Marketing analysis of computer hardware (DEll)

Master of Commerce

(M.COM 4th Sem.)

FROM
Silicobyte Katni Degree College of Computer Science,Katni (M.P.)

Under

Rani Durgavati Vishvidhalya,Jabalpur(M.P)

NAME OF THE GUIDE

NAME OF

STUDENT
PRO. PANKAJ SIR
SIGN.

POOJA GOYANKA
SIGN.

..

Roll No. .

(Self Certificate)

I Am Pooja Goyanka Daughter of

Mr.Rajkumar Goyanka certify that the project
report

Marketing

Hardware

(DELL)

Analysis
prepared

of
by

Computer
me

is

my

personal and an authentic work under the

guidance of Shri Pankaj Sir (Department of
Commerce).

Pooja
Goyanka
M.Com. IVTH SEM (Marketing)

It is to certify that Pooja Goyanka has

visited our shop for her project work. During
the project work her work and behavior was
satisfactory. on the basis work done by her
marks awarded
out of

Date: -

Signature:-

Place: - Katni

Name: -

Designation:
Office/Institution:
- ..

This is

Marketing
(DELL)
of

to

Analysis

certify that the project titled

of

Computer

Hardware

submitted in partial fulfillment of the Master

Commerce

Vishvidhalya

(M.com)

Jabalpur

from

through

Rani

Durgawati

Silicobyte

Katni

Degree College of Computer Katni (M.P.) has been

developed by Pooja Goyanka is an authentic work
carried out under my guidance. The matter embodied
in this project work has not been submitted earlier for
award of any degree or diploma to best of my
knowledge and belief.

Name of the Project g

Pankaj Saksariya

Date: - 06/06/2014

I obey great many thanks to a great

many people who helped an supported me
during the writing of the project.
My

deepest

thanks

to

hectraye

of

Pankaj Seksariya the guide of the project for

guiding and correcting Various document of
mine with attention and cafe . He has

taken

pain to thought

make

necessary

the project and

correction

as ad when needed. I

express my thanks to the University of Rani

Durgavati Vishvidhalya Jabalpur for extending

his support.
I

would

silicobyte

also

Katni

thanks

Degree

my

Institution

college

any

my

faculity member
Mr. Aashutosh Shukla , Miss. Rishu Agrawal
(Principal)

we

get

the

more

information

through this project conducted

by Rani

Durgavate Vishya Vidhalya which is essential

for our bright future.

Pooja
Goyanka
M.Com. IVTH SEM (Marketing)

Title
of
the Project: -

Marketing Analysis of Computer Hardware (Dell)

Purpose of the Project: -Ans. This is era of computer.

Not even one field

work without computer. Various fields like banking, hospitals, schools, offices of any
company has computer. As its permanent equipment. And hardware makes computer. Thus, I
choose marketing of this important product.

Project is Related to private/Government Sector

Description: -

I.
II.
III.

Topic marketing analysis of computer hardware (Dell).

Project is related to private sector.
Motivate by my inspiration for this topic is my college, silicobyte katni degree college.
and Mr. pankaj seksariya & aashutosh shukla sir also support me for choosing this project.
After learning computer during my graduation I felt
myself capable of working. In any office as my carrier. As no field works without computer.
Thus, I choose marketing of computer hardware.

IV. Some minimum requirement of the project title:

a. Educational quantification at least should be 12th pass out
b. Technical Quantification fair 2 good knowledge of parts & hardware and should also be
aware of fundamentals of marketing.
c. Experience - its compulsory for good result
V. Requirement of higher qualification for the topic: - no need of any specific higher
qualification but some short term courses of hardware done by candidate. It is good for
VI.
VII.

hardware related work.

Information of competitive exam training etc. which is related project: - Competitive
exams are not necessary for this project. But training is must and useful for this project.
Visited place whether private and govt. together information about the project
Royul computers
C. no. 9993882555
Name :- Aashish Goyanka

Kanak cyber caf

C. no. 9993909789

Name: - Abhay Singh

Arvind Technologies
C.no. 07622-401993
Dushyant Gupta

VIII.

Visited place name/ date/ information and contact no.

Royul computers
C. no. 9993882555
Name: - Aashish Goyanka
Information: - there I collected information about dell, that how many
type of products and hardware available in dell.
Kanak cyber caf
C. no. 9993909789
Name: - Abhay Singh
Information:-I got warranty related knowledge about dell, that
which type of warranty dell company provide.
Arvind Technologies
C.no. 07622-401993
Dushyant Gupta
Information: - about warranty extend knowledge
1. Warranty plus knowledge.
2. Warranty extends knowledge.

