththecommunity.Itsthewayweinterpretthe
worldaroundusourcustomersneeds,thefutureoftechnology,andtheglobalbusinessclimate.
Whateverchangesthefuturemaybring,ourvisionDellVisionwillbeourguidingforce
Thevisionstatementisabletoputforwardoneofthemostimportantprinciplesbehindtheoperationsof
Dell.TheindustrythatDelloperatesinisoneofthemostdynamicandeverchangingoneinthe
internationalmarket.Fluctuationoftechnologyandconsumerdemandsmeanthatchangeistheonly
constant.Thisiswhythelackofpredictionleadstothevisionstatementwhichfocusesonthe
interpretationofstrategythroughconsumerneeds,technologytrendsandinternationalbusinessclimate.

MissionStatement
DellsmissionistobethemostsuccessfulComputerCompanyintheworldatdeliveringthebest
customerexperienceinmarketsweserve.Indoingso,Dellwillmeetcustomerexpectationsof:
Highestquality
Leadingtechnology
Competitivepricing
Individualandcompanyaccountability
Bestinclassserviceandsupport
Flexiblecustomizationcapability
Superiorcorporatecitizenship
Financialstability
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BusinessObjectives
Dellsbusinessobjectivesincludequality,leadingtechnology,competitivepricingandflexible
customizationsupport.Throughastrongqualityassuranceteamandinhousecapabilitiestobuildmostof
itsproductithasbeenabletodevelopastrongQAengineeringfunction.Throughaparticipativeculture
ofemployeesandadrivetomeetfuturemarketneedsitisabletoincorporatealldevelopmentof
technologiesinitsexpansion.Itsbusinessmodelhasalwaysbeensuccessfultostayontopoftechnology.
Utilizingabuildtoordermodelithasbeenabletoincorporateleadingtechnologyaswellasprovide
flexibilityofproductstoconsumers.Throughtheremovalofmiddlemeninsalesaswellasdevelopingin
housecapacitiesandoptimizedinventorymanagementDellhasalsobeenabletoachievecostleadership
inmanymarketsegmentsofthecomputerindustry.

Culture,ValuesandHistory
Dellhasahighlycustomercentricculture.FoundedbyMichaelDellin1984,thecompanywasfounded
toservethecustomersdirectlywithPCsthatwereabletomeetspecificneeds.Thecompanywasnamed
PCslimitedatthattime.Therehasbeenonebeliefthathasalwaysdriventheorganizationrightfromthe
beginningwhichistobecompletelyconsumerfocusedtothepointthattheyareabletoincorporate
customizedrequirementsduringorderingprocesses.Thecompanywasabletogopublicwithin4years.
Dellmadeitsentryintothelaptopmarketin1991markinganaggressivegrowthrateinthefollowing
yearsbecomingoneofthetop5computercompaniesoftheworld.Dellbelievesinhighturnover
solutionswhicharealsoavailableontheirwebsite.Atechnologysavvyculturewithafocusonconsumer
needsdrivestheoperationsandinitiativesatthecompany.AnotherdrivingfactorforDellhasbeen
deliveringthecomputersdirectlytoconsumers.Thisbuildtoorderstrategyhasremovedthemiddleman,
increasingturnoversanddecreasingcostsforallpartiesinvolved.ThisallowsDelltosellatahighly
competitiverateascomparedtothecompetition.Itisthisconsumerdrivenculture,innovativevaluesand
costoptimizationthatsetsDellapart(Dell,1999).
CompanyCultureascitedbythecompanyswebsite(www.dell.com)includes
Meritocracy:Makingsurethatemployeesarerewardedfordoingagoodjobinordertoenforce
betterperformanceandmotivatethehumanresourceinmeetingmeasurableobjectives
DirectRelationships:Focusesonarelationshipintensivestrategyinternallyandexternally
makingsurethattheenvironmentisbasedontwowaycommunication
Empowerment:Oneofthemostcrucialfactorsofaninnovativecompanyisempowerment.
HighlyemployeeparticipationcultureisseenatDell.

