Comparativeanalysisofhpanddell 150510201143 Lva1 App6892

FINAL PROJECT
ON
COMPARATIVEANALYSISON DELL AND
HP
SUBMITTED BY:
HASSAN MAZHAR
F10BA142
USMAN IKRAM
F10BA146
TAHIR HUSSAIN
F10BA105
ZAMAN AFZAL
F10BA160
MUBASHIR SHOUKAT F10BA159
SUBMITTED TO:
MAM HIRA AFTAB
SESSION:
JUNE 2014
Institute Of Business and Information Technology University of the Punjab

1
Contents
DEDICATION................................................................................................... 12
Acknowledgement.......................................................................................... 13
Abstract.......................................................................................................... 14
Keywords........................................................................................................ 14
Abbreviations................................................................................................. 14
Chapter 1....................................................................................................... 15
Company Description:.......................................................................................... 15
Dell.............................................................................................................. 15
HP................................................................................................................ 16
Mission of Hp:................................................................................................... 17
Customer Oriented Mission statement of Hp:..............................................................17
Vision of HP:...................................................................................................... 18
Mission of Dell:.................................................................................................. 18
Customer Oriented Mission statement of dell:.............................................................19
Vision of Dell:.................................................................................................... 20
Business Portfolio................................................................................................ 21
HP Vs DELL.................................................................................................... 21
Laptops.......................................................................................................... 21
Personal & Business...................................................................................... 21
Business Laptops.............................................................................................. 22
Tablets........................................................................................................... 23
Desktops........................................................................................................... 23
Personal......................................................................................................... 23
Business Desktops............................................................................................ 23
Monitors........................................................................................................ 24
Printers.......................................................................................................... 24
Scanners........................................................................................................ 25
Calculators..................................................................................................... 25
Dell.............................................................................................................. 25
Laptops.......................................................................................................... 25
Tablets........................................................................................................... 26
Desktops........................................................................................................ 26
2
Server........................................................................................................... 27
Accessories..................................................................................................... 27
Chapter 2.......................................................................................................... 28
Market analysis........................................................................................... 28
Dell s.w.o.t analysis..................................................................................28
SWOT Analysis Hewlett Packard............................................................................. 28
Strengths........................................................................................................ 29
Strong Market Position:..................................................................................29
Prominent Brand Name Recognition:..................................................................29
Successful Strategic Acquisitions:......................................................................30
Weaknesses..................................................................................................... 30
Weak Market Segment Integration:....................................................................30
Opportunities.................................................................................................. 31
Expanding presence in cloud computing market:...................................................31
Expanding portfolio of imaging and printing solutions:............................................31
Threats.......................................................................................................... 32
Projected decreases in the IT markets:.................................................................32
Hyper-competitive environment:.......................................................................32
Prominent Brand Name Recognition...................................................................33
Successful Strategic Acquisitions:......................................................................33
Target market of Dell:........................................................................................... 34
Target Market.................................................................................................... 34
Customer needs................................................................................................... 34
Corresponding features......................................................................................... 34
Target market of Hp:............................................................................................ 37
Target market..................................................................................................... 37
Customer need.................................................................................................... 37
Corresponding features......................................................................................... 37
Competitors Profile.............................................................................................. 40
Top Competitors for Hewlett-Packard Company.......................................................40
Competitive Advantage...................................................................................... 40
Dell competitive advantage.................................................................................40
Hp competitive advantage...................................................................................41
3
Unique selling point.......................................................................................... 42

Unique selling point of Dell................................................................................42
Unique selling point of HP.................................................................................. 43
Point of Differentiation of HP and Dell and POD Advantages.......................................44
Positioning and Differentiation................................................................................ 44
Positioning..................................................................................................... 44
Differentiation................................................................................................. 44
Number of Companies within the Industry.................................................................46
Dell........................................................................................................... 46
Sony.......................................................................................................... 46
HP............................................................................................................ 46
Apple......................................................................................................... 47
Gateway..................................................................................................... 47
Annual Revenues................................................................................................. 47
Hp Current Situation......................................................................................... 47
Dell Current Situation........................................................................................ 47
Apple Current Situation..................................................................................... 47
Gateway Current Situation:................................................................................. 47
Global PC Market share by units sold....................................................................48
Computer Sales................................................................................................ 48
Region of sales(Geographical).............................................................................49
Strength of Industry............................................................................................. 50
Geographical Pie Chart...................................................................................... 50
Chapter 3....................................................................................................... 60
Industry Life Cycle.......................................................................................... 60
STAGES OF THE LIFE CYCLE..........................................................................61
Introduction................................................................................................. 61
Growth.......................................................................................................... 62
Maturity.................................................................................................... 63
Decline....................................................................................................... 64
PESTEL Analysis HP........................................................................................... 66
Political:........................................................................................................... 66
Economical:....................................................................................................... 66
4
Social:.............................................................................................................. 66
Technological:.................................................................................................... 66
Environmental:................................................................................................... 67
Legal:............................................................................................................... 67
PESTLE ANALYSIS Dell...................................................................................... 67
Political......................................................................................................... 67
Economic....................................................................................................... 68
Sociological.................................................................................................... 68
Technological.................................................................................................. 68
Legal............................................................................................................ 69
Dell was fined $4 million for fake and misleading advertising about PCs sold to consumers in
New York. While in New Orleans, there are two companies which claim Dell is selling a
surveillance camera system by conspiring with city officials. This shows that Dell is being
interrupted by the legality of their actions in different countries.....................................69
Environmental................................................................................................. 69
Porters Five Forces Analysis.................................................................................. 70
Threat of Entry:................................................................................................... 70
Threat of Substitutes:............................................................................................ 70
The Power of Buyers:........................................................................................... 70
The Power of Suppliers:........................................................................................ 71
HP negotiating energy of providers is great. There are large amount of providers for every
element areas of the PC, for example, one can make a PC by using element areas from different
providers, including hard disk drive, DVD drive, observe, etc. Microsoft and Apple have
tremendous negotiating energy against the PC producers. There are great changing costs........71
Competitive Rivalry:............................................................................................ 71
Competition is high. For example, cost, when one company functions to secure its place by
decreasing the cost of PCs, it will impact other organizations. This implies all other
organizations may want to reduced their cost in order to entice the clients. There is also
reducing productivity. Since the organizations offer their PCs in a low cost, they will make less
benefit........................................................................................................... 71
Dell Porter five forces........................................................................................ 71
PORTER FIVE FORCES ANALYSIS................................................................71
Dell is very popular for custom-built PC and other computer relevant items and promoting
them online. Dell is very effective with regards to working with its providers and
maintaining the stock near to zero level which allows the company to evolve JIT technique
which decreases the costs to the ultimate customer.................................................71
5
The bargaining power of suppliers.....................................................................71

Threat of new Entrants....................................................................................73
As it has been mentioned by Eileen Dell, his only worry about his company kingdom is the
chance of new newcomers to the industry who could negatively impact his company. And
moreover, Dells new technique is the item diversification; therefore, almost all digital
organizations are prospective newcomers to this new industry.......................................73
Bargaining power of Customers...........................................................................73
Availability of substitutes:...................................................................................74
In the computer market this is a very extremely present. A lot of items such as a laptop
computer, an eye or cell cellular phones provide the same services and are therefore
exchangeable. Only if items are very particular such as for example the illustrating program;
Photoshop a alternative would be hard to alternative. Things that will help tie clients to the
product or item, would be good item difference, reduced costs, react o technological
innovation changes and being impressive.............................................................74
COMPETITIVE RIVALRY............................................................................. 74
Competitors among opponents is extremely affected by the above described four causes. Dell is
coming into into a international industry and given the durability of these causes in international
situation, competition for dell is very high..................................................................74
Logistics of HP................................................................................................... 74
Supply Chain.................................................................................................. 74
Value chain........................................................................................................ 76
We can see, the value sequence involves the whole company and looks at how main and
assistance actions can perform together successfully and successfully to help obtain the company
a excellent aggressive benefits................................................................................. 76
Follow the Porters value sequence design we analyze the main and helpful actions independently
for HPs roles as below.......................................................................................... 76
Primary Activities................................................................................................ 76
Inbound Logistics............................................................................................. 76
Operation....................................................................................................... 76
Outbound Logistics........................................................................................... 77
Marketing and Sales.......................................................................................... 77
Service.......................................................................................................... 77
Support Activities................................................................................................ 77
Procurement.................................................................................................... 77
Technological Development................................................................................78
Human Resources Management............................................................................78
6
Firm Infrastructure............................................................................................ 78
BCG Matrix of Hp:.............................................................................................. 78
Chapter 4.......................................................................................................... 79
HP MANAGEMENT STYLE................................................................................. 79
BCG MATRIX OF DELL...................................................................................... 81
Dell MANAGEMENT STYLE............................................................................... 83
Staffing............................................................................................................. 84
Dell Recruitment Process....................................................................................... 85
HP Recruitment Process........................................................................................ 87
Operation performed by HRM and HRD in HP and Dell................................................88
Designation Hierarchy of Dell:................................................................................ 90
Designation Hierarchy of HP:................................................................................. 91
Training Plans of HP............................................................................................ 93
Our approach...................................................................................................... 93
Training plans of Dell........................................................................................... 96
Your development at Dell...................................................................................... 96
The Dell development model.................................................................................. 96
Talent Planning................................................................................................... 97
Performance Planning........................................................................................... 98
Learning and Development.................................................................................... 98
Learning through Experience and Others.............................................................99
Training and Learning Programs........................................................................99
Organizational Culture of HP:................................................................................. 99
Dells Corporate Culture...................................................................................... 100
LEADERSHIP STYLES OF DELL........................................................................101
LEADERSHIP STYLES OF Hp............................................................................102
DESCRIPTION OF STYLES............................................................................ 102
Leadership Styles........................................................................................ 103
REWARDS OF Hp...................................................................................... 105
About Good Cards....................................................................................... 107
Benefits ,Rewards, Balance. Have it all at Dell.......................................................107
LOGISTICS OF DELL....................................................................................... 108
Logistics Services........................................................................................... 108
7
Packaging................................................................................................. 108
Take advantage of our extensive global supply chain and exceptional logistics capability.
............................................................................................................... 109
3rd Deliverable.............................................................................................. 110
Chapter 6..................................................................................................... 110
HP and DELL Ratio Analysis - Two-Year Comparison.................................................110
Liquidity ratios.............................................................................................. 110
Current Ratio................................................................................................ 110
Ratio Quick.................................................................................................. 111
Defensive Interval Days...................................................................................111
Accounts Receivable to Working Capital..............................................................112
Long Term Liabilities to Working Capital.............................................................113
Sales to Working Capital..................................................................................113
Activity Ratios.................................................................................................. 114
Accounts Receivable Turnover...........................................................................114
Days Sales in Receivables................................................................................. 114
Operating Cycle Days...................................................................................... 114
Sales to Assets............................................................................................... 115
Percent Depreciation Expense to Fixed Assets........................................................116
Percent Accumulated Depreciation to Fixed Assets..................................................116
Fixed Assets to Equity Net................................................................................116
Profitability ratios.............................................................................................. 117
Percent Gross Profit........................................................................................ 117
Percent Profit Margin on Sales...........................................................................117
Percent Rate of Return on Assets........................................................................117
Percent Rate of Return on Equity........................................................................118
Coverage ratios................................................................................................. 118
Debt to Total Assets........................................................................................ 118
Percent Owners Equity.................................................................................... 119
Equity Multiplier............................................................................................ 119
Debt to Equity............................................................................................... 119
Cash Flow to Current Maturities Long Term Debt...................................................120
Times Interest Earned...................................................................................... 120
8
Expense to sales ratios..................................................................................... 120