INDEX
Introduction
Company background
Overview of Dell
DELLS MARKETING STRATEGY
Situational Analysis
SWOT analysis of DELL
Objectives & Strategy Development
History of Dell Computer Corporation
Computer Weekly report: Dell
Key Facts about Dell
Dell whitepapers from Tech Targets research library
Key UK customers
Dell net revenue growth and product vs services revenue
Conclusion
BIBLIOGRAPHY

DELL COMPANY
Introduction

Dell Company was established in November 4, 1984. It is an

American multinational information technology corporation based in Round Rock, Texas, and
United States that develops, sells and supports computers and related products and services. The
company is one of the largest technological corporations in the world, employing more than
103,300 people worldwide. The name of its founder is Michael Dell. He was the youngest CEO to
guide a company to a Fortune 500 ranking.
Since the first Dell PC was introduced in 1986, Dell has continued to shape the industry by
breaking new ground and pioneering critical developments in home, small business and enterprise
computing. The industry of Dell inc. consist of computer systems, computer peripherals, computer
software, IT consulting andIT services.
Although Dell company is an industry leader in personal computers, thats just one
component of their technology portfolio. To really take advantage of the possibilities their industry
provides, they branched out into an innovative array of products and services. At Dell, everyone
can experience multiple business units, groups, teams and positions. The products that produce by
the

company

including desktops, servers,notebooks, netbooks, peripherals, printers, televisions, scanners, stora

ge and smart phones.
In 1984, Michael Dell founds Dell Computer Corp.1988, Dell holds initial public offering
of 3.5 million shares of company stock.1989, Dell join the mobile computing revolution with its
first laptop computer, the 316TR. 1994, company introduce the Dell Power Edge server line and
Lithium-ion battery. 2002, the

3100MP projector signal Dells entry into the projector market. 2006, Dell company is the first in
the industry to offer free product recycling for consumers worldwide. In 2008, Dell launches first
Modular Data Center. 2009, Dell enters the smart phone market with the Mini 3i from China
mobile, Adoma and Latitude Z laptops are produce. 2010, Del enters the tablet arena with the
Streak, a 5-inch device designed. In 2011, Dell acquire compel lent, a rapid growing storage

solution provider, to expand their enterprise storage portfolio, and help the customers better
manage data growth, reduce storage costs.
The main business of Dell Company is selling the product of laptops, net books and desktops. Dell
Company is selling different kinds of models of laptops for the customers to choose such as
Inspiron Laptops, XPS Laptops, Alien ware Laptops and more. Different kinds of models have
different functions, sizes, colour and price. Customers have more choices to choose the laptops for
themselves.

What is Dell?
Dell, Incorporated is a computer hardware manufacturer and distributor. The company is
one of the world's largest computer distributors in terms of both quantity of units sold and gross
income, and one of the United States' largest corporations. From 1999 until 2006 Dell delivered
more complete computer systems worldwide per quarter than any other PC manufacturer.
However, a bad reputation stemming from poor customer support had seen Dell's market shrink,
with rival Hewlett-Packard outselling Dell for the first time in Q4 2006. Dell is now attempting to
improve its image with Linux-based desktop and laptop models, a community-driven idea
generation website, and a move to less expensive AMD processors. Most of Dell's products are
IBM PC-compatible desktop, laptop, and server computers using Intel or AMD processors. The
company also markets a
line of HTC-produced handheld computers hand, rebranded computer peripherals such as
keyboards and mice, and Sony-developed monitors and televisions. Other Dell-branded
peripherals such as scanners and printers are

often designed in-house with production outsourced. Dell also distributes third-party hardware
such as gaming consoles from Sony, Nintendo, and Microsoft. Often Dell will market via the

company website third-party devices that compete with its own products, such as the
Palm Tungsten handheld that competes with Dell's own Axim line.
Dell Computer was founded as PC's Limited in 1984 by university student Michael Dell.
Selling assembled computers from his dormitory room, Michael abandoned the university during
the planning stage of his first in-house computer design in 1985. The company was so successful
that within two years PC's Limited had distribution offices in Europe, and changed its
grammatically-incorrect name to Dell Computer Corporation. By 1991, seven years after selling
it's first computer, Dell Computer Corporation was listed in the Fortune 500. With much
experience in mail order telephone sales, Dell was one of the first companies to offer computers
for mail order via the Internet. The Dell Coupon program made many Internet models cheaper
than other brands, and continues to be popular to this day.

Company Perspectives
Dell's mission is to be the most successful computer company in the world at delivering
the best customer experience in markets we serve. In doing so, Dell will meet customer
expectations of: highest quality; leading technology; competitive pricing; individual
and company accountability; best-in-class service and support; flexible customization
capability; superior corporate citizenship; financial stability.

Name

Dell Inc.

Industries served

Computer hardware, Computer

software, IT consulting, IT

Geographic areas served

Headquarters
Current CEO
Revenue
Profit
Employees
Main Competitors

services
Worldwide
U.S.
Michael Dell
$ 63.07 billion (2012)
$ 3.49 billion (2012)
110,000
Apple Inc., Samsung Electronics
Co., Ltd., Lenovo Group Limited,
Hewlett-Packard Company, Sony
Corporation, Fujitsu Limited and
many others.

Company background
Dell Inc. is an American multinational computer technology corporation that develops, sells,
repairs and supports computers and related products and services. The company is one of the
largest technological corporations in the world and is listed as number 44 in the Fortune 500 list.
It is the third largest PC vendor in the world after HP and Lenovo.

