Swot Analysis Of Dell Computer

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SWOT analysis of Dell Computers History: The company was founded in

1984 by Michael Dell, now the computer industry's longest-tenured chief
executive officer, on a simple concept: that by selling personal computer
systems directly to customers, Dell could best understand their needs, and
provide the most effective computing solutions to meet those needs. Today,
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. Company revenue for the last four quarters totaled $19.9
billion. Through the direct business model, Dell offers in-person relationships
with corporate and institutional customers; telephone and Internet
purchasing (the latter now exceeding $18 million per day); customized
computer systems; phone and online technical support; and next-day, on-
site product service. Dell arranges for system installation and management,
guides customers through technology transitions, and provides an extensive
range of other services. The company designs and customizes products and
services to the requirements of the organizations and individuals purchasing
them, and sells an extensive selection of peripheral hardware and computing
software. Nearly two-thirds of Dell's sales are to large corporations,
government agencies and educational institutions. Dell also serves medium
and small businesses and home-PC users. Dell's Unique Direct Model: Dell's
award-winning customer service, industry-leading growth and consistently
strong financial performance differentiate the company from competitors for
the following reasons: Price for Performance -- With the industry's most
efficient procurement, manufacturing and distribution process, Dell offers its
customers powerful, richly configured systems at competitive prices.
Customization -- Every Dell system is built to order. Customers get exactly
what they want. Reliability, Service and Support -- Dell uses knowledge
gained from direct customer contact before and after the sale to provide
award-winning reliability and tailored customer service. Latest Technology --
Dell introduces the latest relevant technology much more quickly than
companies with slow-moving indirect distribution channels. Dell turns over
inventory every six days on average, keeping related costs low. Superior
Shareholder Value -- During the last four quarters, the value of Dell common
stock nearly doubled. From 1996 through 1998, Dell was the top-performing
stock among the Standard & Poor's 500. Internet Leadership Sales via Dell’s
Web site surpassed $18 million per day during early 1999, accounting for 30
percent of overall revenue. The company's application of the Internet to
other parts of the business --including procurement, customer support and
relationship management -- is approaching the same 30-percent rate. The
company's Web received 25 million visits at more than 50 country-specific
sites last quarter. Timeline: 1984 Michael Dell founds Dell Computer
Corporation 1985 Company introduces the first PC of its own design: the
Turbo, featuring Intel® 8088 processor running at eight megahertz 1987
Dell is first PC company to offer next-day, on-site product service
International expansion begins with opening of subsidiary in United Kingdom
1988 To better meet unique customer needs, Dell begins to organize
business around distinct customer segments Dell conducts initial public
offering of company stock, 3.5 million shares at $8.50 each 1990
Manufacturing center in Limerick, Ireland, opened to serve European, Middle
Eastern and African markets 1991 Company introduces its first notebook PC
1992 Dell included for first time among Fortune 500 roster of world's largest
companies 1993 Dell joins ranks of the top-five PC makers worldwide
Subsidiaries in Australia and Japan are company's first entries into Asia-
Pacific region 1995 Original $8.50 shares of Dell stock worth $100 on
presplit basis 1996 Asia-Pacific manufacturing center in Penang, Malaysia,
opened Customers begin buying Dell computers via Internet at
www.dell.com Dell begins major push into network-server market Company
added to Standard & Poor's 500 stock index 1997 Company sales via
Internet reach $1 million per day Dell ships its 10-millionth computer system
Per-share value of common stock reaches $1,000 on presplit basis Dell
introduces its first workstation systems 1998 Company expands
manufacturing facilities in the Americas and Europe, and opens production
and customer center in Xiamen, China Dell introduces PowerVault storage
products 1999 Dell opens www.gigabuys.com, an online computer-related
superstore Sales via Internet exceed $18 million per day Industry Outlook
While the personal-computing market has expanded dramatically since the
1970s, Dell believes that the industry's best days and its own are yet to
come, for two broad reasons. First, the stream of software and hardware
innovation from companies such as Microsoft Corp. and Intel Corp. is rapid
and robust, and is sharply increasing system performance and reducing the
relative cost of computing. For example, in February 1982, Intel introduced
its 286 chip, which was capable of processing 2.66 million instructions per
second, or MIPS, at a clock speed of 12 million cycles per second, or
megahertz. Today's Intel Pentium II processors are capable of considerably
more than 600 MIPS at 450 megahertz, and the sharp upward development
trend is expected to continue. Second, while computer performance is going
up, the relative cost of computing computer prices per MIPS has steadily
declined, encouraging new computer users and more rapid PC replacement.
Customers, in turn, are using those savings to buy even more powerful,
more richly configured systems. As processor transitions and expected cost
reductions continue, many industry analysts foresee worldwide industry
volume growth at a compound annual rate of 15 to 20 percent annually over
the next three years. Meanwhile, the Internet is becoming more integrated
into daily life: businesses rely on the Internet for commerce and real-time
information exchange; customers go online to shop, bank and conduct
personal correspondence; and students from grade schools through college
use the Internet as an educational tool. From servers that power the
Internet connection, to desktops and notebooks that efficiently and
effectively provide the interface, to workstations used to develop digital
content, the ability to provide products and services that enable Internet
access and enhance the online experience will be vital for companies in the
computer systems industry. Development of the Direct Model Dell is
continuously refining its direct approach to manufacturing, selling and
servicing personal-computing systems. The company is committed to
extending the advantages inherent in what is already the industry's most
efficient business model. Current Dell initiatives include moving even greater
volumes of product sales, service and support to the Internet; using the
Internet to improve the efficiency of Dell's procurement, manufacturing and
distribution process; and further expanding an already broad range of value-
added services. By taking its direct business model and its associated
customer experience to even higher levels, through the Internet and value-
added services, Dell intends to continue to grow its business at a multiple of
the high-growth rate anticipated for the computer-systems industry as a
whole. Dell still has significant opportunity for expansion in all parts of the
world, especially in markets outside of the U.S.; in all customer segments;
and in all product categories, ranging from home PCs to enterprise products,
such as network servers and workstations. Mission Statement: Dell's mission
is to be the most successful computer company in the world at delivering the
best customer experience in markets we serve. In doing so, Dell will meet
customer expectations of: · Highest quality · Leading technology ·
Competitive pricing · Individual and company accountability · Best-in-class
service and support · Flexible customization capability · Superior corporate
citizenship · Financial stability Objectives: · To achieve market share of 14%
by year 2002 worldwide. · Continue expansion of server and storage
products. · Continue to maintain low costs – decrease each year by 1%. ·
Establish global brand recognition. SWOT Analysis: Strengths · No inventory
buildup · Industry leading growth · Cost efficiency · Direct to customer
business model – latest technology · Customization · Internet sales
leadership - $5M worth of products everyday Weaknesses · No proprietary
technology · High dependency on component suppliers Opportunities ·
Network-internet, intranet and extranet · Strong potential market in Europe,
China and India · Low costs and advanced technology · Growth in business,
education and government markets Threats · Competition (price and market
share) · Currency fluctuation in countries outside the US · Political instability
· Tariff trade barriers Marketing Strategies · Major customers: large
corporations, government agencies and medical and educational institutions
to small business and individuals. · Strategy: Multinational corporate
customers