SWOT Analysis Dell

Strengths.
 Dell is the World's largest PC maker. Profits for the 3 months to July 2005 were in excess
of $1 billion US, representing a growth of around 28%. For the last couple of years it has
held its position as market leader (it took it from rivals Hewlett-Packard). The Dell brand
is one of the best known and renowned computer brands in the World.

 Dell cuts out the retailer and supplies directly to the customers. It uses information
technology, and Customer Relationship Management (CRM) approaches to capture data
on its loyal consumers. So a customer selects a generic PC model, and then adds items
and upgrades until the PC is kitted out to the customer's own specification. Components
are made by suppliers, never by Dell. PC's are assembled using relatively cheap labour.
You can even keep track of your delivery by contacting customer services, based in India.
The finished goods are then dropped off with the customer by courier. Dell has total
command of the supply chain.

Weaknesses.
 The company has such a huge range of products and components from many suppliers
from a plethora of countries, that there is the occasional product recall that can cause Dell
some embarrassment. In 2004 Dell had to recall 4.4 million laptop adapters because of a
fear that they could overheat, causing electric shocks or fires.
 Dell is a computer maker, not a compute manufacturer. It buys from a group of
concentrated hi-tech component manufacturers. Whilst this is a tremendous advantage in
terms of business operations, allowing Dell to focus on marketing and logistics, the
company is reliant on a few large suppliers, and to an extent is locked in for periods of
time (i.e. unable to switch supply dues to the lack of large suppliers in the World).

Opportunities.
 Kevin Rollins replaced Michael Dell in 2004 as Dell's Chief Executive Officer. Dell
remained the company's Chairman. Despite founder Dell's massive success, new blood
and a change in management thinking could lead the company into a new, even more
profitable period. Dell was born in 1965, and founded Dell in 1984 with $1000 whilst
studying at the University of Texas. He became the youngest Fortune 500 CEO in 1992,
and will be a tough act to follow.
 Dell is pursuing a diversification strategy by introducing many new products to its range.
This initially has meant good such as peripherals including printers and toners, but now
also included LCD televisions and other non-computing goods. So Dell compete against
iPod and other consumer electronics brands.
  Dell is making and selling low-cost, low-price computers to PC retailers in the United
States. The PC's are unbranded and should not be recognised as being Dell when the
consumer makes a purchase. Rebranding and rebadging for retailers, although a departure
for Dell, gives the company new market segments to attack with the associated marketing
costs.

Threats.
 The single biggest problem for Dell is the competitive rivalry that exists in the PC market
globally. As with all profitable brands, retaliation from competitors and new entrants to
the market pose potential threats. Dell sources from Far Eastern nations where labour
costs remain low, but there is nothing stopping competitors doing the same - even
sourcing the same or similar components from the same or similar suppliers. Remember,
Dell is a PC maker, not a PC manufacturer.
 Dell, being global in its marketing and operations, is exposed to fluctuations in the World
currency markets. Although it is a very lean organization, orders do have to be placed
some time ahead due to their size or value. Changes in exchange rates could leave the
company exposed to potential loses in parts of its supply chain.

Dell's commitment to customer value, to our team, to being direct, to operating responsibly and,
ultimately, to winning continues to differentiate us from other companies. The Background
section provides critical information and history about Dell's business world.