Percent Depreciation to Sales.............................................................................120
DELL COMPANY............................................................................................ 132
DETAILED RATIO ANALYSIS-INDUSTRY COMPARISON......................................132
LIQUIDITY RATIOS:........................................................................................ 132
Current Ratio................................................................................................ 133
Quick Ratio............................................................................................... 133
Sales to Working Capital...............................................................................133
ACTIVITY RATIOS:...................................................................................... 134
Sales to Assets............................................................................................ 135
Sales to Net Fixed Assets...............................................................................135
Net Fixed Assets to Equity.............................................................................136
Profitability Ratios:......................................................................................... 137
Percent Rate of Return on Assets.....................................................................137
Percent Rate of Return on Equity.....................................................................137
Coverage Ratios:............................................................................................ 138
Debt to Equity............................................................................................ 138
Times Interest Earned...................................................................................139
Expense to sale ratio:....................................................................................... 139
Percent Depreciation to Sales.........................................................................139
HP COMPANY................................................................................................. 140
DETAILED RATIO ANALYSIS-INDUSTRY COMPARISON......................................140
LIQUIDITY RATIOS:........................................................................................ 140
Current Ratio................................................................................................ 140
Quick Ratio............................................................................................... 141
Sales to Working Capital...............................................................................141
ACTIVITY RATIOS:...................................................................................... 142
Sales to Assets............................................................................................ 143
Sales to Net Fixed Assets...............................................................................143
Net Fixed Assets to Equity.............................................................................144
Profitability Ratios:......................................................................................... 145
Percent Rate of Return on Assets.....................................................................145
Percent Rate of Return on Equity.....................................................................145
9
Coverage Ratios:............................................................................................ 146

Debt to Equity............................................................................................ 146
Times Interest Earned...................................................................................147
Expense to sale ratio:....................................................................................... 147
Percent Depreciation to Sales.........................................................................147
Chapter 7..................................................................................................... 149
Hp- Overview of the Financial Results.................................................................149
Dell- Overview of the Financial Results...............................................................157
Key ratio summary of HP.......................................................................166
Key ratio summary of DELL.......................................................................167
BIBLOGRAPHY............................................................................................... 169
REFERERNCES........................................................................................... 169
10
11
12
DEDICATION
We dedicate our dissertation work to our family and many friends. A special feeling of
gratitude to our loving parents. We also dedicate this dissertation to our many friends and
church family who have supported us throughout the process. I will always appreciate all
they have done, especially Mam Hira aftab for helping us develop my technology skills
for the many hours of proofreading.
We dedicate this work and give special thanks to our best friends.
13
Acknowledgement
First and foremost We would like to express our thanks to God because of His love and
strength that He has given to us to finish this logbook as our Final project report. We do
thank for His blessings to our daily life, good health, healthy mind and good ideas. This
report is important to fulfill part of the program criteria that is a requirement to fulfill the
Bachelor Program in Business Information Technology. We know that there are still many
lacks of arranging this report even when doing my job training and we thank to those who
have supported us to perform the work tasks up to carrying out this report. Hereby We
want to give our special thanks to:
Special thanks to Family for give opportunity to us to learn and get the real work
experience .
Mam Hira Aftab - Our beloved lecturer, for her kindness, advice, knowledge,
patience, and time to teach us to be more confident person that we are going to
use in work world.
Friends - Special thanks to all my friends for sharing their experiences, time and
commitment especially during finishing this program. We are grateful because We
have a lot of friends were helps and support me throughout the course of
completing the final project.
14
Abstract
Dell and HP are two most famous Computer companies. We have done a comparative
analysis of these two companies. This project will tell you in detail about the financial
position of HP and DELL as well as you will get the detail comparison of HP and DELL.
This finance project report on ratio analysis to assess the financial strengths and
weakness of HP and DELL through FINANCIAL RATIO ANALYSIS. This ratio analysis
is used
To evaluate the performance of the company by using ratios as a yardstick

to measure the efficiency of the company.
To understand the liquidity, profitability and efficiency positions of the

company during the study period.
To evaluate and analyze various facts of the financial performance of the

company.
To make comparisons between the ratios during different periods
Keywords
Ratio analysis of DELL, ratio analysis of HP, trend analysis of HP, forecasting of HP,
trend analysis of DELL, comparative analysis, management style of DELL and HP,
forecasting of DELL, industry comparison of DELL, industry comparison of HP, group
comparison of DELL , group comparison of HP, liquidity analysis of DELL and HP,
bankruptcy test of DELL and HP.
Abbreviations
ROE: Return on equity
ROA: Return on asset
USPs: Unique Selling Points
TIE: Interest coverage ratio
15
NI: Net income

EPS: Earning per share
Chapter 1
Company Description:
Dell
Dell Inc. is an United states secretly owned or operated international laptop or computer
technological innovation organization situated in Round Rock, Texas, Usa, which builds
up, repairs and supports computors along with similar products or services. Having your
brand of it is creator, Michael Dell, this company is probably one of the greatest
scientific companies on the planet, using in excess of 103, 3 hundred men and women
world-wide.
Dell carries personal computers, hosting space, facts hard drive gadgets, circle switches,
software program, computer peripherals, HDTVs, cameras, printers, MP3 FORMAT
gamers plus electronics developed by means of different makers. This company
established fact for the improvements with present string supervision along with
electronic trade, specifically its direct-sales product and its particular "build-to-order" as
well as "configure to help order" method of manufacturingdelivering specific
Computers designed to help client specs. Dell had been a genuine electronics vendor
regarding most of its living, however a couple of years back while using the order
involving Perot Devices, Dell moved into the market for this products and services. This
company features considering that produced additional acquisitions with hard drive along
with networking programs, using the purpose of growing his or her profile via supplying
computers only to supplying full options regarding enterprise customers.
It was some sort of widely bought and sold organization (NASDAQ: DELL), in addition
to a element of your NASDAQ-100 in addition to S&P 500, until eventually it was
considered private in a leveraged buyout which often sealed with July 40, 2013. Upon
April. twenty nine, 2013, Dell introduced your completion of it is purchase by simply
16
Eileen Dell, Dell's creator in addition to TOP DOG, in addition to Silver Body of water
Spouses, a respected worldwide engineering organization.
Under the terms of an merger agreement, Dell stockholders may find $13.75
throughout cash for each share of Dell common stock they hold, and as well check
of a special dollars dividend of $0.13 per share in order to stockholders connected
with Log Just as of your close regarding corporation with Oct. 28, 2013,
pertaining to total bill connected with $13.88 per share within cash. the total
check can be valued with approximately $24.9 billion.
http://en.wikipedia.org/wiki/Dell
http://www.dell.com/learn/us/en/uscorp1/secure/acq-dell-silverlake
HP
Hewlett-Packard Company as well as HEWLETT PACKARD is surely an Us
multinational IT firm headquartered throughout Palo Alto, Usa. It gives you computer
hardware, software package as well as products and services to customers, small- as well
as medium-sized corporations (SMBs) as well as large companies, which includes buyers
inside federal, health and knowledge significant.
The organization ended up being founded within a one-car storage area throughout Palo
Alto through Bill "Bill" Redingote Hewlett as well as Dave Packard. HEWLETT
PACKARD could be the earth's foremost COMPUTER company possesses recently been
due to the fact 2007, fending away from a challenge through China company Lenovo, as
outlined by Gartner. This focuses primarily on creating as well as production calculating,
files storage devices, as well as network computer hardware, planning software package
as well as giving products and services. Significant products contain private calculating
devices, venture as well as industry standard computers, associated storage devices
devices, network products, software package plus a different range of units and other
imaging products. HEWLETT PACKARD areas it's products to families, small- to
medium-sized corporations as well as companies directly along with by means of on the
web submitting, consumer-electronics as well as office-supply suppliers, software
package associates as well as key technological know-how suppliers. HEWLETT
PACKARD also offers products and services as well as talking to small business close to
it's products as well as associate products. Inside 2012 it was the actual earth's major
COMPUTER vendor through system income.
17
http://prezi.com/b4tsdtu-ljyu/history-of-hp-company/
http://www.achevx.com/partners/hp-hewlett-packard-company
Mission of Hp:
To offer items, solutions and alternatives of the finest high quality and offer more value to
our clients that generates their regard and commitment.
It is the best objective in our assessment so far. HP is one of the few to bring up all 4:
citizenship, group interaction, high quality and reliability as their principles. These
principles are the most typical to the best executing business all over the globe. HPs
declaration provides all the important details about the company and its reason for being
in the business to all of its stakeholders: workers, clients, investors, providers and
associates.
Customer Oriented Mission statement of Hp:

