Dell Summary

dell INC STRATEGIC POSITION, CHOICE AND FINANCIAL ANALYSIS remit 1 PESTEL subject matter to dell? dells ability to address. Political Factors chinaw ars five-year plan has a clear set of social objectives. 23) Good go on for dingle to grow Very good. Increased government spending helped China for the first time to beat the US to become the in BRICS nation. worlds biggest PC market. (24) Restrictive policies in many countries for the protection of domestic companies. 25) BRICS sign example pact for local-currency credit lines. (26) European Commission Unveils saucy intellectual post rights (IPR) dodge (27) Economic The US Debt Crisis and Downgraded Credit Rating. 28) Global consumers spending guarded Factors Global Economy reaping forecast 4 % in 2011 and 2012. (Advanced economies 1. 6% and 1. 9 % less Increased competition. Emerging and developing economies 6. 4% & 6. 1% ,US 1. 5 % & 1. 8%,China9. 5 9. 0 ) (29) Canalys predicts 14% gro wth in PC market for 2011. 30) China has topped the US as the largest PC market worldwide (31) Economies in developing countries like growing at faster rates than developed countries. (32) Social Education feigns tell on consciousness, harvest-home demand. 42) Consumers put uping to pay moreVery good. Factors Income levels (40) for higher quality. Cultural aspects affect sales. (39) Technological Factors Fast technological advances (33) Needs continuous products Good. Increased enquiry and development. (33) innovation and redesigning. Short product life cycle. (41) Environmental Adds to Global warming. (34) Requires localise for Moderate. Factors mettlesome Environmental effects. 35) sustainability. The global volume of e-waste generated is expected to reach 93. 5 million tons in 2016 from 41. 5 million tons in 2011 at a CAGR of 17. 6% from 2011 to 2016. (36) Legal Factors Minimum wages restrictions in many countries. Effects to its profit margin. Good. Strict recycling laws in most countries. (37) Existence of consumer rights and labour rights. (38) Competition laws, employment laws, health and safety legislation. 38) circuit board 2 Porters 5 Forces Forces Factors Strength 1 scourge of New Entrants Low In PC industry, not many competitors emergent on a yearly basis. 17 Chance of a new PC vendor entering the market and gaining significant market share is middling slim. 18 Entry barriers are higher now than they ever have been. 18 slap-up required is huge. 18 be and distribution are two of the entry barriers that are reservation entry into the PC market tough. 18 Computer industry is highly competitive with continuing developments. 17 People likely to go with big brands they hit the hay. 17 2 post of Suppliers Suppliers such as INTEL and Microsoft holds significant amount of power. 17 High Intels microprocessor chips are utilize in approximatel y 80% of personalised computers. 18 Microsoft operating systems are substance abused in 90% of computers. 18 3 Power of Buyers PC has become a commodity. 19 Moderate There is no brand loyalty among PC users. 19 social function of industry standard hardware and software product means a user can easily switch from peerless brand to another. 19 4 Threat of Substitute Organizers, PDAs, blackberries and checks are the substitutes of PC industry. 20, 21 PC market growth has been impacted by media tablets and next-gene ration smartphones. 21 High It is anticipated that tablets will Cannibalize 10 % of PCs by 2014. 21 5 Existing Rivalry 1. 6Acer, Apple, Hewlett-Packard and Lenovo are the major competitors of dell. 17 1. 17 Attractive new gadgets such as Apples iPad making PC industry saturated. 22 High Table 3 Value orbit Analysis Primary Activities Inbound logistics Higher density container & trailer freight via sea, air & road to reduce fuel co nsumption. 1 Use of foam pallets sort of of wood for shipping, which reduce cost of freight by cut down weight. 1 dell relies on its highly reliable suppliers for materials. 2 Operations Produce built to rove computers according to individual costumers needs. 2 Use the knowledge from leave contact with its customers. 2 outward Logistics Logistics squads leverage the best transportation and logistics providers available in the industry. 1 dingle sends computers monitors instantly from its supplier to customers reducing the cost of storage and time of transfer. 2 Use of direct interchange models reduce coast to customers. 2 grocerying and salesExpanding relationships with retail partners round the world 1 Use of direct selling model thereby reducing cost of distribution channels and communication gaps between customers and company. 2 Direct selling models helps to understand unmet customer needs. 2 24000 retail outlets worldwide, including contracts with Walmart Brazil and Maxico , and Gome Group, the largest electronic seller in Chaina. 16 Services Dell spent lot of money in discipline segment managers to provide state of the art customer advice. 2 customer solutions team collaborate with customers to fulfil there unmet needs. 2 Support Activities Procurement Material used is not protected under any trade mark or copy right. 2 Any competitors can use the same materials from same suppliers as suppliers tend to sell generally to all players in industry. 