SWOTAnalysis
Strengths
1.Thebusinessmodelofdellwhichfocusesonabuilttoorderframeworkwherethemiddlemanis
removedandPCsaresolddirectlytotheendbuyer
2.Strongstrengthofsalesstrategythroughavarietyofmediumsrangingfromconventionaltoe
commerce
3.Eliminationofthemarkupsaddedbytheresellingpartythroughthedirectsalestoendbuyer
resultinginlowercoststoconsumerwithoutcuttingdownmarginsforDell
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4.Reliabilitythatcomesoutofabuilttoordermodelreductionofoverheadsrelatedtolarge
inventoriesandfinishedgoods.
5.OneoftheindustryleadsinthePersonalComputermarket
6.Considerablenumberofmanufacturingunitsacrosstheworld
7.StrongbrandvalueandpowerinB2BaswellasB2C
8.Significantmarginsovercostsofproductionbecauseofthedirectsalestotheendbuyer
9.Ahighlyrelationshipintensivestrategystartingfromtheconsumersectorandextendingtothe
corporateandgovernmentsectors
10.Holdsalargeshareinthemarketofpersonalcomputers
11.Throughthebuilttoordermodelofproduction,Dellisabletoachieveaquickturnoveraswellas
decreasethestockrequiredintheinventory
12.Highlevelofqualityassurancethroughextensivetestingintheproductionprocess
13.Awidearrayofcustomersincludingspecificmarketsegmentssuchashospitalsanduniversities
14.ToprankedServeronInteltechnologybythepublicationTechnologyBusiness
15.Strongunderstandingofindividualcustomersegmentneeds
16.Widearrayofmethodsofadvertisingandmarketing
17.TherearenotalotofproductionunitsandregionalofficesinthewestincludingtheUnitedStates
18.ForsomeconsumersitisaninconveniencethatDellPCscannotbepurchasedthroughretailoutlets
19.Ithasnotbeenabletopenetrateintoseveralinternationalsegmentsasaleadingsuppliereven
thoughthenumberoflocationsintheinternationalmarketaregreat
20.IntheprintermarketitdoesnotproduceitsownproductsratherpurchasesitfromLexmark
21.Thereisastrongdependencyonoutsidesuppliersfromforeignlandswhichleadstoastrong
dependencyonfuelsupplyandtheirpricesleadingtofluctuation
22.Thesizeofthecompanycomesinthewayoffastergrowth
23.Thereisacontinuingdemandforpersonalcomputers
24.Thereisastrongandevolvingmarketfornotebooksandtablets
25.TherearestrongopportunitiesofpartnershipinthemarketincludingonepotentiallywithMicrosoft
26.Thereisastrongmarginofexpansioninconsumerelectronics
27.Consumerspendingontechnologyisrelativelyuntouchedcomparedtootherproducts
28.Stronggrowthinthemarketofcolorprinters
29.Therearemoremergersandacquisitionshappeningintheindustryathreatofstrong
consolidationtrendinthePCindustry
30.Theinfluenceanddependencyonoutsidesuppliersmeansincreasingoilpricesarecripplingthe
spendingoftheconsumersonPCs
31.ThedemandofcommercialusageofPCsarenotincreasingatthesamepace
32.Strongcompetitioncontinuestoactasathreat
33.Thegrowthofthemarkethassloweddown
34.Strongfluctuationinprice
35.Computingpowerfeeshasreduced
36.Themarkethaswidened
37.Thefluctuatingvalueanddevaluationofcurrencycontinuestohappenintheinternationalmarket

Weaknesses
Opportunities
Threats
Source:(Kharif,2005)and(Dell,1999)

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Weight

Rating

WeightedScore

Opportunities
Thereisacontinuingdemandforpersonal
computers

.1

.3

Thereisastrongandevolvingmarketfor
notebooksandtablets

.1

.4

.1

.4

.05

.1

.05

.1

.05

.1

.05

.15

.05

.15

.025

.05

.15

.45

.1

.2

.025

.1

.025

.075

.05

.15

.05

.1

2.85

KeyExternalFactors

Therearestrongopportunitiesofpartnership
inthemarketincludingonepotentiallywith
Microsoft
Thereisastrongmarginofexpansionin
consumerelectronics
Consumerspendingontechnologyis
relativelyuntouchedcomparedtoother
products
Stronggrowthinthemarketofcolorprinters
Threats
Therearemoremergersandacquisitions
happeningintheindustryathreatofstrong
consolidationtrendinthePCindustry
Theinfluenceanddependencyonoutside
suppliersmeansincreasingoilpricesare
cripplingthespendingoftheconsumerson
PCs
ThedemandofcommercialusageofPCsare
notincreasingatthesamepace
Strongcompetitioncontinuestoactasathreat
Thegrowthofthemarkethassloweddown
Strongfluctuationinprice
Computingpowerfeeshasreduced
Themarkethaswidened
Thefluctuatingvalueanddevaluationof
currencycontinuestohappeninthe
internationalmarket