To provide product, solutions, alternatives of the finest top quality and deliver more value
to our clients that generate dedication, regard and their love.
Underlying values assisting this objective:
Our ongoing achievements is reliant on the ongoing dedication of the clients. Listen
carefully to our clients to truly understand their needs, then providing alternatives that
convert into client achievements is essential to generate client dedication. Competitive
cost of owner deliver, top quality, innovation and the way we do company pushes client
dedication.
On these areas they focus upon:
Customer loyalty: We generate client regard and dedication by continually providing the
finest top quality and value.
Profit: We accomplish sufficient benefit to finance development, create value for our
investors and accomplish our corporate goals.
Growth:We identify and take opportunities for development that develops upon our
strong points and capabilities.
18
Market leadership: We cause in the marketplace by developing and providing useful and
impressive products, solutions and alternatives.
Commitment to employees: We illustrate our dedication to workers by advertising and
fulfilling based on performance and by creating a workplace that shows our principles.
Leadership capability: We build management at all levels who accomplish company
results, reflect our principles and cause us to grow and win.
Global citizenship: We meet our liability to community by being an economic, perceptive
and social resource to each country and community where we do company.
Vision of HP:
To perspective modify in the market as an probability to grow; to use our earnings and
our capability to create and generate impressive products, services and alternatives that
fulfill growing client needs.
Mission of Dell:
Our objective is to be the most effective IT techniques organization on the globe by
providing the best client encounter in all marketplaces we provide. In doing so, Dell will
fulfill client objectives of:
highest quality
leading technology
competitive pricing
individual and organization accountability
best-in-class support and support
exible personalization capability
superior business citizenship
Customer Oriented Mission statement of dell:

Dell already runs on the personalized set up procedure centered on a FMS(flexible
production system) to complete client purchases.
19
To improve versatility, the organization should look for ways to improve the potency of
information
Net works to improve perform flow and interaction among workers to recognize and take
care of problems that appear. Developments in details linkages would confirm
particularly beneficial as dell looks for to improve services for its business clients.
Total top quality management is another managing advancement that focus the
organization complete dedication to the clients and to ongoing enhancement of every
procedure through the use of data motivated, troubleshooting techniques depending on
power of worker groups and groups.
The development and use of TQM techniques at ell would arrange activities with the
organization ideal needs and would simultaneously serve to
increase client satisfaction
cut costs
reduce how long required to present impressive products to the industry.
All of these goals have been recognized as critical factors that will impact Dell's future
success.TQM techniques result in the enhancement of impressive capabilities, the ability
to surpass customers top quality goals and the removal of handling efficiency to cut
expenses (allowing Dell to offer better performing features at the relatively low prices
expected by Its customers).
Thus, an effective TQM program will help Dell develop theflexibility needed to
recognize opportunities to apply itsintegrated cost leadership/differentiation strategy.
Because TQMsystems are available to all opponents, they may help thecompany maintain
aggressive equality, but hardly ever will theyunilaterally lead to a aggressive advantage.
On these areas they focus upon:
Customer loyalty: Dell earn client regard and dedication by continually targeted on
personalization and providing the finest top quality and value.
Commitment to employees: We always advertising and fulfilling depending on
performance and by creating a workplace that shows our principles. And we are giving
what we have dedicated.
20
Vision of Dell:
It is the way we do company. It is the way we communicate with the group. It is the way
we understand the globe around us-our customers needs, the long run of technological
innovation, and the international company environment.. Whatever changes the long run
may carry our perspective -- Dell Vision -- will be our directing power.
So Dell needs complete client care. In order to become the most effective computer
company, they need the latest technological innovation and faithful clients. It is the way
we communicate with the group. It is the way we understand the globe around us- our
customers needs, the long run of technological innovation.
Business Portfolio
HP Vs DELL
Hp has following width:
Laptops
Tablets
Desktops
Scanners
Printers
21
Calculators
Services And Apps
Hp has following depth:
Laptops
Personal & Business
Personal
Premium computing
o Hp pavilion14-n200
o Hp statebook 10-h000 x2
o Hp envy j100 notebook
o Hp pavilion 15-n000
Create and entertain
o Hp envy 15 j100
o Hp envy 14 k000
Everyday computing
o Hp pavilion 10-e000
Safe and simple
o Hp 14-d000
Business Laptops
Sophisticated image
o Hp probook 640 G1
o Hp elitebook folio 1040 G1
o Hp elitebook 820 G1
o Hp elitepad 1000 G2
Mission critical
o Hp elitebook 8470w
o Hp elitebook 850 G1
Everyday productivity
o Hp elitebook revolve 810 G2
o Hp state 7 plus business
Simple efficiency
22
o Hp probook 640 G1
Tablets
o Hp elitebook revolve 810 G2
o Hp State 7 plus business
Desktops
Personal
Premium computing
o Hp envy recline 23-m200
o Hp state 21-k100
o Hp pavilion 20-b300
Create and entertain
o Hp envy recline 23-k100
o Hp envy 700-200
o Hp envy recline 27k000
Everyday computing
o Hp pavilion f200
Safe & Simple
o Hp slate 21-k100
o Hp 18-5000
Business Desktops
Mission critical
o Hp eliteone 800 G1
23
o Hp elitedesk 800 G1
o Hp 8200 elite micro tower
o Hp 8200 elite ultra-slim
Everyday productivity
o Hp prodesk 400 G1 small form factor
o Hp 6200 pro small form factor
o Hp 6200 pro micro tower
o Hp pro 3335 micro tower
Simple efficiency
o Hp 800 G1 All in one pc
o Hp 400 G1 small form factor pc
o Hp 800 G1 tower pc
o Hp 6200 pro small factor pc
Monitors
o
o
o
o
Hp pavilion 23fi 23-inch diagonal IPS LED backlit monitor

Hp pavilion 25xl 25-inch diagonal IPS LED backlit monitor
Hp pavilion 22fi 21.5-inch diagonal IPS LED backlit monitor
Hp pavilion 27xl 27-inch diagonal IPS LED backlit monitor
Printers
o
o
o
o
o
Hp deskjet ink advantage 2645 (All in one printer)

Hp deskjet ink advantage 2545 (All in one printer)
Hp deskjet 1510 (All in one printer)
Hp deskjet 1510 (All in one printer)
Hp deskjet 1010
Scanners
o Hp scanjet enterprise flow 7000 s2 sheet-freed scanner
24
o Hp scanjet enterprise flow N9120 flatbed scanner

o Hp scanjet enterprise flow 7500 flatbed scanner
o Hp digital sender flow 8500 fn1 document capture workstation
Calculators
o Financial calculators
o Graphical calculators
o Scientific calculators
o Convenience calculators
Dell has following width:
Laptops
Tablets
Desktops
Server
Accessories
Dell has following depth:
Laptops
Latitude E6440
Inspiron 15R
Latitude 15 3000 series
Inspiron 17R
New inspiron 15
Inspiron 17
25
Tablets
Venue 7
Venue 8
Dell venue pro 11
Venue pro 8
Desktops
Dell Precision t1700 mini tower workstation

New inspiron desktop 3000 series
New inspiron small desktop 3000 series
Optiplex 7010 mini tower
Optiplex 9020 All in one
XPS 8700
Server
PowerEdge T110 II
PowerEdge R210 II
PowerEdge T320
PowerEdge T620
Accessories
Dell (Monitor) Deals

Printers , inks, toner
26
Accessories of pcs
Softwares
Smart phones for business deals
HDTVs and commercial deals
Projector
Camera
Storage
Networking
Chapter 2
Market analysis
Dell s.w.o.t analysis
Opportunities
Obtain more patents through acquisitions
Strengthen their presence in emerging

markets
Threats
Growing demand for smart

phones and tablets
Profit margin decline on

hardware products
Tablet market growth
SWOT Analysis Hewlett Packard

This SWOT analysis is about Hewlett Packard.
27
Strengths
Strong Market Position:
Recently (April 2010), Hewlett-Packards shares closed at $53.15. According to
NASDAQ, the stock is up 62% in the past year, better than the market at large.
This continues a trend that saw the company ease pass the previous global pc
leader Dell in 2006. In 2008 Hewlett Packard led Dell with over 17% of the PC
Market while Dell settled for second at 14%. In addition Hewlett Packard can
boast of a 30% of the global server market. Its domination of the global printer
market is evidenced by its 40% market share. In 2008 Hewlett Packard took a
major step in strengthening its position in the IT services market by acquiring ED
Successful Strategic Acquisitions:

Hewlett Packard continues its trend of recognizing and capitalizing on strategic
acquisitions. The companys major mergers and acquisitions in recent past include
Compaq Computer Corporation in 2002, Mercury Interactive in 2006 and
Electronic Data Systems Corporation (EDS) in 2008. In November of 2009,
Hewlett Packard announced that it had reached an agreement to acquire 3Com, a
provider of computer network equipment, for $2.7 billion in a deal that H.P. plans
as a the beginning of an assault on the market leader in networking, Cisco
Systems. Computer networking is a $40 billion-a-year market with high profit
margins that is growing briskly and dominated by Cisco, which has so far had
little head-to-head competition. The companys successful inorganic growth
allows it to increase its competitiveness as well as create value for both investors
and customers of the company.
Weaknesses
Weak Market Segment Integration:
Although Hewlett Packard is currently addressing its lack of presence in some
28
seemingly obvious segments, there remains room for improvement. The

companys portfolio of offerings lack significant software product or manage
consulting services when compared to major competitors including, Accenture,
EMC and IBM. For example, both IBM and Accenture are establishing
management consulting divisions so as to provide more comprehensive and
integrated range of services. Recently, Hewlett Packard has partnered with
Thomson e Ximius to provide front office processes for private client wealth
management firms to support the increasingly sophisticated needs of their
customers.
Opportunities
Expanding presence in cloud computing market:
Cloud computing describes a new delivery model for IT services. In July 2008,
HP along with Intel Corporation and Yahoo! created a global, multi-data center,
open source test bed for cloud computing research and education. The goal of the
project was to promote collaboration among industry, academy and governments
by removing the financial and logistical barriers. In 2009, HP announced HP
Cloud Assure, a new SaaS offering designed to assist businesses to safely and
effectively adopt cloud-based services. HP Cloud Assure consists of HP services
and software, including HP Application Security Center, HP Performance Center
and HP Business Availability Center. These solutions are delivered to customers
though HP SaaS platform. The increasing demand for cloud computing is likely to
create demand for HPs solutions in coming years. The global spending on cloud
computing is forecast to cross a value of over $40 billion by 2012.
Expanding portfolio of imaging and printing solutions:

Hewlett Packard has made several strategic acquisitions and introduced new
products in the imaging solutions segment in recent times. Its imaging solutions
strategy entails the commercial markets, from print services solutions to new
growth opportunities in commercial printing and capturing high-value pages in
29
areas such as industrial applications, outdoor signage, and graphic arts. Among
those key acquisitions are Tabblo, Logoworks, MacDermid and ColorSpan.
HP has launched several retail photo printing solutions and services that provide
consumers the tools to personalize their photos and publish customized creative
output. In addition, it has introduced new digital printing technologies, HP Inkjet
Web Press, HP Latex Inks and three HP Indigo presses, as part of its graphic arts
offerings. In October 2008, it also announced a plan to launch full wireless HP
Photo smart printer lineup by 2010.
Threats
Projected decreases in the IT markets:
Forecasters predict a decrease in the worldwide demand for various IT products
offered by HP. The economic slowdown has negatively affected many market
segments, including information technology. Hewlett Packard has experienced
this decline not only in the U.S. but also in its global markets. Worldwide
spending on IT was predicted to decline by 4% in 2009.
Successful Strategic Acquisitions:

Hewlett Packard continues its trend of recognizing and capitalizing on strategic
acquisitions. The companys major mergers and acquisitions in recent past include
Compaq Computer Corporation in 2002, Mercury Interactive in 2006 and
Electronic Data Systems Corporation (EDS) in 2008. In November of 2009,
Hewlett Packard announced that it had reached an agreement to acquire 3Com, a
provider of computer network equipment, for $2.7 billion in a deal that H.P. plans
as a the beginning of an assault on the market leader in networking, Cisco
Systems. Computer networking is a $40 billion-a-year market with high profit
margins that is growing briskly and dominated by Cisco, which has so far had
little head-to-head competition. The companys successful inorganic growth
allows it to increase its competitiveness as well as create value for both investors
30
and customers of the company.
Target market of Dell:
School students
College students
Gamers
Women
Business
Professionals
Target Market
Customer needs
Corresponding
features
School students:
Needs
primarily school
Fun colors and design.

Play videos and
students
.Share some
games.
Educational software
Age 8-15
2GB RAM,
250 GB HARD
DISK,
Front Camera,
Super Combo (dvdwriter & CD-Writer)
256mb Dedicated
characteristics of
MS office and
teenagers.
High level of
window 8.
Widescreen,HD
AGP Card LAN,

MODEM, WIFI,
_Watching movies
Spill resistant,
Bluetooth,
1hr
technology.
10% users of
home computers
and internet.
College students:
Plus Battery Backup,
webcam and
Microphone
Communication.
Needs
Processor type: core
i3(3rd gen)
Hard disk:500 GB
31
Age 17-25 college
students.
Immersed in
computer culture
from a young age.

Generally receive
funding from
outside resource .
Multipurpose
laptop(recreational
and business)
Fast processor
Good sound system
and graphics
Light weight
Long battery life
Vibrant colors
Ram:2gb
Card reader: yes
Screen size:15.6
Graphic pro
cessor:intel chipset
HD
Bluetooth,
lan,wifi:yes
Battery time: more
than 4 hours
Camera:yes
No of effective
pixels:1 MP HD
webcam
Operating system:
dos
Gamers
Age group varies

Computer savvy
individuals
Seek state of art
techno logy
Low medium
Needs
Durable, long lasting

Sleek design
Speed
Lots of memory
Good graphics
Inbuilt VGA port

2GB RAM,
250 GB HARD
DISK,
Front Camera,
Super Combo (dvdwriter & CD-Writer)
income
256mb Dedicated
WOMEN
Age group 18-45
years
If she is a college
student funding
will be from other
Needs
Sleek design
Speed
Stylish
AGP Card LAN,

MODEM, WIFI,
Bluetooth,
1hr Plus Battery Backup.
Installed ram:2gb
Hard drive:500gb
Card reader: yes
Screen size:14
Graphic
processor:intel
chipset HD
32
sources
For a working
professional
income will be
Low budget laptops

Durable
Good sound quality,
Bluetooth ,LAN, WI
fi:yes
Battery time: more
than 4 hours
Hd display
medium-high
Business professionals
Age 18-65 years

of business
professionals
Hard working
Well educated
Located with in
cities
Middle_ upper
Needs
Durable ,dynamic and
unique
Sleek design
Fast processor
Mid-level price range
Up-to-date versions of
Processor: core i5
Ram:6gb
Type of
memory:ddr3
Hard drive size:750
gb
Card reader: yes
Graphics
memory:intel
computer applications
class income
hd4400
Graphic
processor:intel
chipset hd
Screen size:15.6 hd
led
Processor
speed:1.6ghz turbo
boost up to 2.6ghz
Target market of Hp:
Target market
Customer need
Students
They are
Good sound system
Corresponding features
Processor speed:2.4 ghz

Hard disk:500 gb
33
specially
concerned with
prices
and graphics
Light weight
Long battery life
Fun colors and
design.
Educational
software_Ms office
and window 8.
Multipurpose
laptop
Detectors
Needs
Most advanced
technology
Up-to-date versions
of computer
applications
Fast processor
Ram:2gb
Card reader: yes
Screen size:15.6
Graphic processor:intel
hd graphics 4000
Bluetooth, lan,wifi:yes
Battery time:2-3 HOURS
Camera: yes
No of effective pixels:
1.3 MP
Operating system: dos
Processor type: intel core
i-7
Processor speed:2.2 GHz
Hard disk:1 tb
Ram:4gb
Card reader: yes
Screen size:15.6
Graphic processor: AMD
radon HD 7670M
Bluetooth , lan, wifi: yes
Battery time:3-4 hours
Camera: yes
Hp true visionhd webcam
with integrated dual ray
micro phone
Women
Age group 18-
45 years
If she is a
college student
funding will be
from other
sources
Needs
Sophisticated
computers thats
look good.
Sleek design
Speed
Stylish
Durable
Good sound

Card reader: yes
Screen size:15.6
Graphic processor:intel
hd graphics
Bluetooth, lan,wifi:yes
Battery time:41W
Camera: yes
No of effective pixels:Hp
true vision
34
For a working
quality,Hd display
professional
income will be
medium-high
Home and business
users
Well educated
Located with in
cities
Middle_ upper
NEEDS
Wants reliable
Lightweight
models
Models should
class income
have maximum
Processor type: intel Core
i-5
Processor speed:1.8ghz
Hard disk:500 gb
Ram:2gb
Screen size:15.6
Graphic processor:
intelhd graphics 4000

Bluetooth, lan ,wi fi: yes
Battery time:2-3 HOURS
Camera: yes
portability and ease

of use in different
environments.
1.3 MP
Competitors Profile
Top Competitors for Hewlett-Packard Company
The primary competition connected with HP usually are Dell, Acer, Apple company
along with Lenovo. Dell ended up being next after HP along with Acer. Number of
products sold by HP is actually 20. 6 zillion whereas in which connected with Dell ended
up being 13. 6 zillion products. The place that the some other producers are present
within the consumer shops, Dell is not.
There are various Dell competition. They may be: Sony, Acer, Gateway, Lenova, IBM,
NEC, Tangent, at the Machines, Super Tiny, Apple company, Unisys, Unfamiliar ware,
HP/Compaq, Toshiba, along with Apple company Computer systems.
35
Competitive Advantage
A competitive advantage is definitely an advantage over competitors obtained by means
of supplying shoppers better price, by way of cheaper costs or perhaps by giving better
advantages along with service which justifies greater costs (Tutor2U 2005).
http://www.tutor2u.net/business/strategy/competitive_advantage.htm
Dell competitive advantage