Overview of Dell

Dell (Nasdaq: DELL) was founded as PCs Ltd in 1984 and has since grown to become the
number two provider of PCs in the world (HP is number one). The company, which ships roughly
140,000 systems per day, built its success on the direct sales model, which it refined to work on the
internet. Dell was the first major systems vendor to factory install Red Hat Linux on corporate
systems.
The company, which is the worlds leading provider of flat panel displays, has about two
billion interactions with its customers each year. It ranks 38th in the Fortune 500 down four
places from three years ago. Dell produced profits of $1.4bn revenues on $52.9bn in revenues
during fiscal 2010. Its net profit margin during that fiscal year averaged 2.71%. The company,
which has a committed sustainability programme, shipped the first environmentally friendly
EPEAT Gold standard notebook, and powers its global headquarters entirely with green energy. It
offers free computer recycling to consumers worldwide, and also launched two initiatives, called
Plant a Tree for Me, and Plant a Forest for Me (the corporate version), which are designed to
offset computer purchases with tree planting.

DELLS MARKETING STRATEGY

Dell is one of the largest organizations in the world with respect to its personal Computer
products. The success of the organization has been because of its ability to reduce costs and create
a streamlined supply chain management system. The organization has been able to offer cost
effective personal computers to customers. It has a direct business model that ensures that
computers can be configured according to customer specifications and directly delivered to them.
This has helped Dell to become an industry leader for many decades. It has created the conditions
for loyal customer base and ensured its success in a competitive industry. Dell faces significant
threats in the form of declining PC sales. It cannot focus on limited products while it has to
rebrand itself so that it can invest in software and enterprise solutions. Dell needs to have clear
and precise goals. It needs to have a complete strategy for success, which is based upon efficiency
and effectiveness. It needs to develop a comprehensive approach, which is based upon attaining
strategic excellence within a short period of time.

Situational Analysis

Internal Analysis
Dells business model is based upon creating a direct model according to the Requirement of
its customer segments. This is done as a means of ensuring that the Organization maintains its
competitive advantage in the computer industry. Dell knows that it cannot afford to own different
parts of the value chain. The direct business model ensures high levels of speed and reliability. It
reduces the inventory while bypassing the need for dealers. It sells products directly according to
the customers specifications. This has enabled the organization to reduce the costs and risks of
moving large finished goods inventories. (Smith, 2012)

Competitor Analysis
Dells primary competitors include HP, Acer, and Lenovo. All of these Organizations have
sought to find ways in which they can reduce prices. They have ensured that innovative strategies
are designed as a means of combating the low costs of Dell. The price differential, which Dell has
been known for, is slowing eroding because of innovative strategies. (Haag, 2006)
The competition within the computer industry is very swift which means that Dell might lose
its future competitive advantage. Dell currently has 18% share of the personal computer market
when compared with HP, which has overall 15% share. It is considered to be the third largest
personal computer vendor in the world. HP is slowly eroding the competitive advantage of Dell
through its innovative strategies. Additionally, Dell is suffering from a decline in PC shipments
while its share in the server market has also reportedly decline. (Cooper, 2006)

Dell is also suffering from competitors like Apple which is a market leader in technology
and innovation. Apples emphasis on tablet computers and smart phones is slowly eroding the
competitive advantage of Dell, which continues to focus on personal computer products.

Market Analysis

Dell has been successful in the market because of its loyal customer base and diversified
product portfolio. The organizations main products are personal computers, servers, network
equipment, software, and computer peripherals. It also offers cameras, printers, and other
electronics. (Matear, 2002)
Dell has created a flexible supply chain management system so that its key goals can be
attained. It has been using online commerce to increase its sales and revenues. Its build-to-order
processes ensure that customers receive products according to their specifications. (Halldorsson,
2003)

Customer Analysis
Dells customers belong to diverse sectors but the youth represent its main customers. It
has aggressive marketing strategies in order to target the young people. This is in line with its
belief that technology can be easily promoted among the young customers. Dell has used clear
and specific objectives in order to achieve its critical goals. It has crafted a superior business
strategy that is based upon achieving efficiency and effectiveness. (Halldorsson, 2007)

Environmental Analysis
Dells business environment has become highly competitive because of the changes in social,
political, and economic trends. The ongoing economic recession has reduced customer spending

and forced businesses to cut down their costs. Dell has also suffered from this and has been forced
to scale down its operations.
Another serious threat is that new players are emerging in the market with the popularity of
tablet PCs and smart phones. These devices are new generation, which offers computing power in
a versatile and smart manner. Hence companies like Dell are forced to make changes that will
enable them to compete effectively in the market. (Munroe, 2011)

SWOT analysis of DELL

Dell SWOT analysis 2013
Strengths
1.

Brand name valued at $7.5 billion

2.

Product customization

3.

Environmental record

4.

5.

Competency in mergers and

acquisitions
Direct selling business model

Weaknesses
1. Commodity (computer hardware)
products
2. Poor customer services
3. Low investments in R&D
4. Weak patents portfolio
5. Too few retail locations
6. Low differentiation

Dell is one of the worlds best and most known brands. So is it all a rosy picture for dell.
This SWOT analysis of Dell points out chinks in Armour of dells fortress.

Opportunities

Threats

1.

Expand services and enterprise

solutions businesses

1.

Growing demand for

Smartphones and tablets

2.

Obtain more patents through

acquisitions

2.

Profit margin decline on

hardware products

3.

Strengthen their presence in

emerging markets

3.

Slowing growth rate of the

laptops market

4.

Tablet market growth

4.