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Total

InternalFactorEvaluation(IFE)Matrix

Key
Internal
Factors

Weight

Rating

Weighted
Score

.4

.15

.075

Strengths
Thebusiness
.1
modelofdell
whichfocuses
onabuiltto
order
framework
wherethe
middlemanis
removedand
PCsaresold
directlytothe
endbuyer
Strong
.05
strengthof
salesstrategy
througha
varietyof
mediums
rangingfrom
conventional
toecommerce
Eliminationof
.025
themarkups
addedbythe
resellingparty
throughthe
directsalesto
endbuyer
resultingin
lowercoststo
consumer
without
cuttingdown
marginsfor
Dell
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Reliabilitythat
comesoutofa
builttoorder
model
reductionof
overheads
relatedtolarge
inventories
andfinished
goods.
Oneofthe
industryleads
inthePersonal
Computer
market
Considerable
numberof
manufacturing
unitsacross
theworld
Strongbrand
valueand
powerinB2B
aswellasB2C
Significant

marginsover
costsof
production
becauseofthe
directsalesto
theendbuyer
Ahighly
relationship
intensive
strategy
startingfrom
theconsumer
sectorand
extendingto
thecorporate
and
government
sectors
Holdsalarge
shareinthe
marketof
personal
computers
Throughthe
builttoorder
modelof

.05

.15

.1

.4

GoogleHostingService
CustomDomain&BuildYourOwnSiteStartWithAFree30DayTrial.

.05

.2

.05

.2

.05

.15

.025

.075

.05

.15

.05

.15

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production,
Dellisableto
achievea
quickturnover
aswellas
decreasethe
stockrequired
inthe
inventory
Highlevelof
.05
quality
assurance
through
extensive
testinginthe
production
process
Awidearray
.05
ofcustomers
including
specific
market
segmentssuch
ashospitals
and
universities
Topranked
ServeronIntel .05
technologyby
thepublication
Technology
Business
Strong
understanding .025
ofindividual
customer
segmentneeds
Widearrayof
.025
methodsof
advertising
andmarketing

Weaknesses
Therearenot
alotof
production
unitsand
regional
officesinthe
west
includingthe
UnitedStates

.15

.2

.2

.075

.1

.025

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.05

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Forsome
consumersitis .025
an
inconvenience
thatDellPCs
cannotbe
purchased
throughretail
outlets
Ithasnotbeen
.05
ableto
penetrateinto
several
international
segmentsasa
leading
suppliereven
thoughthe
numberof
locationsin
the
international
marketare
great
Intheprinter
marketitdoes .025
notproduceits
ownproducts
rather
purchasesit
fromLexmark
Thereisa
.05
strong
dependency
onoutside
suppliersfrom
foreignlands
whichleadsto
astrong
dependency
onfuelsupply
andtheir
pricesleading
tofluctuation
Thesizeofthe
.025
company
comesinthe
wayoffaster
growth

Total

1.00

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.025

.1

.025

.1

.025

3.15

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TWOSMATRIX

Strengths
Weaknesses
1.Thebusinessmodelofdell
1.Therearenotalotof
whichfocusesonabuiltto
productionunitsand
orderframeworkwhere
regionalofficesinthe
themiddlemanisremoved
westincludingthe
andPCsaresolddirectly
UnitedStates
totheendbuyer
2.Forsomeconsumersitis
2.Strongstrengthofsales
aninconveniencethatDell
strategythroughavariety
PCscannotbepurchased
ofmediumsrangingfrom
throughretailoutlets
conventionaltoe
3.Ithasnotbeenableto
commerce
penetrateintoseveral
3.Eliminationofthemark
internationalsegmentsasa
upsaddedbythereselling
leadingsuppliereven
partythroughthedirect
thoughthenumberof
salestoendbuyer
locationsinthe
resultinginlowercoststo
internationalmarketare
consumerwithoutcutting
great
downmarginsforDell
4.Intheprintermarketit
4.Reliabilitythatcomesout
doesnotproduceitsown
ofabuilttoordermodel
productsrather
reductionofoverheads
purchasesitfromLexmark
relatedtolargeinventories
5.Thereisastrong
andfinishedgoods.
dependencyonoutside
5.Oneoftheindustryleads
suppliersfromforeign
inthePersonalComputer
landswhichleadstoa
market
strongdependencyonfuel
6.Considerablenumberof
supplyandtheirprices
manufacturingunitsacross
leadingtofluctuation
theworld
6.Thesizeofthecompany
7.Strongbrandvalueand
comesinthewayoffaster
powerinB2Baswellas
growth
B2C
8.Significantmarginsover
costsofproduction
becauseofthedirectsales
totheendbuyer
9.Ahighlyrelationship
intensivestrategystarting
fromtheconsumersector
andextendingtothe
corporateandgovernment
sectors
10.Holdsalargeshareinthe
marketofpersonal
computers
11.Throughthebuilttoorder
modelofproduction,Dell

