Dell Summary

dell INC STRATEGIC POSITION, CHOICE AND FINANCIAL analysis card 1 PESTEL Meaning to dell? Dells ability to address. Political Factors mainland Chinas five-year plan has a clear set of social objectives. 23) Good chance for Dell to grow real good. Increased government spending helped China for the first eon to beat the US to become the in BRICS nation. institutions biggest PC market. (24) Restrictive policies in many countries for the protection of domestic companies. 25) BRICS polarity framework pact for local-currency deferred payment lines. (26) European Commission Unveils novel intellectual property rights (IPR) Strategy (27) economical The US Debt Crisis and Downgraded Credit Rating. 28) globular consumers spending Moderate Factors Global Economy growth 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% growth 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 genuine countries. (32) Social Education affects brand consciousness, product demand. 42) Consumers willing to pay moreVery good. Factors Income levels (40) for higher quality. heathen aspects affect gross revenue. (39) Technological Factors Fast technological advances (33) Needs continuous products Good. Increased research and development. (33) innovation and redesigning. victimize product life cycle. (41) Environmental Adds to Global warming. (34) Requires focus for Moderate. Factors towering Environmental effects. 35) sustainability. The global volume of e-waste generated is pass judgment 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. severe recycling laws in some countries. (37) Existence of consumer rights and labour rights. (38) Competition laws, employment laws, health and safety legislation. 38) dining table 2 Porters 5 Forces Forces Factors Strength 1 Threat of New Entrants Low In PC industry, not many competitors emerging on a yearly basis. 17 Chance of a rude(a) PC vendor entering the market and gaining significant market sh atomic number 18 is pretty slim. 18 Entry barriers are higher now than they ever have been. 18 Capital required is huge. 18 court and distribution are ii of the entry barriers that are making entry into the PC market tough. 18 calculating machine industry is highly emulous with continuing developments. 17 People likely to go with big brands they know. 17 2 Power of Suppliers Suppliers such as INTEL and Microsoft holds significant amount of power. 17 High Intels microprocesso r chips are used in approximately 80% of individualized computers. 18 Microsoft operating systems are used 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 Use of industry standard hardware and software means a user can easily switch from one brand to another. 19 4 Threat of Substitute Organizers, PDAs, blackberries and lozenges are the substitutes of PC industry. 20, 21 PC market growth has been impacted by media lozenges and next-gene ration smartphones. 21 High It is anticipated that tablets will Cannibalize 10 % of PCs by 2014. 21 5 living Rivalry 1. 6Acer, Apple, Hewlett-Packard and Lenovo are the major competitors of Dell. 17 1. 17 Attractive smart gadgets such as Apples iPad making PC industry saturated. 22 High Table 3 Value Chain Analysis Primary Activities Inbound logistics Higher density container & trailer expedition via sea, air & road to reduce fue l consumption. 1 Use of foam p in allets instead of wood for shipping, which reduce address of freight by reducing weight. 1 Dell relies on its highly reliable suppliers for materials. 2 Operations Produce construct to order computers according to individual costumers needs. 2 Use the knowledge from direct contact with its customers. 2 Outbound Logistics Logistics teams leverage the go around transportation and logistics endurers available in the industry. 1 Dell sends computers monitors directly from its supplier to customers reducing the cost of storage and time of transfer. 2 Use of direct selling models reduce coast to customers. 2 Marketing and salesExpanding relationships with retail partners around the world 1 Use of direct selling model thereby reducing cost of distribution channels and conference gaps between customers and company. 2 Direct selling models helps to understand unmet customer needs. 2 24000 retail outlets worldwide, including contr acts with Walmart Brazil and Maxico , and Gome Group, the largest electronic seller in Chaina. 16 Services Dell spent lot of money in training segment managers to provide acres of the art customer advice. 2 Customer solutions team collaborate with customers to fulfil there unmet needs. 2 Support Activities Procurement substantive used is not protected under any trade mark or copy right. 2 each competitors can use the same materials from same suppliers as suppliers tend to sell generally to all players in industry. 2 Technology Introduce bare-ass and relevant technology much more quickly than competitors who use fall 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 breed turnover is 6 days. 2 Human Resources Dell staff has to be knowledgeable and customer focused to provide bes t outcome. 2 Train its segment managers to provide state of the art customers service. 2 Table 4 Generic Forces ample COST 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 strain to help Leadership Strategy. 62 eliminate AIDS in Africa. 64 Robust market share by memory 12% of worldwide pc market. 65 Alienware M11x the first ultraportable gaming notebook. 66 Dell precision Mb6400 a high-performance unstable workstation. 67 Dell Streak 7 is the first 7 tablet that has dual-core processor that supports 4G. 69 Narrow FOCUSED down(p) COST FOCUSED DIFFERENTIATION Market Introduced low-cost notebooks for consumers and small Dell first introduced Streak Android-establish tablet computer for doctors and other businesses in Asian markets. 66 clinicians. 70 Table 5 Ansoff Product Market Matrix Exi sting products New Products Existing 1. 1. $155 million acquisition of MessageOne Inc(industry leader in 1. 4 Announced new tablet latitude XT3 for business customers that allows Market SaaS) enables enterprise level email business continuity, grater mobility, security and manageability. 6 compliance, archiving, chance 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. Unveiled 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 promise with Gome Group, the largest electronic retailer in 1. 12 Introdu ced cloud computing that provide IaaS based on VMware. china. 16 14,15 1. 9 Only 5. 1% Indians and 9% Chinese have computers. 75% Americans have computers. 16 Table 6 capital of Massachusetts Construction Group Matrix Relative Market Share (Cash Generation) Market Growth Rate game HIGH scummy (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 inch Streak Smartphone 49 Table 7 Dells Acquisitions. victory of Dells Acquisitions Ingredient 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, F easibility GENERIC STRATEGIES 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 Net profit margin (%) 4. 5 4. 82 4. 05 2. 71 4. 28 6. 7 51,52 3 Return on total 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 aptitude 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 Ratios 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 common peopleember 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 Octobe r 9, 2011) http//www. pcmag. com/ Accessed 17 Oct 2011. 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SAAD BAKHTIAR RANA 2. JAHAARA AHMED SIDDIQUI