In order that Dell to attain aggressive advantage, Immediate offering and over time output
are already an important part of his or her technique. This strategy possesses empowered
Dell to attain price tag rewards around it's competitors (Hansen, Nhoria& Tierney 1999).
Immediate offering implies that Dell carries it's solutions right to the customer. This
permits Dell to help generate earlier mentioned average gains because costly
intermediaries from the supply cycle are already eradicated. Dell technique in essence
starts off with all the consumer as well as finish with all the consumers. It's 5 essential
simple steps, 1st phase was ways to get construct the most productive path to the
customer, Dell believe the most productive path to the customer is a by way of immediate
relationship without any intermediaries to incorporate confusion as well as price tag.
Second of all, the single place involving accountability- they will believe technological
innovation at some point turn out to be far too intricate, thus developing items as well as
producing its straightforward was the true secret actions.
Thirdly- developing the models (computer) in line with Obtain. They sported a thought
about how they ought to construct computer using the consumer has to have. By simply
quick modifying as well as placing your order from the business site will assist the
customer construct just what exactly his or her have to have.
Fourthly- it truly is a low cost head. They highlighted about the consumer requires,
through starting up it's output from the best as well as productive means. Within northern
involving Round Rock, just northern involving Austin the place that the manufacturer is
areas, the method starts off having an empty computer box starts using this finish, goes
through a remarkably and many productive manufacturer brand, which in turn go through
36
different department as well as emerge with all the finish solution. This process takes
ninety days minute, when the output brand is functioning proficiently.
Finally the Dell Box is crammed as well as shipped to the customer inside four days to
weeks. The most important factor is Effectiveness. Supplier has built his or her industrial
facilities within reach as well as supply has been kept minimal.
Hp competitive advantage
HP Company Analytics Solutions concentrate on supplying functional, day-to-day
analytical demands that can help clients acknowledge and recognize probable
possibilities. HP works carefully using clients to create, run and produce analytics in
which service well-timed and actionable insights. These products and services support
service clients using quicker and better insights around a number of capabilities for
instance marketing, product sales, shoppers, source sequence, financial and recruiting.
Your products and services tend to be adaptable and technologies agnostic, doing work
around numerous deployment and system options. Also, HP analytics specialists leverage
improvements designed as a result of HP Labs, you re able to send key investigation
adjustable rate mortgage, and also software via Vertical and Autonomy, each HP
companies, to produce awareness via set up and unstructured information. Your products
and services additionally leverage HP's selection of Information Management and
Analytics technologies and apps attractions. Put together, these kinds of comprehensive
features enable linked cleverness within and beyond the corporation to compliment
progress.
HP analytics specialists support clients using numerous analytic activities to help derive
actionable insights in which meet the industry-specific demands inside selected time
period structures. For instance, HP Company Analytics Solutions can help clients in
raising client respect simply by delivering the best messages towards the appropriate
leads and shoppers with the appropriate time period and through the best funnel. In
addition, getting a systemic method to inspecting the actual probable impression of
external hazards might help clients avoid probable losses.
37
HP's technological, collaborative tactic starts off using obtaining relevant information,
subsequently deciding the actual replies to help "what occurred and why" as a result of
major analytic methods, methods and investigation. HP subsequently produces insights in
the reason why an end result occurred and makes use of predictive analytics that can help
clients answer "what might happens.
Unique selling point

A unique selling point, which usually specifies your current companys distinctive
position available on the market, is surely a typically overlooked however essential
portion of setting up a enterprise that will customers enjoy.
A unique selling proposition allows you to to be able to endure aside from opponents
along with positively focus your time with making stuffs that focus on your current ideal
number of buyers.
Unique selling point of Dell

1. Dell Incorporation has a USPs (unique selling points) of the products since they
produce education to help buyers utilizing both the equipment and also application.
2. Dells bulk personalization technique was it's unique selling point since it offered
buyers a chance to modify your working computer with their private needs.
3. The key and also unique characteristic or perhaps the unique selling point from the
dell notebook computers is the sturdiness and also trustworthiness from the dell products
Consumers expect dell company to deliver technologies options in which support these
perform and also achieve additional, no matter whether theyre in your house, function,
college or perhaps anywhere in the earth.
Unique selling point of HP

1. HP being a business offers four critical divisions regarding their goods. Image
Arts Answer - from professional electronic engages in order to specialize laser
printers for shade proofing. SOHO answers (small office from home), SME
(small method enterprise) answers - personal computer, printer's, integration,
38
workflow integration. To Large enterprises - at the colleges, ministry department

in addition to overall community answers. Along with that, it will loan for all
expenses, provides their knowledge, in addition to marketing possibilities in order
to equivalent consumers to exchange knowledge.
2. Your company plan introduces your design brand everything is possible in
addition to an picture product -- (customer) + hp = almost everything can be
performed -- in order to talk HPs focus on collaboration.
3. Gary Elliott, vice chief executive, HP Company in addition to Marketing
communications claimed inside the 2002 plan, We decided the simplest way to
turn out to be acknowledged as your worlds top technological know-how
business seemed to be in order to merely explain to that think great is. But
alternatively as compared to focus on cures produce, this specific plan targets on
cures produce probable with respect to each of our consumers, each of our
consumers in addition to each of our associates.
4. A brand's unique promoting proposition seriously isn't necessarily their issues.
It truly is about what that is short for throughout their consumer tactic. With time,
this approach has developed into bit more fragmented. Though the considering is
still the identical.
Point of Differentiation of HP and Dell and POD

Advantages
Hp is a manufacturer and dell is a maker. In the sense that Hp manufactures their parts
itself and then makes laptops and computers and their products but dell does not make
parts itself. It purchases from different suppliers and then integrates to make products.
So its a advantage and disadvantage at the same time, may be possible that HP costs a lot
by manufacturing and may be successful to save the cost and vice versa with the dell
case.
So it depends upon strategies.
39
Positioning and Differentiation

Positioning
Inside the early days dell located itself since quality Personal computer Firm using a
quick in addition to effortless internet-based sales. Progressively that additionally growth
in addition to enhanced advertising were able to establish Dells place in consumers
thoughts in addition to presented the idea for intense, value-oriented laptop or computer
maker. Inside the early days HP located itself since good deal Personal computer Firm
however currently it is paying attention to put itself in high priced setting by means of
adding innovation by means of creating HP Labs in addition to by means of creating
special merchandise in addition to by means of performing correct advertising they are
able to cost quality price tag.
Differentiation
Differentiation is procedure for adding a lot more which means towards the merchandise
by simply mentioning characteristics outside of your key topic. Task connected with
differentiation would be to highlight your applicable advantages in a very unique way
which is not very easily as well as opposition and gives worthwhile advantages towards
the company. The particular submission route plays it's element while differentiation
device along with can be aggressive advantages. For instance Dell pc through direct
marketing technique gives pc method appropriate from doorway phase connected with
home-owners along with workplaces. And hewlett packard supplies special personal
computers along with ink jet printers particularly throughout majority to house carry,
corporations along with federal sectors.
Product life cycle of Dell

Dell has following categories:
Laptops
Tablets
Desktops
Server
Accessories
40
Laptops are in maturity stage.

Tablets are in growth stage.
Desktops are in decline stage.
Servers are in introduction stage.
Different accessories are in different stages.
Product life cycle of HP

Hp has following categories:
Laptops
Tablets
Desktops
Scanners
Printers
Calculators
Services And Apps
Laptops are in maturity stage.

Tablets are in growth stage.
Desktops are in decline stage.
Scanners are in maturity stage.
Printers are in maturity stage.
Calculators are in introduction stage.
Different services and apps are in different stages.
41
Deliverable 2
Associated with laptop or computer firms within the

Marketplace
Dell -- The particular globe's #1 direct-sale personal computer merchant gives a wide
range connected with personal computer as well as activity items for your purchaser as
well as venture market segments.
Sony -- Sony possesses refocused the method of marketing personal computers: Instead
of pleasing generally in order to shoppers, it's today aimed towards organization
customers (mostly tiny as well as medium-sized companies).
HEWLETT PACKARD -- HP's Personalized Techniques Class market segments desktop
computer as well as notebook computer Pcs in order to purchaser, corporations,
authorities businesses, as well as educational institutions..
42
The apple company -- Once the earth's prime PC machine, The apple
company Computer have been relegated to be able to specialized niche position in a
very marketplace took over by simply "Wintel" devices (computers applying Ms
Glass windows software package and also Intel processors).
Gateway--Entrance Probably the purest PC perform one of many leading

personal computer manufacturers, Entrance have been attack especially challenging
by simply halting gross sales for the reason that market.
Annual Revenues
Pakistans every day market computer hardware income (including laptop computers and
accessories) of UNITED STATES DOLLAR 334 mil with 2012 and is also likely to
expand by an average of with regards to 8% every year on the future a few several years.
Hp Recent Predicament.
$86 billion in revenue
net income of almost $2.4 billion
Dell Recent Predicament.
Revenue over $56 billion
Net income of $3.4 billion
Apple Recent Predicament

Net income of almost $1.3 billion
Gateway Recent Predicament
Net income of almost $6 million
43
International LAPTOP OR COMPUTER Current market discuss by

simply items sold.
Firms
Year 2011
HP
Dell
Apple
Gateway
Acer
Lenova
Asus
Toshiba
Samsung
Fujitsu
NEC
Others
17.2%
12.1%
10.7%
1.3%
11.2%
9.3%
5.9%
3.6%
3.3%
1.2%
0.8%
24.4%
Computer Sales
Computer Sales
Volume of computers sold
95.4 Million
throughout US
Volume of computers sold
355.2 Million
throughout Globally
Computer sales revenue
computer system gross sales
$85.5 Billion
earnings.U.S
Worldwide
Computer sales ALL time
Numbers of computers gross
sales all time.
Computers revenue earnings
2011
2011
$329 billion
3.287 Billion
$4.835 Trillion
All time.
44
Region of sales(Geographical)
% regarding personal computers offered to US
% regarding personal computers offered to
38.8%
25%
Europe
% regarding personal computers offered to
11.7%
Asia
45
Strength of Industry
Geographical Pie Chart
46
Sales
USA
Europe
Asia
47
IN America people are educated. Most of the businesses are working on computer
technology and the environment is innovative. There are a lot of opportunities for
companies to make new informative and innovative products. Most of the multinational
computer industries belong to USA. The computer industry has flourished in this country,
because it has not been vigorously regulated by foolish government guidelines, until now.
So due to these reasons IT Industry has greatest market share in America.
In Europe, although people are educated and environment is innovative but it has less
multinational computer industries, due to this reason it has fewer shares than USA.
In Asia as environment is not so innovative that multinational companies could explore
IT industries. Mostly businesses are manual, so due to this reason it has fewer market
share rather than others.
Industry attractiveness of dell and Hp