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isabletoachieveaquick
turnoveraswellas
decreasethestock
requiredintheinventory
12.Highlevelofquality
assurancethrough
extensivetestinginthe
productionprocess
13.Awidearrayofcustomers
includingspecificmarket
segmentssuchashospitals
anduniversities
14.ToprankedServeronIntel
technologybythe
publicationTechnology
Business
15.Strongunderstandingof
individualcustomer
segmentneeds
16.Widearrayofmethodsof
advertisingandmarketing

Opportunities

WOStrategies

SOStrategies
1.Thereisacontinuing
demandforpersonal
computers
2.Thereisastrongand
evolvingmarketfor
notebooksandtablets
3.Therearestrong
opportunitiesof
partnershipinthemarket
includingonepotentially
withMicrosoft
4.Thereisastrongmargin
ofexpansioninconsumer
electronics
5.Consumerspendingon

technologyisrelatively
untouchedcomparedto
otherproducts
6.Stronggrowthinthe
marketofcolorprinters

1.Expansionintensive
strategyintothepersonal
computeraswellaslaptop
Market[Combinationof
Strength1,Strength5,
Opportunity1]
2.Strategizesuchthatall
futuredevelopmentsarein

linewiththeevolving
technologyandfocusona
corporatesocial
responsibilityagenda
(Strengthnumber14and
Opportunitynumber1)

1.Thedevelopmentof
furtherproductionunitsas
wellasretailunitsinthe
UnitedStates[A
combinationofWeakness
1,Weakness3and
Opportunity5]

1.Diversificationstrategy
towardstheprintermarket
intothecolorprinters
includingdevelopmentof
internalcapabilities
[Weakness4and
Opportunity6]

Threats

WTStrategies

STStrategies
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1.Therearemoremergers
andacquisitions
happeningintheindustry
athreatofstrong
consolidationtrendinthe
PCindustry
2.Theinfluenceand

dependencyonoutside
suppliersmeansincreasing
oilpricesarecripplingthe
spendingoftheconsumers
onPCs
3.Thedemandof
commercialusageofPCs
arenotincreasingatthe
samepace
4.Strongcompetition
continuestoactasathreat
5.Thegrowthofthemarket
hassloweddown
6.Strongfluctuationinprice
7.Computingpowerfeeshas
reduced
8.Themarkethaswidened
9.Thefluctuatingvalueand
devaluationofcurrency
continuestohappeninthe
internationalmarket

1.Provideattractivepricing
anddiscountingpackages
onspecificproductstothe
B2Cmarket[A
combinationofstrength9
andThreat4]

1.Countercompetitionand
increasingmarketshareby
penetratingintotheAsian
andEuropeanmarketfor
leadingsupplierposition
inmaximumlocations[A
combinationofweakness
3andthreat1]

Lifecycleofthefirmsindustry
Stage1:DevelopmentoftheProduct
Thefirststageofthelifecycleismarkedbyaresearchintensiveandsecretiveprocess.Themorethe
innovationinaPCcompany,suchasapple,themoreinvestmentgoesintotheresearchprocess.Code
nameareusuallyutilizedwithoutnamingittillitsdevelopedcompletely

Stage2:AnnouncementoftheProduct
Thisstageisnottobemixedwiththeactualproductintroductionstage.Thepurposeistobringthemedia
andbiggunstoaneventandannouncewhatwillbecomingthroughinthenearfuture.Theproductdoes
notalwaysreachitsfinalshapeatthetimeofannouncementoftheproduct.

Stage3:IntroductionofProduct
Theintroductionoftheproductisthestagewhenthefinalproductisreadytobedeliveredtothe
consumers.Atthetimeofannouncement,thesupplyoftheproductisnotthathighandexpensiveinorder
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tohitbigprofits.Atthispointoftime,anewproductisalsostartedtobedevelopedwhichmeansStage1
ofafutureproductstartsattheStage3ofthenewproduct.

