NAME: JOHANNAH ALEXIS M.

GUILO
BSN-4TH YEAR
DELL COMPANY SWOT ANALYSIS

Dell Inc., formerly PC’s Limited (1984–88) and Dell Computer Corporation
(1988–2003), global company that designs, develops, and manufactures personal
computers (PCs) and a variety of computer-related products. The company is one
of the world’s leading suppliers of PCs. Dell is headquartered in Round Rock,
Texas.
Strengths:
 World’s 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.
 Dell’s Direct Model approach enables the company to offer direct
relationships with customers such as corporate and institutional customers.
 Dell’s 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 customer’s 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:
 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. Dell’s sales
revenue from educational institutions such as colleges only accounts for a
merely 5% of the total.
 Dell’s focus on the corporate and government institutional customers
somehow affected its ability to form relationships with educational
institutions.
 For home users, Dell’s direct method and customization approach posed
problems. For one, customers cannot go to retailers because Dell does not
use distribution channels.
 Customers just can’t buy Dell as simply as other brands because each
product is custom-built according to their specifications and this might take
days to finish.
Opportunities:
 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 Dell’s 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 Dell’s 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:
 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.
 Dell’s Direct Model attracts customers because it saves cost. Since other
companies are able to offer computers at low costs, this could threaten Dell’s
price-conscious 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 Dell’s
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.