Introduction
Economic Characteristics
Six Forces
Dominative Position of Major Competitors
Competitive Analysis of Personal Computer Manufactures
PC Industry Trends
48
Key Success Factors
Industry Prospect and Overall Attractiveness
Conclusion
Characteristics Dominate Economic
1. Market Size
2. Scope of Competitive Rivalry
3. Stage in Life Cycle
4. Number of Companies within the Industry
5. Customers
6. Technology/Innovation
7. Product Characteristics
8. Scale Economies
9. Learning and Experience Effects
10. Capital Requirements
11. Industry Profitability
Market Size
Computer industry consists of hardware, software, service and an endless array of
products our group chose to narrow the research to PCs. The worldwide PC market
finished 2004 on a strong note, with double-digit percentage growth for the year,
according to research released by IDC and Gartner.
49
U.S. and Worldwide PC Shipments and Growth, 2004-2008
Region
2004
2005
2006
2007
21.8
23.6
25.6
29.0
2008
USA (M units)
Consumer
32.6
Commercial
36.5
40.3
41.9
46.0
49.4
Total
58.3
63.9
67.5
75.0
82.0
Worldwide (M units)
Consumer
64.9
78.4
88.4
100.0
114.4
129.4
141.9
157.1
179.2
207.9
230.2
257.1
111.2
Commercial
173.3
Total
284.5
Scope of competitor rivalry
The competition within the PC industry is extraordinarily cutthroat. The top

companies consist of Dell, HP, Apple, Gateway and Sony.
A few factors of competitive edge:
50
New technology
Custom built PCs
Reliability
Customer Service
Stage in Life Cycle

The stage of the PC industry life cycle can be described as mature. However, the
growth of PC sales has not decreased due to the globalization trend taking place
within the multinational corporations.
Customers
Involving interests of the PC community can be described as diverse. Advantages
consist across the board for the PC user. Ranging from music manipulation, video
enhancement, money management, research, school, science and a myriad of
others; there are many uses for the PC. Therefore this means the customers that
buy the computers are diverse and use their machines in a variety of ways. The
computer offers an efficient way of running a business, playing a game or
managing your calendar. The bottom line is that any person can find a useful
attribute for a computer: which provides the industry with revenue higher than the
auto and chemical industries combined.
Technology/Innovation
Technologies as well as innovation are advancing every year, therefore making
the industry fiercer.
Ten years from now chances are there will be few computers in home. Instead,
people will be wearing computers -- implanted, for example, in eyeglasses, with
the retina as the screen -- according to IT pioneer and futurist Raymond Kurzweil.
51
Product characteristics
Components:
Case - The box all the parts (except monitor, keyboard, mouse, and printer) are
stored in
Mother Board - The main printed circuit board in the computer, which the CPU
(see below) plugs into
CPU (Central Processing Unit) The CPU is the actual "brains" of the computer
RAM (Random Access Memory) - Like pieces of scratch paper that information is
temporarily stored on ONLY WHILE you are actually working on the computer.
Disk Controller The Disk Controller allows your computer to interact with your
disk drive storage devices
Hard Disk Drive - A STORAGE device, NOT MEMORY! The Hard Disk Drive
is like a filing cabinet - no more, no less. Retrieval is faster, and finding things is
usually easier, but it is still just a filing cabinet.
Video Display Adapter - Unlike your eyes, it can ONLY OUTPUT the computer
information in the form of a video signal that is human readable (via the monitor).
Monitor - The actual display you see the words, pictures, and data on. There
are two main types: analog and digital.
Input Device - Keyboard, Mouse, Digitizer, Scanner, Pen, Digital Camera, etc.
Modem - A device that hooks your computer up to the telephone line
Scales Economies
52
With most multinational corporations there are two separate economies operating
between the actual company and the markets. The separate economies are internal and
external.
Internal: Tech Economy, Managerial Economy, Financial Economy, Marketing

Economy, Research & Development
External: The external aspects of scale economies consist of the distribution centers
and retailers. For example; Apple, Sony or HP manufacture computers, while retailers
arrange for computer deliveries to the customer. One exception is Dell, which has
excelled in custom-built computers delivered straight to a consumers home.
Learning & Experience effect

The computer industry is mature and here to stay. In the US computers are found in most
homes with access to the Internet. Students are taught to use computers in school at a
young age and competency is only going to increase.
However, there are people who struggle with applications and user activities such as
installing new drivers or connecting a monitor. One of the largest complaints within the
industry is support. Dell, once again is an exception. Dell observes great rewards when
consumers give praise in regards to customer service. Since the industry is so mature the
complaints are few due to the reliability of the PC.
Capital requirements
The capital required to enter and actually compete with the big names in the computer
industry are ridiculous. Taking into account that HP spent 3.9 billion on research and
development last year alone makes a person think twice about embarking in the industry.
New components and ideas are always being developed by the large companies, which
few can compete. Furthermore, the brand name products distributed by Apple, Dell and
HP are household names.
53
However, if a person is technologically savvy and creates new language or some sort of
new innovation they could sell the idea to the large companies. This would be the most
probable situation when attempting to create a profit within the PC business.
Industry profitability
The fact remains that the PC industry doesnt produce only PCs. Every company that
creates PCs also has its hand in other industries and markets. An important question to
ask is how profitable is the industry. And the answer is billions upon billions upon
billions of dollars. The industry is constantly redefining itself as well as every other
business on the world due to its deep routes within every industry. As for what company
ranks the highest in profit at the moment is Apple, but the numbers are skewed due to
other hardware Apple provides. The industry is extremely competitive and profitable.
6 forces
Suppliers
Buyers
Rivalry among Existing Firms
Threat of New Entrants
Substitute Products
Stakeholders
Complimentary Product
Suppliers / Buyers
Intel and Microsoft are the two most dominate suppliers in the PC industry.
Suppliers: Intels microprocessor chips are used in approximately 80% of personal
computers.
Microsoft operating systems are used in 90% of computers, giving it substantial
bargaining power.
54
Given that Microsoft and Intel control the majority of the PC supplier market of major
component parts, the business world has named the two Wintel.
Buyers: The strength of the PC buyer has basically evolved from the personal computer
becoming a commodity-like item.
Backward integration is also a factor in the strengthening of the PC buyers bargaining
Power because more and more people are building their own computer systems
Rivalry Among Existing Firms

The competition the personal computer industry is also an industry that resembles follow
the leader. Follow the leader occurs when industry leaders are mimicked by competitors;
and those competitors that do not follow will fall off by the wayside.
Price Wars: Ex. In 1999 the average PC cost $ 1,699. Now the average price of a PC is
under a thousand dollar.
Dell Inc
Founded in 1984
Mission Statement: To be the most successful computer company in the world at

delivering the best customer experience in markets we serve.
Next day delivery
No middlemen or intermediate retailers
Hewlett-Packard:
Founded in 1939
55
HPs mission: To invent technologies and services that drive business value,
create social benefit and improve the lives of customerswith a focus on
affecting the greatest number of people possible.
First product was an audio oscillator
Multi component system model
Apple Computer
Apple:
Founded in 1976
Mission statement of Apple is as follows: Apple will be a leader in providing

simple, powerful, high-quality information products and services for people who
learn, communicate, and create.
Stylish product innovation
Entrepreneurial
Gateway Inc.
Gateway:
Founded in 1985
Mission statement of Gateway Inc. is, To invest in our communities and future
by providing state-of-the-art technology and technical support.
3rd largest personal computer company in the United States
Ranked in the top ten worldwide

56
Profit pyramid model
PC Industry Trends
Increasing Clock Speed
Mass Customization
Outsourcing
Electronic Commerce
Current Trends and Issues
Demand Dynamics
Changing Profit Dynamics
Market and Distribution Trends
New Product and Technology Directions
New Business Strategies
Key Success Factors
PC Industry Services
Technology Services
Consulting and Integration
Managed Services
Industry Prospect and Overall Attractiveness
Factors that make the Industry Attractive

Factors that make the Industry Unattractive
Special Industry Problems and Issues
Profit Outlook
Conclusion
Dell Leads
Global Market
57
Diversify the Workforce
New Innovations
PC Improves Society
Chapter 3
Industry life cycle of dell and HP
Computer
intro
Manufacturing
growth
Rare growth of
maturity
Maturity is very
Decline
Computer lies i
industries
Maintenance
computer due to
low level because
decline. Becaus
Hardware (chip,
demand. Because
of rare use of
every person us
accessories etc)
demand of
computer.
the laptop. That
computer is low.
Laptop industries
Tabs industry
Maturity is also in
decline
Not going to
Manufacturing the
Growth rate is high
laptop in different
because of demand. high level because
decline because
high use of laptop
everything is go
style
Printer industries
why market is i
Manufacturing
Growth rate is high
Maturity is low
in market favor
Not going to
New technology
because the use of
because cost of
decline because
Market awareness
printers is good
printers is high.
is a new
Great features
enough.
Growth rate is in
Maturity is low
technology.
Starting the ma
Easy to use
accelerator because
because use of
with great share
Help us in every
great technology
tabs is in peak.
place
produced by it
Great technology
companies.
58
Notepad industry
Great features
Growth rate is in
Maturity is low
Starting the ma
Easy to use
accelerator because
because use of
with great share
Help us in every
great technology
tabs is in peak.
Thats why dec
place
produced by it
phase is not in
Great technology
companies.
position.
PESTEL Analysis HP
Political:
The governmental research of HP associated with govt manages and guidelines in
the attempt of HP to keep up with the Ecological and CSR (Corporate Public
Responsibility) Requirements and with regards to decency, quality and environmental
issues.
Economical:
HP mainly depends on revenue from its printing components, financial investment
strategies, investment strategies in method and small businesses and internet solutions for
its maintenance.
59
Social:
HP has the regional US customer platform well taken but it seems that there is
very little to be done here with regards to gaining the future younger creation of IT zealot
and unless there is a pressure upon upgrading the designs of its components for
publishing and PCs to capture up with the buzz designed by HP and Apple who reveal
new designs almost every other month
Technological:
HP went cyber almost a several years ago, which is pretty latest in evaluation to
its 70 all year industry existence (HP, 2009). Actually the level of HPs fortune came in
1998 when HPs business application and assistance department and business techniques
department was combined and Ann Livermore took over to run this new Business
Processing Alternatives Company (ECSO), with an financial commitment of $15 billion
dollars and an worker platform of 44,000 workers (Moore and Snyder, 2000).
Environmental:
HPs functions are subject to rules under government, state, local and foreign laws
and rules concerning the environment, such as laws and rules dealing with the release of
contaminants into the air and water, the management and convenience of dangerous
ingredients and waste materials, and the clean-up of infected sites.
Legal:
Certain Change Regulation As one of the biggest patent owners in U.S, HP is on
regular provided four patents every day. HP is a continuous focus on of trivial patent legal
cases. These legal cases power HP to redirect sources away from advancement and
service, resulting in reduced economic benefits from innovation.
60
PESTLE ANALYSIS Dell

