Introduction :
Dell Inc. is a public corporation which deals in the trading and manufacturing of Personal Computers, Computer Hardware, Computer Software, Servers, Peripherals, Smartphones, Televisions, Data centers, IT Consulting and IT Services. It was founded by Michael Dell on February 1,1984. It is headquartered in the Round Rock, Texas, U.S.A. As per the 2020 statistics, Dell Inc. is employing 165,000 people.
Financial Statement:
Dell Inc. generated around US$92.15 Billion annual revenue in the fiscal year 2019 with a net profit of US$5.529 Billion. Even though Dell competes against giants like HP, Sony, Apple, Samsung, Lenovo, and many others, the company has grown steadily to become the third-biggest player in the PC market.
Dell Inc. SWOT analysis gives a brief description of the Dell Inc. Performances failures and the advantages they could get in the upcoming days:
Strengths
Brand name. Dell has a very strong brand reputation for providing quality products to its customers. It was named as the #137 to regarded company, #90 world’s most valuable brand and #32 world’s best employers.
Global Presence. Dell Inc. has a total of 396 offices providing services to their customers, clients and Stakeholders which makes it the third largest PC manufacturer in the World.
Environmental record. Dell is engaged in many green and clean earth initiatives and has earned its name for being an eco-friendly business.
Competency in mergers and acquisitions. Dell Inc. brought patents, new capabilities, assets and skills to the business over the last five years by spending $13 billion. which make them the most competent company for successful mergers and acquisitions.
Direct selling business model. Dell doesn’t trade its services and products through big-box retail outlets but instead they reach directly to consumers and enterprises, keeping thin profit margin in its Products.
Weaknesses
Lack of Diversification: The large stream of Dell’s revenues comes from computer, especially laptop sales, but it hasn’t yet (completely or Partially) diversified its stream of income by producing other tech products like mobile phones, tablets etc.
Weak patent portfolio. Dell Inc. finds it hard to compete in profitable smartphones and tablets market because of low spending on Research & Development in these markets.
Poor customer services. Although Dell invested a large sum of money in providing best customer services but hasn’t yet regained its previous reputation after it deteriorated due to outsourcing its call centres offshore.
Overdependence on Tech: Dell Inc. works mainly in the technology sector, which may experience unpredictable ups and downs. In case the tech sector declines, the company can be exposed to terrible losses.
Low differentiation. In the Past, Dell Inc. provided its products on low and competitive prices which was a complete competitive advantage for them. But now, apart from the price, Dell’s products are little differentiated from competitors’ products and are in competitive disadvantage if the price offered by competitor is lower.
Opportunities
Expand services and enterprise solutions divisions. At the moment, Dell provides various services (cloud, security and infrastructure) and enterprise solutions (servers, networking and storage), which are the Dell’s most profitable business. Dell business should focus on growing these divisions further for better opportunities.
Focus on emerging economy. Dell has a good presence in the markets of the countries where economies are still in development phase but it should focus more on the emerging economies like African economy because Emerging economies are the fastest growing markets today for laptops, tablets and other electronic devices.
Tablet market growth. As per the statistics, Tablet market is expected to grow in double digits in next few years and Dell; being a highly profitable company should invest in the tablet Market, release new tablet models and benefit from the market growth.
Threats
Growing demand for smartphones and tablets. consumers now a days choose tablets and smartphones over laptops because of their lower price and strongly improved functions. This growing demand for the mentioned devices takes a share out of laptops, which is the main stream of revenue for Dell.
Profit margin decline on hardware products. Due to rising raw material prices used in manufacturing hardware products, which is the Dell’s main stream of income. The prices of those hardware products will also increase in the future. This will add to costs for Dell and will further cut the profit margin.
Intense competition. Being the third highest PC manufacturing giant in the tech Market, Dell faces intense competition in all its business segments comprising of price, quality, brand, technology, reputation, distribution and range of products, with other Tech giants like Acer, Apple, HP, IBM, Lenovo and Toshiba.
References
Arthur, C. (2012). Dell revenues slump as tablets and smartphones eat into market. Available at: http://www.guardian.co.uk/technology/2012/nov/16/dell-revenues-slump-pc-tablet-smartphone
Dell (2013). About Dell. Available at: http://content.dell.com/uk/en/corp/about-dell.aspx?c=uk&l=en&s=corp
Interbrand (2013). Best Global Brands 2012. Available at: http://www.interbrand.com/en/best-global-brands/2012/Best-Global-Brands-2012.aspx
Forbes Ranking (2020). Dell Technologies. Forbes
Moorhead, P. (2019, November 15). Dell Technologies Expands Service Offerings. Forbes
Malinga, S. (2019, June 28). Dell makes good on $20bn R&D investment. IT Web
PR Staff. (2020, May 28). Innovation and Resiliency Drive Dell Technologies’ First Quarter Fiscal 2021 Financial Results. PR News
Portnoy, S. (2020, February 20). Best rugged laptops for business in 2020. ZDNet
Savitz, J. E. (2019, November 27). Dell Stock Is Falling Because the Outlook Looks Worse. Barron’s Magazine.
Rocco, M. (2019, August 30). PC sales drive Dell to an earnings beat. The Financial Times
Dichter, T. (2019, March 30). Call Centers Return To The U.S. — More Companies Get The Link Between Customer Service And Profit. Forbes
Retail Tech. (2019, March 25). Dell plans to expand retail presence across 1,300 cities, towns. Economic Times
Idris, A. (2020, May 29). Africa’s cloud computing industry is set to grow as data adoption rises. Tech Cabal
O’Dea, (2020, March 12). Smartphones – Statistics & Facts. Statista
Haranas, M. (2020, April 28). The Power Of Dell Technologies: Fueling The Future For Partners. CRN
Richter, F. (2019, November 29). PC Market Shrinks For the Seventh Consecutive Year. Statista
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