Intense competition

Strengths
Brand name. Dell has a very strong brand reputation for quality products. Its brand is
valued at $ 7.5 billion.
Product customization. Dell allows its customers to customize their laptops. Such services
were not originally found within any other major computer retailer (and currently only Sony
and Toshiba allow that), but add great value to the customers and provides Dell with a
competitive advantage.
Environmental record. Dell is engaged in many green initiatives and has received many
rewards for being an eco-friendly business. This is a benefit when working with public and
government agencies.
Competency in mergers and acquisitions. Over the last five years Dell has spent $13
billion for successful mergers and acquisitions, which brought patents, new capabilities,
assets and skills to the business.
Direct selling business model. Dell doesnt sell its products through big-box retail outlets
but instead sells directly to consumers and enterprises, keeping their already thin profit
margin to themselves.

Worlds 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 remarkably low operating cost relative to revenue because it cuts out the retailer
and supplies directly to the customers.

Dells Direct Model approach enables the company to offer direct relationships with
customers such as corporate and institutional customers.

Dells direct customer allows it to provide top-notch customer service before and after the
sale.

Each Dell system is built to order to meet each customers specifications. Reliability,
Service and Support.

Dell boasts a very efficient procurement, manufacturing and distribution process allowing it
to offer customers powerful systems at competitive prices.

Dell is able to introduce the latest relevant technology compared to companies using the
indirect distribution channels.

Dell is not a manufacturer; Components are made by the suppliers and Dell assembles the
computers using relatively cheap labor. The finished goods are then dropped off with the customer
by courier. Dell has total command of the supply chain.

Dell turns over inventory for an average of every six days, keeping inventory costs low.

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.

Weakness
Commodity products. The large stream of Dells revenues comes from computer, especially
laptop, sales, which is a commoditized product. Computer hardware (commodity) products
are sold with a very low profit margin.
Poor customer services. Once praised, Dells customer services deteriorated due to
outsourcing its call centers offshore. Dell invested a large sum of money in fixing this, but
hasnt yet regained its previous reputation for customer services.
Low investments in R&D. The company spends a much lower percentage of its income on
R&D that its main competitors and thus, missed an opportunity to develop strong products
for smartphones and tablet markets as well as to learn new skill and capabilities.
Weak patent portfolio. Due to low spending on R&D Dell hasnt acquired a strong portfolio
of patents and is now finds it hard to compete in lucrative smartphones and tablets market.
Too few retail locations. Selling products online saves money and allows for product
customization but provides less visibility for the products. The consumer finds it hard to
trust the products if it cant hold it first in his hands.
Low differentiation. Low price was once Dells competitive advantage but the company is
no longer able to provide competitive prices. Apart from the price, Dells products are little
differentiated from competitors products and are in competitive disadvantage if the price
offered by competitor is lower.

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. Dells sales revenue from
educational institutions such as colleges only accounts for a merely 5% of the total.

Dells focus on the corporate and government institutional customers somehow affected its
ability to form relationships with educational institutions.

For home users, Dells direct method and customization approach posed problems. For one,
customers cannot go to retailers because Dell does not use distribution channels.

Customers just cant buy Dell as simply as other brands because each product is custombuilt according to their specifications and this might take days to finish.

Opportunities

 Expand services and enterprise solutions divisions. Dell provides various services (cloud,
security and infrastructure) and enterprise solutions (servers, networking and storage),
which are the most profitable Dells business at the moment. Dell business should focus on
growing these divisions as they promise better growth opportunities and higher profit
margins.
Obtain more patents through acquisitions. If Dell wants to diversify, it needs new
technology patents and new ideas. Dell hasnt properly established its R&D facilities to
discover new technologies and patents, so the only feasible way to obtain patents and
technologies is to acquire other companies.
Strengthen their presence in emerging markets. Emerging economies are the fastest
growing markets for laptops, tablets and other electronic devices. Dell has a good presence
in these markets but should strengthen its position as the company experiences declining
market share.
Tablet market growth. Tablet market is expected to grow in double digits for the next few
years and the company has a great opportunity to release new tablet models and benefit
from the market growth.

Diversification strategy by introducing many new products to its range.

Personal computers are becoming a necessity now more than ever. Customers are getting
more and more educated about computers. Second-time buyers would most likely avail of Dells
custom-built computers because as their knowledge grows, so do their need to experiment or use
some additional computer features.

The internet also provides Dell with greater opportunities since all they have to do now is to
visit Dells 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. It is also more convenient for customers to shop online than to actually drive and do
purchase at a physical store.

Threats
Growing demand for smart phones and tablets. With a lower price and strongly improved
capabilities, consumers often choose tablets and smart phones over laptops. The growing
demand for the previous devices takes a share out of laptops, the main stream of revenue for
Dell.
Profit margin decline on hardware products. Dells main income is from selling hardware
products, which prices will increase in the future due to rising raw material prices. This will
add to costs for Dell and will further cut the profit margin.
Slowing growth rate of the laptops market. Growth rate of the computer market is slowing
down and in the near future the markets will become saturated. It will prove hard for Dell to
compete in such market or at least fight back the lost market share.
Intense competition. The company faces intense competition in all its business segments. It
competes in terms of price, quality, brand, technology, reputation, distribution and range of
products, with Acer, Apple, HP, IBM, Lenovo and Toshiba.

Competitive rivalry that exists in the PC market globally.

New entrants to the market pose potential threats.

The threat to become outmoded is a pulsating reality in a computer business.