The trends of the computer sector can be analysis by using PESTLE analysis which
includes governmental, economic, sociological, technical, legal, and environmental. I use
the pestle research to figure out the DELL macro atmosphere research.
Political
One of DELLs major intimidations is relating to it all factor of the exterior atmosphere,
the governmental or legal atmosphere. The China govt prefers to advertise national PC
providers as evaluate to foreign companies and there are a lot of requirements involved in
obtaining govt agreements, which shows that local companies and companies in China is
more preferable by the China government. Another threat of Dell is that the internet
usage is being controlled by the China government which means the growth of internet is
being limited.
Economic
The financial system is the characteristics and financial system route in which a company
plays or may contend. The problem of software piracy is the main risk that computer
companies suffer in China. China has a lot of economic opportunities as it has the highest
population amount, but the shortage of skilled labor is making China to suffer. DELL is
aware that cheaper system is more preferable in China.
Sociological
The public and public industry is adhere to carefully with a societys behavior and public
principles. Dell has the possibilities to flourish into a new market as the prospective of
internet growth in China is tremendous. At the same time, due to the huge expense of
computer, China people are still unsure about card sales. Therefore, DELL has to offer
door-to-door or face-to-face functions to be able to improve consumers believe in and
consumers perception in the organization and item.
61
Technological
The technological sector consists of the agencies and activities which related with
inventing new technology into products, materials and processes. The main direction of
technology nowadays is everything become smaller and faster. Institution has proven a
key govt source by offering access to technological innovation designed. By the year
2000, it was observed that the annual PC production in mainland China would reach 7.6
million, making it the third largest in the world. With the help of internet, companies have
a great opportunity to get their name into the public area plus a fast way to custom
services to its customer segments. However, the high cost of using internet in China has
become a threat to Dell in the technology sector.
Legal
Dell was fined $4 million for fake and misleading advertising about PCs sold to
consumers in New York. While in New Orleans, there are two companies which claim
Dell is selling a surveillance camera system by conspiring with city officials. This shows
that Dell is being interrupted by the legality of their actions in different countries.
Environmental
The target of Dell is to build a corporation culture for better awareness towards the
environment because of the values of environmental conservation, the efficiency of
eliminating waste which follows the values of the direct business model and is more
effective to deliver the value of customers.
Dell's goal is to be a careful attendant of the environment and to execute programs and
processes to ensure the operations and products are environmentally friendly. Other than
that, Dell is also trying to make the neighboring environment in society better for the
people who work and to generate strategic partnerships with organizations evenly
dedicated to environmental objectives.
62
Dell's direct business model guides their promise to straight meeting with employees,
customers and suppliers. Dell also engage in direct conversation with the investment
groups which are socially responsible, shareholder activists, and many variety of
nongovernmental groups that are looking for business meeting to uncover the global way
out for most of the public and environmental concerns.
Porters Five Forces Analysis

Threat of Entry:
Risks of access in this case are average. There is low product commitment of
current companies. Customers usually evaluate the costs with different manufacturers
when they purchase PCs. They think that every PC has the same price and has the same
operate regardless of what product it is, which means low product difference. There are
method financial commitment specifications, no govt rules and low financial systems of
range in production. There is low financial commitment for separate shops. Reducing
productivity indicates that there is a risk of new newcomers.
Threat of Substitutes:
Risk of alternative items is low. HP considers in standards-based technology,
which symbolizes to be able to decide in the product of much choice. HP tries to remove
limitations by ongoing upgrading procedures and introducing new items to stay in the top
of the industry.
63
The Power of Buyers:

Negotiating energy of clients is great. People are very cost delicate because they
like to buy inexpensive and top quality items. If they see a components or application or
PC with identical features but different manufacturers and cost, they will usually buy a
less expensive one. The customer energy for HP can be low since product requirement is
great, this means that the company has energy to control the amount of manufacturing
and also its items cost. On the other hand, clients have plenty of alternatives. Moreover
there is not a significant distinction between items which are created in the market.
64
The Power of Suppliers:

HP negotiating energy of providers is great. There are large amount of providers for every
element areas of the PC, for example, one can make a PC by using element areas from
different providers, including hard disk drive, DVD drive, observe, etc. Microsoft and
Apple have tremendous negotiating energy against the PC producers. There are great
changing costs.
Competitive Rivalry:
Competition is high. For example, cost, when one company functions to secure its place
by decreasing the cost of PCs, it will impact other organizations. This implies all other
organizations may want to reduced their cost in order to entice the clients. There is also
reducing productivity. Since the organizations offer their PCs in a low cost, they will
make less benefit.
Dell Porter five forces

PORTER FIVE FORCES ANALYSIS
Dell is very popular for custom-built PC and other computer relevant items and
promoting them online. Dell is very effective with regards to working with its providers
and maintaining the stock near to zero level which allows the company to evolve JIT
technique which decreases the costs to the ultimate customer.
The bargaining power of suppliers

According to typical supposition, energy is high where the product is highly effective.
Therefore, Dell is believed to have far greater negotiating energy than the providers. Dell
has been efficiently handling its opponents with regards to getting the required provide of
stocks and get them generate the stocks according to the requirements of the company.
65
And the CEO of the organization, Eileen Dell also described that Dell Company never
stays to one provider permanently, as they always modify the providers if the providers
are not conference the requirements of Dell. And the organization always goes to the
provider which is impressive and price aggressive among other competing providers.
Therefore, it again indicates that Dell has greater negotiating energy than its providers.
Another sign of Dell to be in better place than its providers is that Dell got most of its
providers identify their companies and production models near to Dells production and
set up models. By getting the providers near its production models, stock is down to an
amazing four times and efficiency is the key component.
Moreover, providers can consistently provide their stocks to Dell within time of building
the computer systems which indicates a powerful business knowing of both Dell and its
providers.
66
Threat of new Entrants

As it has been mentioned by Eileen Dell, his only worry about his company kingdom is
the chance of new newcomers to the industry who could negatively impact his company.
And moreover, Dells new technique is the item diversification; therefore, almost all
digital organizations are prospective newcomers to this new industry.
Bargaining power of Customers

One of the aggressive benefits Dell has obtained has been through providing in-person
connections with business and institutional clients. This is done by phone, internet
buying, personalized pcs where business clients can go to Dells special website known
as Leading Dell.com and set up pcs in respect to the price and requirements.
Moreover, they have publish sales on the internet facilitates which are on the internet and
in some situations the company technicians can even check out the client websites.
As long as the organization has been providing large organizations such as government
authorities, and huge organizations such as Cox emails, EDS and etc, they are generally
long lasting clients as it costs large money for the clients to change from Dell to another
organization.
Moreover, as the organization has been expanding its product varies from simply
computer systems to other products such photo printers, storage space services; this
indicates that the organization will be providing all type of customers, not only business
customers. Therefore, Dell has to pay attention to enhancing its client support to small
company and individual customers as well to gain their life-time commitment.
67
Availability of substitutes:
In the computer market this is a very extremely present. A lot of items such as a laptop
computer, an eye or cell cellular phones provide the same services and are therefore
exchangeable. Only if items are very particular such as for example the illustrating
program; Photoshop a alternative would be hard to alternative. Things that will help tie
clients to the product or item, would be good item difference, reduced costs, react o
technological innovation changes and being impressive.
COMPETITIVE RIVALRY
Competitors among opponents is extremely affected by the above described four causes.
Dell is coming into into a international industry and given the durability of these causes
in international situation, competition for dell is very high.
Logistics of HP
Supply Chain
Our supply chain SER governance system defines responsibility and reporting across
relevant HP businesses and functions. All HP businesses support our supply chain SER
program through the Supply Chain Board, which meets monthly and reports directly to
the HP Executive Council.
68
Supply chain governance structure
It is crucial that HPs purchasing groups understand SER problems and consider them in
day-to-day seeking and provider control choices. These groups get frequent training in
how to evaluate the SER risk associated with a prospective provider. Provide sequence
SER is involved in the Supplier Assessment, Agreement Growth and Performance
Management stages of HPs Procurement Management Procedure, which describes how
our purchasing companies globally handle manufacturing providers. Conformity with our
Procurement Management Procedure is audited internal and by exterior companies that
approve HPs quality system (ISO 9000).
HP uses a High-Performance Provider Scorecard (HPSS) to assess and enhance
manufacturing suppliers efficiency. The scorecard has several efficiency groups
calculated according to significance, such as business (including SER), cost, quality,
provide and technological innovation. The scorecard ranking system allows us to position
a suppliers control potential as well as its SER efficiency against HPs Digital Market
Rule of Perform (EICC). SER problems consideration for 10 % of suppliers HPSS
ranking. HP opinions scorecards consistently to recognize problems and styles to deal
69
with. Providers can also amount HP through our opposite scorecard, which concentrates
on our purchase and supplier control processes.
Value chain
We can see, the value sequence involves the whole company and looks at how main and
assistance actions can perform together successfully and successfully to help obtain the
company a excellent aggressive benefits.
Follow the Porters value sequence design we analyze the main and helpful actions
independently for HPs roles as below.
Primary Activities
Inbound Logistics
HP Design for Logistics program improves transport efficiency to reduce energy use and
cost, by shifting product transport to more efficient methods, optimizing their distribution
network, influencing transport providers to improve the environmental performance. HP
Financial Services established relationships with some of the worlds largest and most
reputable shipping companies, allowing HP to offer very economical pricing.
Operation
HP has been cutting its operating costs since 2005 by removing several layers of
management, phasing global operations into all of HP's business segments, and
outsourcing more production to subcontractors. By mid-2008, more than half of HP's PCs
are built entirely by subcontractors. These measures considerably improved HP's
profitability as its operating margin rose from 4.0% in 2005 to 8.4% in 2007 and to nearly
10% for the first half of 2008. HP plans on continuing to look for areas where operating
efficiency and profitability can be improved, such as the development and installation of
its own new IT databases or the improvement of their supply chain.
70
(www.wikinvest.com)
Outbound Logistics
The 3PL model dramatically reduces HP's fixed costs. Globally, HP works with upwards
of 40 3PLs and there are about 9-12 "core" partners. To be pre-qualify 3PL for HP, it
would be a formal certification process and also a very long questionnaire used by HP
that emphasizes the 3PL's technology capabilities.
Marketing and Sales