2 Technology enter new and relevant technology much more quickly than competitors who use slow moving distribution channels. 2 Infrastructure Revolutionized computer industrys traditional value chain by introducing direct selling model. 2 Use ROIC as mean of managerial performance and individual business units performance. 2 origin turnover is 6 days. 2 Human Resources Dell staff has to be lettered and customer focused to provide best outcome. 2 Train its segment managers to provide state of the art customers service. 2 Table 4 Generic Forces Broad personify LEADERSHIP DIFFERENTIATION Market Supply chain efficiencies. 62 Unique Customer services. 63 Direct sales model allowed Dell to pursue Cost Dell (PRODUCT)RED signature products contribute directly to Global Fund to help leaders Strategy. 62 eliminate AIDS in Africa. 64 Robust market share by holding 12% of worldwide pc market. 65 Alienware M11x the first ultraportable gaming notebook. 66 Dell precision Mb6400 a high-performance mobile workstation. 67 Dell Streak 7 is the first 7 tablet that has dual-core processor that supports 4G. 69 Narrow FOCUSED first gear COST FOCUSED DIFFERENTIATION Market Introduced affordable notebooks for consumers and small Dell first introduced Streak Android- ground tablet computer for doctors and other businesses in Asiatic markets. 66 clinicians. 70 Table 5 Ansoff Product Market Matrix Existing products New Products Existing 1. 1. $155 million acquisition of MessageOne Inc(industry leader in 1. 4 denote new tablet latitude XT3 for business customers that allows Market SaaS) enables initiative level email business continuity, grater mobility, security and manageability. 6 compliance, archiving, disaster management. 4,5 1. 5 Announced 24 new products including smart phone, tablets, netbooks, 1. 2. Introduced existing alienware and XPS laptops with HD 3D desktops etc. 7 screen. 9 1. expose new series of printers, projector and monitors in 2011. 12 New Market 1. 6 Introduces 4 new low cost PC for emerging markets like China. 1. 10 Introduced new android based smart phones and windows phone. 8 India etc in 2008. 11 1. 11Introduced android based streak tablet designed for doctors and 1. 7 Launched comprehensive rage of printers in India in 2011. 12 clinicians. 10 1. 8 Contracted with Gome Group, the largest electronic retailer in 1. 12 Introduced cloud reason that provide IaaS based on VMware. china. 16 14,15 1. 9 single 5. 1% Indians and 9% Chinese have computers. 75% Americans have computers. 16 Table 6 Boston Construction Group Matrix Relative Market Share (Cash Generation) Market Growth Rate HIGH HIGH number one (Cash Usage) Stars Question Marks Personal computers 43 Dell tablet 45 cloud computing services44 LOW Cash Cows Dogs Customised systems 46 Printers 48 Ink cartridge 47 5 adjoin Streak Smartphone 49 Table 7 Dells Acquisitions. Success of Dells Acquisitions component acquisitions 72 Acquired KACE in 2010 increases 1200 business customers and tripled in value. 72 HP doubled the Dells bid for 3PAR INC. a storage network company. 73 Made 12 acquisitions in last year. 74 Virtually all acquisitions were successful 74 Acquired equal logic 3 years ago and turned revenue of $100 m into $1 Billion post acquisition 75 Table 8 Suitability, Acceptability, Feasibility generic STRAT EGIES BCG MATRIX STRATEGIES Cost LeadershipDifferentiation Focus / Low Cost Focus / Differentiator STARS CASH COWS YE 30/1/09 YE YE 28/1/11YE YE YE YE 31/10/08 29/1/10 31/12/0831/12/0931/12/10 Table 10 Financial Ratios for DELL Inc (2006-10) 2006 2007 2008 2009 2010 Industry Averageref Profitability Ratios 2 internet profit margin (%) 4. 5 4. 82 4. 05 2. 71 4. 28 6. 7 51,52 3 Return on fundamental assets (%) 13. 05 3. 89 12. 54 6. 01 8. 68 8. 14 50,52 4 Return on capital employed (%) 43. 22 42. 86 29. 35 14. 87 18. 57 16. 42* 50 5 Return on equity (%) 58. 19 76. 97 58. 02 25. 4 33. 93 13. 65 50,52 6 Solvency ratio (%) 17. 32 13. 89 16. 12 16. 76 20. 12 25. 9* 50 Efficiency Ratios 8 Net asset turnover 7. 32 6. 77 5. 25 3. 6 3. 22 1. 51 50,52 9 Debtor days (days) 30 36 29 41 39 45. 25* 51 10 Creditor days(days) 80 86 61 97 84 52. 5* 51 Liquidity Ratios 12 Quick ratio 1. 08 1. 01 1. 3 1. 22 1. 42 1. 15 51,52 Stability Ratio s 14 interest cover 68. 22 76. 44 34. 3 13. 57 17. 25 2. 5 50,52 15 Debt/Equity(%) 12. 82 9. 45 44. 44 60. 57 66. 26 21. 43 51,52 Investors Ratios 17 P/E ratio 23. 16 15. 48 7. 45 17. 61 9. 64 14. 2 50,52 18 Dividend yield 0 0 0 0 0 2. 09 50,52 pic76 77 Figure 3 Financial Rations (Table 10) REFERENCES http//content. dell. com/ Accessed 6 October 2011. http//www. oppapers. com/essays (accessed October 8, 2011) http//ivythesis. typepad. com/ Accessed 6 Oct 2011. http//www. scribd. com/doc (accessed October 9, 2011) http//www. businessweek. com/ Accessed 27 family 2011. http//2point8. blogspot. com/2006 (accessed October 9, 2011) http//www. dell. com/us/ Accessed 17 Oct 2011. http//knol. google. om/k (accessed October 9, 2011) http//www. gartner. com/ Accesses 17 Oct 2011. http//it. tmcnet. com/topics (accessed October 9, 2011) http//techmento. com/2011/02/14/ Accessed 17 Oct 2011. http//www. usatoday. com/tech (accessed October 9, 2011) http//www. pcma g. com/ Accessed 17 Oct 2011. 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SAAD BAKHTIAR RANA 2. JAHAARA AHMED SIDDIQUI