Price difference among brands is getting smaller.

Dells Direct Model attracts customers because it saves cost. Since other

companies are able to offer computers at low costs, this could threaten Dells priceconscious growing customer base.

With almost identical prices, price difference is no longer an issue for a customer. They
might choose other brands instead of waiting for Dells customized computers.

The growth rate of the computer industry is also slowing down. Today, Dell has the biggest
share of the market. If the demand slows down, the competition will become stiffer in the process.

Dell has to work doubly hard to differentiate itself from its substitutes to be able to continue
holding a significant market share.
Technological advancement is a double-edge sword. It is an opportunity but at the same time a
threat. Low-cost leadership strategy is no longer an issue to computer companies therefore it is
important for Dell to stand out from the rest.
If you liked the SWOT analysis of dell, kindly bookmark us and spread the word

Objectives & Strategy Development

Marketing Objectives
The following are the marketing objectives of the organization:

Dell should work on corporate branding so that it can retransform itself from a PC
manufacturer to a firm that provides products and services to different niche markets.
Corporate branding is extensive and Dell should focus on enterprise level solutions, storage
networks, and supercomputers, which will target the corporate sector.
Dell needs to be cohesive through acquisitions and mergers.

 Product diversification should be supported by innovation in the field of software,

enterprise solutions, tablet PCs and smart phones.
Innovative technologies can be developed so that they can be sold at lower costs. This is the
backbone of the organization, which has been successful because of its ability to manage its

logistics.
Dell should enhance its relationships with its customers as means of ensuring high
Levels of success. (McDonald, 2002)
It should not abandon its PC hardware business but find ways to develop innovative
Devices that are in accordance with current market conditions.
Dell should employ its key strengths to remove weaknesses

Targeting and Positioning

Dell needs to restructure itself so that it can create the image of a diversified technology
solution provider. Services and software will be the main backbone of its new marketing strategy.
Besides that, its core business, which is hardware, will remain but it will provide technological
and innovative solutions. Dell needs to target home users as well as different corporate customers.
The development of a comprehensive business strategy is critical for success as it will lead to
long-term growth. (Graham, 2005)
Dell needs to conduct an analysis of the cash flows from the profitable products and services.
This will help the organization to attain strategic competitive advantage. Dell should focus on its
key strengths, which are to reduce costs, which can be helpful, as it will ensure innovation, and
low costs with respect to new technology. (Jobber, 2001)

Growth Strategy
Product diversification is a key strategy for Dell as it seeks to maintain a competitive
advantage in the declining PC market. Dell needs to restructure its core business priorities and

develop new structures that can help it to gain leverage in a highly competitive industry. The
development of a comprehensive approach is essential because it can lead to competitive
advantage in the future. (Khan & Khan, 2009)
Product diversification should focus on smart phones, tablet PCs, software, torage
management solutions, enterprise services, and supercomputers, which can help the organization
to attain growth quickly. Dells corporate branding strategy is also essential because it must be
restructured so that it helps to target home users as well as corporate users. It should create a
competitive strategy based upon the lenses of customers and competitors. This can help it to offer
value proposition to its customer.

Dells key competitive advantages, which include a lean supply chain management system
and lowered costs through its direct distribution model, need to be reinvented so that they can
offer value added services to home users. The home users remain the most profitable segments for
Dell. (Bennett, 2003)
Cloud computing is another area where Dell can foster growth and development. It can
employ the power of software and storage technologies through the Internet as means of attaining
clear leverage in a highly competitive industry. Supporting the cloud computing industry is
another innovative way for growth in the market.
Dell needs to appear cohesive through its mergers and acquisitions. This will help it to
have a centralized strategy for attaining growth. It should focus outwards so that its business
processes are flexible, reliable and agile. It needs to redefine its priorities and make investments in
the areas where there are potential for increased cash flows. This will help the organization to
attain success by leveraging its key products and strengths. (Phillips, 2005)

Selection of Competitive Advantage

Dell can attain competitive advantage by using following strategies:

 Product diversification should continue but its core products of hardware should be given
priority so that it can determine profitable markets.
Niche markets need to be targeted by the organization for success.
It needs to focus on branding itself into a complete IT services and devices provider.
Dell needs to revamp its marketing and business strategies through efficiency,
Competence and professionalism.

Marketing Mix
Product
Dells products should offer tangible and intangible benefits to its customer segments. New
products and services can offer significant advantage and choice to the customers. They can also
provide increased loyalty and brand image for the organization, which is needed by Dell in order
to ensure that it can secure its future. (Yasin & Zimmerer, 2005)
Price
Dells pricing strategies should not exclusively focus on lower prices. But it can devise ways
to find products and services that are innovative but at low prices. In other services, the
organization needs to have clear choices so that it is able to achieve its critical targets in a
proficient manner. (Webb et al, 2000)
Place
Dell should focus on online commerce as the means to reduce its costs. This can help the
organization to offer an online business model that offers convenience, satisfaction, and
excellence for the customers. (Wilson, 2002)
Promotion

Social media is another way to promote its products and services. Moreover, the Internet
should remain the main medium for the success of the organization. The

se of different

promotional strategies over the Internet and social networking sites will help the organization to
attain strategic leverage within a short span of time. (Holloway, 2006).