Stage4:Maintenance
Itisduringthisstageofthelifecyclethatthepricestartsdecreasingandthesupplyincreasesgetting
evenwiththeactualdemandinthemarket.TheproductswillbesendtoallmajorsalespointofDell
aroundtheworldatalowercostthanbefore.Itisatthisstageofthenewproductthatthefutureproductis
announced.

Stage5:Retirement
SinceDelloperatesinahighlytechnologicalenvironment,changesandadvancementarefrequentwhich
resultsinarelativelyquickerretirmenetofproducts.Thisisnowreplacedbytheintroductionofthe
productwhichincorporatesnewtechnology.

Identificationofenvironmentalchanges
PoliticalFactors:
Thepoliticalfactorsincludelegislature,governmentregulationsandotherrestrictions/provisionsof
politicalnature.ThisdirectlyimplicatestheconditionsunderwhichDellhastooperate.Politicalfactors
havecausedcertainrestraintsfromtimetotimebecauseofthepoliticalinstability.Someofthepolitical
factorsincludetheonesthatcomeasadirectresultofsigningofWorldTradeOrganizations.Market
accessisonesuchfactor.Forexample,TexasandMalaysia,twoofthetopchoicesforDellintheregion
arecentraltoU.STennesseandtoAsiaPacificrespectively.Ireland,anotherhubofDell,isinclose
proximitytoUnitedKingdom,Germanyandfrance.Tarrifffreeaccesstomarketsareoneofthebiggest
politicalincentivestoDell.Politicalchangeswhichcauseanimpactonmarketaccessandtheirconditions
canhaveconsequencesonpricingstrategyofDellaswellassupplychoices.Politicalincentivessuchas
taxholidaysprovidedbyMalaysiaareanothersuchpoliticalfactor.Lowcorporatetaxes,financial
incentives,landsupportandpercapitagrantsperemployeeareothersuchfactorswhichcontributetothe
politicaldynamicsoftheoperatingenvironmentforDell.

Economic
Theeconomicsituationaroundtheworld,inspecificregionshaveadirectimpactontwothings.A)The
changingeconomicsituationandlandscapehasadirectimpactonthepricingstrategyandprofitmargin
ofDellandB)Economicturmoilssuchastheonefacedrightnowbytheworlddecreasesconsumer
powertobuytheDellproducts.CurrencyfluctuationandChangesinOilpricesareanotherfactorwhich
causesstrongdisruptioninpricingmodelsofDell.Strongdependencyonforeignsupplymeansthesetwo
factorsbecomeallthemorecritical.

Social
Demandforcomputershasastrongdependencyonseveralsocialfactors.Oneofthemostcriticalofthese
socialfactorsisthelevelofeducationthatprevailswithinacountry.Highereducationstandardsleadto
strongdemandforthePCsaroundtheglobe.

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TECHNOLOGICAL
Technologicalchangesinenvironmentincludetheadvancementofcomponents,moreefficientparts,
internetaccess,newerwaystomarkettheproductandthepaceatwhichproductskeepgettingsmallerand
faster.ThischangeinspeedandsizeiscentraltothechangesthatarerequiredonaregularbasisbyDell
inordertokeepupwiththebusinessenvironment.
Source:(Kharif,2005)

Strategicgroupmapcompetition
ProductPositioningMap
HP:HPistheclosestcompetitiontoDell.WithastrongadvantageoverDellinthesegmentofPrinters,
ithasanedgeonthatfront.OntheotherhandDellcontinuestohaveanedgeintermsofitscompetitive
priceoverHP.Theweakness,however,remainsintheprintersegmentinfrontofHP(SchmidandKelber,
2005).
IBM:
DellandIBMdonothaveconflictingtargetmarketsegments.However,IBMseemstohaveabetter
penetrationintotheAsianmarketaswellasbetteraccesstocheaperwagerates.Oneofthemost
importantcompetitiveedgeforIBMistheservermarket(SchmidandKelber,2005).
AppleComputers:
AppleisoneofthemostinnovativefirmsinthePCmarket.TheirtargetmarketisdifferentfromDellas
well.Theyaremoreinnovativeandselltheproductsonpremiumprices.Leadingedgedesignandlow
varietyinproductsarethefeaturesofApple.
Note:Theproductpositioningisbasedoncustomizationandcost.Customizationisseenasthevarietyin
productportfolioaswellasthecustomizablespecificationswithinoneproduct.

