SWOT Analysis of Dell Computer

Strengths

Dell's Direct Model approach of enables the company to offer direct relationships with customers such as
corporate and institutional customers. Their strategic method also provides other forms of products and
services such as internet and telephone purchasing, customized computer systems; phone and online
technical support and next-day, on-site product service. This extensive range of products and services is
definitely one of Dell’s strengths.

Dell Computer'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 – Dell boasts a very efficient procurement, manufacturing and distribution process
allowing it to offer customers powerful systems at competitive prices.

Customization - Each Dell system is built to order to meet each customer’s specifications.

Read on 
Strategic Options for Dell Computer
Maintaining sustainable competitive advantage in a cutthroat business is a huge challenge for Dell
Computer. Strategies need to be implemented to continue its edge.

Reliability, Service and Support – Dell’s direct customer allows it to provide top-notch customer service
before and after the sale.

Latest Technology – Dell is able to introduce the latest relevant technology compared to companies using
the indirect distribution channels. Dell turns over inventory for an average of every six days, keeping
inventory costs low.

The company's application of the Internet to other parts of the business --including procurement, customer
support and relationship management -- is growing at a rate of 30 percent. The company's Web site
received at least 25 million visits at more than 50 country-specific sites.

Weaknesses

Dell’s biggest weakness is attracting the college student segment of the market. Dell’s sales revenue from
educational institutions such as colleges only accounts for a measly 5% of the total. Dell’s focus on the
corporate and government institutional customers somehow affected its ability to form relationships with
educational institutions. Since many students purchase their PCs through their schools, Dell is obviously
not popular among the college market yet.

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

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.
Demand for laptops is also growing. As a matter of fact, demand for laptop has overtaken the demand for
desktops. This is another opportunity for Dell to grow in other segments.

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

In a volatile market such as personal computers, threats abound. Computers change in a constant
sometime daily basis. New software, new hardware and computer accessories are introduced at a lightning
speed. It is essential for Dell therefore to be always on the lookout for new things or introduce new
computer systems.

The threat to become outmoded is a pulsating reality in a computer business. Not only that, companies
must produce products that are high in quality but low in price. This is one challenge that Dell contends
with.

One of the biggest external threats to Dell is that 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.

Technological advancement is a double-edge sword. It is an opportunity but at the same time a threat.
Low-cost leadership strategy is no longer an issue to computer companies therefore it is important for
computer companies to stand out from the rest.

Technology dictates that the most up-to-date and fastest products are always the most popular. Dell has to
always keep up with technological advancements to be able to compete.

Read more at Suite101: SWOT Analysis of Dell Computers: Strengths, Weaknesses, Opportunities

and Threats Analysis http://strategic-business-
planning.suite101.com/article.cfm/swot_analysis_of_dell_computers#ixzz0uQEGCgTf