History of Dell Computer Corporation

The largest direct-sale computer vendor in the world, Dell Computer Corporation sells
desktop personal computers, notebook computers, network servers, and a variety of computer
peripherals and software. The manufacturer sells its equipment directly to consumers, largely
businesses and government agencies, through its toll-free number and its web site. Dell also sells
workstations, network servers, and high-end storage products. Founder Michael Dell holds 14
percent of the company and continues to run the company as CEO.

Early History
Dell was founded by Michael Dell, who started selling personal computers out of his dorm
room as a freshman at the University of Texas in Austin. Dell bought parts wholesale, assembled
them into clones of IBM computers, and sold them by mail order to customers who did not want to
pay the higher prices charged by computer stores. The scheme was an instant success. He was
soon grossing $80,000 a month, and in 1984 he dropped out of school to found Dell Computer.
At the time, the PC industry was dominated by such large firms as IBM, while smaller, lesser
known mail order firms sold IBM clones at a steep discount. Dell used low-cost direct marketing
to undersell the better known computers being sold through such high-overhead dealer networks.
Dell placed ads in computer magazines, gearing his merchandise to buyers who were
sophisticated enough to recognize high quality merchandise at low prices. Customers placed
orders to Dell by dialing a toll-free number. As a result of these methods, Dell's computers became
the top brand name in the direct mail market.

Dell achieved sales of $6 million its first full year in business, approaching $40 million the
next year. Dell hired former investment banker E. Lee Walker as president in 1986 to help deal
with his firm's explosive growth. By 1987 Dell held a dominant position in the mail-order market,
but it was clear that the firm had to move beyond mail order if it was to continue growing. To
accomplish this goal the firm needed a larger professional management staff, and Dell hired a
group of marketing executives from Tandy Corp., another maker of low-cost PCs. The group built
a sales force able to market to large corporations and put together a network of value-added
resellers, who assembled packages of computer components to sell in specialized markets.
The Tandy team soon helped raise gross margins to 31 percent, up from 23 percent a year
earlier. Rather than merely undercutting the prices of competitors, they set prices in relation to the
firm's costs. The new marketing department soon ran into trouble with Michael Dell, however.
Battles erupted over advertising budgets and the number of salespeople required for corporations
and resellers. While Dell believed that the new team did not understand direct selling and was
trying to create a traditional marketing department with an overly large sales force, the Tandy
group alleged that Dell lacked the patience to wait for the sales force to pay off. By early 1988,
most of the Tandy group had resigned or been forced out.
Regardless, the firm continued growing rapidly, opening a London office that sold $4
million worth of computers during one month in 1988. Dell also formed a Canadian subsidiary.
Early in 1988 the firm formed various divisions to raise its profile among corporate, government,
and educational buyers. With reported sales of $159 million in 1987, the firm went public during
this time, selling 3.5 million shares at $8.50 a share.

Increased Competition in the Late 1980s

The firm faced several challenges, however. Announcing their own clone of IBM's new
PS/2 computer system well before it was actually ready, Dell later had trouble reproducing
important aspects of the PS/2's architecture, and the computers were delayed significantly,
embarrassing the young company. Furthermore, Dell faced competition from several Japanese
manufacturers, which were offering IBM clones at low prices. Further, having had trouble meeting
demand, Dell used money raised from its stock offering to expand capacity and warehouse space,
leaving the company with little cash. When it overestimated demand during the fourth quarter of
1988, the firm suddenly had no cash and warehouses full of unsold computers.
Dell responded to the increasing competition by increasing the level of technical
sophistication in its computers. Half of its 1988 sales came from PCs using the Intel Corp.'s 80386
microprocessor, the most powerful PC chip at the time, and the company began producing file
servers using the sophisticated Unix operating system. Dell also hired computer scientist Glenn
Henry away from IBM to work on product development. Scrapping the company's first attempts at
cloning IBM's PS/2, Henry initiated new plans for producing clones. Henry built Dell's research
and development staff from almost nothing to 150 engineers, who began working on ways to
combine the function of several chips onto one chip.
When Intel released its 486 microprocessor, Dell began speeding to market the computers
that could use it. Another of Henry's goals was high-quality graphics, which required better
monitors and special circuit boards. By mid-1989 Dell had finished initial attempts at graphics
hardware, giving it inroads into the higher end of the PC market.

Despite these advances, Dell still had a research and development budget of $7 million,
compared with the hundreds of millions spent by larger competitors like IBM. Dell's share of the
PC market was only 1.8 percent, but it was still growing rapidly. U.S. sales for 1989 reached
$257.8 million, while sales in Britain increased to $40 million and a branch in western Germany
realized the break-even point.