ProductPositioningMap
Expensive

Apple

CustomizableHPGeneric

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Dell

IBM
Inexpensive

Recommendations
Recommendationsforstrategyimplementation
Dellsstrategyhasbeenfocusedonbuildingcomputersthatcanbeorderedbyconsumersthrougha
stronginternalcapabilityofmanufacturingandquickinventoryturnarounds.Thisbuildtoorderstrategy
hasbeenthedifferentiatingfactorforDellforthepastfewdecades.Theremovalofthemiddlemangives
ithighmarginindirectsalesaswellasprovideslowcoststoitsconsumers.Oneofthestrongstrategic
advantagesforDellhasbeenitsabilitytoadapttochanges.AsanemployerDellhasfocusedonastrong
relationshipwithemployees,focusingontheirmotivation,wellbeing,rewardstrategyandempowerment
strategy.Itsstrategicsupplychainmanagement,dataintegrationwithsuppliers,relationshipintensive
approachandintegratingphysicalstoresaleswithonlinesaleshasmadesureDellcontinuestogrowatan
exceptionalrate.
ThefollowingarerecommendedasstrategiclineofactionforDell
1.AninvolvementinCSRactivitiesincludingaGreenCampaignforcollectionofoldPCs/electronic
equipmentforrecycling/dispositioninanenvironmentalfriendlyway.Thiswillleadtobetterimage
inthesocietyaswellassustainabledevelopmentandcostefficiencyinthelongterm
2.Aseriesofinternalmarketingeffortstomaintainahighlyinnovativeculturewithintheorganization
forareenforcementofitsemployervaluesforhighperformancemanagementandemployee
participation.
3.VentureintoR&Dpartnershipwithanestablishedcompanysharingintellectualresourcesandthe
hardwareinfrastructureofDelfordevelopmentoftechnologysavvyproductsforfuture.
4.BuildingmoremanufacturingplantsaroundtheworldandspecificallyintheUS.Globalexpansion
shouldbemetwithregionspecificcapacitybuildingaswellastoreducesupplychain
costs/complicationsanddependencyonexternalfactor
5.Internalcapacitybuildingforthedevelopmentofprinterproductsinordertocutdownitscosts,
increasequalityandincreasemarketshareincompetitiontoHP.

Conclusion
Theindustryofpersonalcomputers,laptopsandrelatedhardwareisonewhichevolvescontinuously.The
resultofglobalization,politicalincentivesandtechnologicaladvancescanbeseenonaregularbasis.This
meansthatareassessmentofstrategyforalltheplayersintheindustryisimportantinordertokeepthe
respectivecompetitiveadvantagegoing.Dellsstructureallowsforefficiency,costoptimization,
customerrelationshipintensivestrategiesandoptimumsupplychain.Thisreportassessedthestrategic
directionthatDellhasbeentakingonthebasisofitsexternalenvironmentandinternal
capabilities/limitations.ThroughTWOS,PEST,positioningmapsandinternal/externalkeyfactor
evaluation,thereportcameupwithafivepointrecommendationfocusingonresearchanddevelopment,
productionplants,internalcapabilitydevelopment,highperformancemanagementandcorporatesocial
responsibility.

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References

Dell,M.(1999).DirectFromDell:ChairmanandChiefExecutiveOfficer,DellComputer
Corporation.Collins
Kharif,O.(2005).Dell,TimeforaNewModel?BusinessWeek
Schmid,N.andKelber,A.(2005).TheDellCompanyAStrategicAnalysis.Management
Seminar.Hochschule
www.dell.com
www.hp.com

RELIABLE,
POWERFUL SERVER
softlayer.com/servers

More Power, Faster to Provision and


More Customizable Servers
Available

www.ibm.com

FiledunderGeneralManagement,InternationalMarketing,Marketing,StrategicManagementTagged
withDell,DellStrategicManagement,DellSWOT,DellVision,ExternalEnvironmentAnalysis,
IndustryOverview,MarketingAnalysis,OrganizationalStructureofDell,PCIndustryOverview,
PESTELAnalysis,ProductPositioningMap,SWOTAnalysis
Comments

OneResponsetoDellStrategicManagementAssignment/CaseStudySolution

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JoyceMakgethosays:
May12,2012at12:49pm

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thiswasveryhelpfulinmyassignmentasididnotknowwheretostart.itgavemeguideanceandlightto
startandfinishmyassignment.thanksomuch.
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