Dell considered itself as much a marketing company as a hardware company, and its sales
staff played an important role in its successes. Dell's sales personnel trained for six weeks or more
before taking their seats at the phone banks, and, along with their managers, they held weekly
meetings to discuss customer complaints and possible solutions. In addition to fielding questions
and taking orders, sales staff was trained to promote products. They helped buyers customize
orders, selling them more memory or built-in modems. Orders were then sent to Dell's nearby
factory where they were filled within five days. The telemarketing system also allowed Dell to
compile information on its customers, helping the firm spot opportunities and mistakes far more
quickly than most other PC companies.
In 1990 Dell set up subsidiaries in Italy and France and began selling some computers
through large computer stores, whose high-volume, low-margin strategy complemented Dell's
established operations. The firm was making important corporate inroads as well, developing
client/server computing systems with Andersen consulting, for example, and introducing powerful
servers using the Unix operating system. As a result, 40 percent of Dell's $546 million in 1990
sales came from the corporate world, up from 15 percent in 1987. Dell became the sixth largest
PC maker in the United States--up from number 22 in 1989--and retained a

Staff of 2,100.Furthermore, the company's emphasis on customer satisfaction paid off, as it

was rated number one in J.D. Powers & Associates' first survey of PC customer satisfaction. That
year, however, Dell manufactured too many memory chips and was forced to abandon a project to
start a line of workstations. As a result, 1990 profits fell 65 percent to $5 million, despite the
doubling of the firm's sales.

Price Wars in the Early 1990s

Also during this time, the traditional PC market channels were in flux. With a recession
dampening sales, PC makers engaged in a furious price war that resulted in slumping profits
nearly across the board. Compaq, IBM, and Apple all had profit declines or were forced to lay off
employees. Furthermore, Compaq filed a lawsuit against Dell, which it eventually won, claiming
that Dell's advertising made defamatory statements against Compaq. Nevertheless, the economic
recession actually benefitted Dell. While customers had less money, they still needed PCs, and
they purchased Dell's inexpensive but technologically
Innovative IBM clones in record numbers. Consequently, annual sales shot up toward $1 billion.
In the early 1990s, notebook-sized computers were the fastest growing segment of the PC
market, and Dell devoted resources to producing its first notebook model, which it released in
1991. The following year it introduced a full-color notebook model and also marketed PCs using
Intel's fast 486 microchip.

As the PC wars continued, Compaq, which had been a higher priced manufacturer stressing
its quality engineering, repositioned itself to take on Dell, releasing a low-end PC priced at just
$899 and improving its customer services. The new competition affected Dell's margins, forcing it
to cut its computer prices by up to $1,400 to keep its market share. Dell could afford such steep
price cuts because its operating costs were only 18 percent of revenues, compared with Compaq's
36 percent. The competition also forced Dell away from its attempts to stress its engineering. Dell
executives began speaking of computers as consumer products like appliances, downplaying the
importance of technology. Reflecting this increased stress on marketing, Dell began selling a
catalogue of computer peripherals and software made by other companies; it soon expanded into
fax machines and compact discs. Dell's database, containing information on the buying habits of
over 750,000 of its customers, was instrumental in this effort.

Toward the end of 1992 Dell's product line experienced technological difficulties,
particularly in the notebook market. In 1993 quality problems forced the firm to cancel a series of
notebook computers before they were even introduced, causing a $20 million charge against
earnings. The firm was projected to hold a 3.5 percent share of the PC market in 1993, but Digital
Equipment
Corporation, whose focus was minicomputers, nevertheless topped Dell as the biggest
computer mail order company. To fight back against Compaq's inexpensive PC line, Dell
introduced its Dimensions by Dell line of low-cost PCs. Sales for the year reached $2 billion, and
Dell made a second, $148 million stock offering.

During the early 1990s Dell also attempted a foray into retail marketing, the most popular
venue with individual consumers. In 1990 Dell placed its products in Soft Warehouse Superstores
(later renamed CompUSA) and in 1991 they moved into Staples, a discount office supply chain.
Dell agreed to allow the stores to sell the products at mail-order prices, a policy that soon caused
Dell a lot of grief. The value of existing computers on store shelves plummeted whenever Dell
offered a new computer through its direct sales, and Dell had to compensate retailers for that loss.
With its direct sales channel, Dell had never had inventories of old computers that it could not sell,
because each of those computers was made specifically to fill a consumer's order. Dell abandoned
the retail market in 1994.
With price wars continuing, Dell cut prices again in early 1993 and extended the period of
its warranty. However, increased competition and technical errors had hurt Dell, and despite
growing sales, the firm announced a quarterly loss in excess of $75 million in 1993, its first loss
ever. Dell attributed many of the problems to internal difficulties caused by its incredible growth.

It responded by writing down PCs based on aging technology and restructuring its notebook
division and European operations.
Like most of its competitors, Dell was hurt by an industry-wide consolidation taking place in
the early 1990s. The consolidation also offered opportunity, however, as Dell fought to win market
share from companies going out of business. Dell moved aggressively into markets outside of the
United States, including Latin America, where Xerox began to sell Dell computers in 1992. By
1993, 36 percent of Dell's sales were abroad. That year, Dell entered the Asia-Pacific region by
establishing subsidiaries in Australia and Japan.

Late 1990s Expansion

After a loss of $36 million in 1994, Dell rebounded spectacularly, reporting profits of $149
million in 1995. That year, the company introduced Pentium-based notebook computers and a
popular dual-processor PC. The company grew by almost 50 percent that year and the next,
raising its market share to approximately four percent and entering the company into the ranks of
the top-five computer sellers in the world.
Expansion continued on many fronts in 1996. Dell introduced a line of network servers and
was soon the fastest-growing company in that sector. The company also opened a manufacturing
facility in Penang, Malaysia. The most important development that year, however, was Dell's
expansion into selling directly to consumers over the Internet. Within three years, Dell was selling
$30 million a day over the Internet, which would come to account for 40 percent of the company's
overall revenue. Dell achieved enviable efficiencies using the Internet to coordinate the orders of
consumers with its own orders of parts from suppliers. The company's web site also provided
technical support and allowed consumers to track their orders from manufacturing through
delivery.

Dell continued its exponential growth in 1997 and 1998, reaching profits of $944 million in
1998. The company introduced new products and services, including a line of workstations, a
leasing program for individual consumers, and a line of storage products. Dell also expanded its
manufacturing facilities in the United States and in Europe. In 1998 it established a production
and customer center in Xiamen, China, raising the number of its overseas plants to three. By the
time Dell sold its ten-millionth computer in 1997, it was a close fourth behind IBM, HewlettPackard, and Compaq in the computer industry. By mid-1998, it had captured nine percent of the
market and the number two spot.

Following on the success of its direct sales over the Internet, Dell opened an online
superstore of computer-related products in 1999. Gigabuys.com offered low-priced computer
hardware, software, and peripherals from various companies in the industry, although Dell
continued to sell its own products at www.dell .com. The company also expanded its Internet
offerings in 1999 with Dellnet, an Internet access service for Dell customers.
Although Dell had faced competition from numerous small companies imitating Dell's
direct-selling strategy, it encountered stiffer competition in the late 1990s from the big players in
the industry. Compaq, for example, began selling a new line of personal computers over the phone
and through its web site. While Dell's growth showed some signs of slowing in 1999, few doubted
that Dell would continue to maintain a lead position in the industry, given its hit combination of
direct sales and made-to-order merchandise.
Principal Divisions: Dell Americas; Dell Asia Pacific; Dell Japan; Dell Europe, Middle East,
Africa.
Principal Competitors: Compaq Computer Corporation; Gateway, Inc.; Hewlett-Packard
Company; International Business Machines Corporation (IBM).

Chronology
Key Dates:
1984: Michael Dell founds Dell Computer Corporation.
1988: Company goes public with 3.5 million shares of company stock.
1991: Dell introduces its first notebook PC.
1993: Dell establishes subsidiaries in Australia and Japan.
1996: Company begins selling over the Internet.
1997: Dell introduces a line of workstations.

Additional Details
Public Company
Incorporated: 1984
Employees: 29,300

 Sales: $18.24 billion (1999)

Stock Exchanges: NASDAQ
Ticker Symbol: DELL
NAIC: 334111 Electronic Computer Manufacturing

Computer Weekly report: Dell

This special nine-page report from Computer Weekly analyses the challenges facing Dell, its
financial performance, the services it offers, its place in the IT market and its future strategy.
Packed with graphs and diagrams, the report is essential reading for any organization
already working with, or thinking of working with, Dell.

Key Facts about Dell

Net revenue: $52.9bn
Net earnings: $1.4bn
Specialisms: PCs, printers, enterprise servers, storage, networking, services
Employees: 96,000 worldwide
History: Started in 1984 by Michael Dell, incorporated 1986.
Registered UK office
Dell UK
The Boulevard

Cain Road, Dell Campus

Bracknell, Berkshire
RG12 1LF
Registered Scotland office
368 Alexandra Parade
Glasgow G31 3AU
Scotland

Dell
whitepapers from Tech Targets
research library
Dell's Data Protection Solution
Dell Advanced Infrastructure Manager
Dell AIM Demo
How Dell connects infrastructure
Update Dell Server Hardware with Dell Open Manage Essentials
Managing Dell Blade and Chassis Using Dell Open Manage Essentials

Key UK customers
Large enterprise
RES (Renewable Energy Systems)
Betfair
Double Negative
Public sector
Bracknell Forest Council
Newport City Homes
Lodge Park College
Haberdashers Askes Boys School
University of Leicester
University of Dundee

 Hammersmith and Fulham Primary Care Trust

Bedfordshire and Luton Mental Health and Social Care Partnership Trust
SMB
Pensions First
KN Networks
Catalyst2
Redington

Dell net
revenue
growth and
product vs
services
revenue

Conclusion
Dell has been successful in the PC market because of its supply chain management and
direct business model. It has a flexible and reliable supply chain management system that reduces
inventory and costs. It reduces risks of operating in a competitive industry. Dell has a brand image

among its customers because of its cost effective rates. All of these factors have made the
organization very popular among the customer segments.
However, Dell has been facing stiff competition as the trend in the PC markets has
changed. It has faced new entrants and new technologies that erode its traditional competitive
advantage. Dell needs to devise a vibrant business strategy that is based upon product
diversification. It should also continue with its primary model of computer hardware.
Furthermore, it is through the emphasis on a strategic edge that the organization can attain
success in the long term. The long-term growth should be based upon using its competitive
advantages.

BIBLIOGRAPHY

http://www.dell.co.in/

 http://en.wikipedia.org/wiki/Dell
http://money.cnn.com/magazines/fortune/fortune500/2013/snapshots/1053.html
http://www.slideshare.net/8097174415/dell-corporation-strategy.
http://infotechlead.com/2013/08/07/hp-leads-indian-pc-market-with-25-sharelenovo-acer-dell-apple-dip-in-q2/.
http://www.idc.com/getdoc.jsp?containerId=prUS24213513
http://www.interbrand.com/en/best-global-brands/2013/Best-Global-Brands2013.aspx