Although HP's main competitors are Dell and IBM, each of these companies has a
different focus area. Dell makes most of its money on PC and server hardware, while
IBM has shifted towards an IT services provider. HP provides both of those offerings but
maintains a large cash cow business with its printers, which generate half of all operating
profits.
Service
An integral part of HP's infrastructure is the software and services. In 2006, HP acquired
Mercury Interactive Corporation, a leader in information technology services and
software. Through the Mercury acquisition, HP has become the dominant player in the IT
services and software market, where it will be competing directly with general IT
companies such as IBM and IT consulting and services firms like Accenture.
Support Activities
Procurement
HP uses the most advanced technology to optimize the relationship with the supply base,
including electronic auctions, e-quoting, e-invoicing and e-payments. Suppliers that have
a demonstrated capability of supporting this type of activity will receive primary
consideration. In consolidating the meetings spend globally, procurement at HP has
selected its preferred suppliers and standardized terms and conditions of contracts it
negotiates with them. Procurement also built a central process for employees to use when
71
planning meetings and installed technology tools. It also introduced a credit card for its
meeting planners to use to pay meeting-related expenses.
Technological Development
HP created a unique service which called Adaptive Network Architecture (ANA) to
deliver the ability of managing an adaptive enterprise to its major customers (HP Services
Features, 2008). Beside, HP attaches great importance to R&D. In the 2008 fiscal year,
the company has invested $3.5 billion in its research programs, including HP Labs and
plan to continue to invest in R&D.
Human Resources Management

With 172,000 employees, HP recognizes that the large size of their operations comes with
large responsibilities. The ways in which they manage their facilities and conduct their
business activities can have significant and far-reaching impacts on the environment as
well as the welfare and safety of the employees. HP is working to minimize those impacts
and have made operations a cornerstone of their commitment to environmental
responsibility.
Firm Infrastructure
HP has six business segments which are Personal System, Imaging and Printing,
Enterprise Storage and Servers, HP Services, Software and HP Financial Services. Since
2005, HP has undergone significant cost cutting measures by highly decentralized, in
which the process of reducing the number of their facilities to reduce cost.
BCG Matrix of Hp:
According to the following matrix we came to know that hp printers are the cash
cows for hp. less market growth they have maximum market share. And also
earning maximum return from them.

Super computers come under the stars. They are investing in it for high market
growth to get high market share.
72
Laptops and softwares come under the Question marks. These two things even
have high market growth but they have less market share due to competition in
the industry.
Dogs are the computers because they invest low in this product due to technology
and also have less market share in the industry.
????
73
Chapter 4
HP MANAGEMENT STYLE
The two proprietors bill Hewlett along with Dave Packard formulated some sort of
managing style which acquired in no way occurred within a huge company before. Your
Administration style is referred to as "The HP Approach. "
The 5 principles of the HP WAY are:
We have trust as well as admiration for individuals

We all concentrate on a top a higher level success along with side of the bargain..
All of us execute the small business with uncompromising honesty..
We gain our common targets by means of teamwork..
We all motivate freedom and also development innovation.
An additional massive perhaps the HEWLETT PACKARD TECHNIQUE will be the

managing model often known as manage by taking walks around. Hewlett as well as
Packard encouraged their vip's to leave the vip's collection as well as spend time with all
the collection individuals. Many people thought in which immediate verbal exchanges
with all the collection individuals would certainly help these people realize their
relevance towards the company. Cause them to become sense. managing by travelling
had been ways to acquire every person about the same web site. This kind of model
differed from conventional top- lower organized managing strategies.
74
HP seeing that organization always turned down firing its employees. Rather, the
business made available its employees virtually excellent job stability.
HP individuals acquired benefits that will integrated medical care insurance to repay
illnesses.I thought this was unusual in the flooring buisingess globe
A great deal of former HP employs need to do removed onto perform good issues
throughout other individuals, electronic. grams. Charlie Wozniak, that worked well at HP
afterwards co-founded Apple mackintosh. Several companies from Silicon Vly include
Imitated the HP means
HP Executive Team
Meg Whitman is usually CEO and also President

Raymond T. Lanethe Professional Chairman from the Mother board in Hewlett-
Packard (HP
Todd Bradley-Executive Vice President, Producing and also Individual Methods
Team
George Kadifa-Executive Vice President, H . P . Software
Dave Donatelli-Executive Vice President and also Normal Administrator, Venture
Team
Bill Veghte-Executive Vice President and also Key Working Police officerIn HPS
Background there is 8 changes inside CEOS in the company Because Bill Ur.
Hewlett along with Jesse Packard corp. started the organization. Through the
years the particular operations style of HP possesses certainly modified. It started
out as a operations type that has been about honesty, admiration for folks,
teamwork, development, along with factor to help shoppers as well as the area.
Bill Hewlett along with Dave Packard's well known operations type The HP
Method.
75
Abraham Maslows Concept associated with Human Wants is the concept of which
greatest matches the particular operations type at H . P .. Abraham Maslow presumed
supervisors that assist people satisfy his or her significant requirements at your workplace
will accomplish efficiency. Boss must concentrate on enjoyable personnel requirements
because it will really encourage these to do well. On H . P . Workers are generally cared
for such as individuals along with family With executives consult the particular brand
personnel it will help the particular personnel fill up its Respect Have to have along with
Sociable Wants.
BCG MATRIX OF DELL
76
MANAGEMENT STYLE
Dells extended success uses group interaction and also the chance each worker has to
understand along with glow. The successful lifestyle necessitates that individuals buy
individuals, value learning along with continue to be constantly asking. I am dedicated to
to be a meritocracy and developing, having onto along with getting the most effective
individuals, indicative of our own industry.
77
Dell offers globally organic skills handling offers to generate individuals who can apply
the organization technique along with meet customer needs. Within the last few a few for
you to several years, the techniques along with techniques launched us to the Package 50
just as one industry head.
Nonetheless, most of us deal with an essential inflection place. With more than half
linked with Dells employees currently outside of the You. Ersus., an essential part of the
key development places will be in showing nations. The present offers along with
techniques must serve because springboards even as replenish along with revitalize the
organic skills along with control growth offers to meet up with vital development along
with growth objectives.
Dell regularly spends within techniques along with techniques to put the appropriate
organic skills within appropriate projects. Last season, Dells Expert Control Workers
along with Table linked with Company administrators implemented every quarter organic
skills recommendations within situation of our own organization technique. During these
recommendations, the Expert Control Workers may perhaps:
develop organic skills imperatives
identify mission-critical careers
forecast organic skills requires
assess along with modify organic talent
identify growth actions to get the best organic talent
report advancement
create series plans
Dells overall efficiency handling technique back-links particular person desires using
business overall efficiency. The machine helps figure out your next technology linked
with Dell industry management along with raise the overall efficiency of most Dell
employees.
The overall efficiency handling exercise calls for 12-monthly formal recommendations,
the calibration linked with organic skills along with allowance linked with overall
efficiency rewards along with strategies just about all decisions according to to be a
meritocracy. Throughout the season, providers generate employees using continuous
recommendations, educating, educating along with on-the-job growth. Workers along
with providers mutually build the employee-development programs.
78
This specific entire exercise adjusts individual-performance objectives along with careerdevelopment setting up using organization along with organization desires along with
benefits. This procedure develops up after a while, changing for you to central along with
external developments.
Dell employees talk with providers to generate well-rounded growth programs to get
ready these individuals designed for future projects. A perfect program blends educating
using on-the-job activities along with job activities along with guidance via co-workers
and the like.
Staffing
Staffing is the term for the process regarding enrolling, selecting, orientating, holding
onto and also shooting personnel. Staffing can be a recruiting phrase, and also interior
staffing will be done inside a organization by a member of the actual recruiting staff.
Firms can outsource several or maybe all their staffing requirements. Many times,
employers choose staffing agencies for you to complete empty places on a temporary
basis.
A new staffing organization deals with the background inspections and also testing
regarding personnel, and then swallows a fee on the income acquired by personnel that
they send out for you to outside the house firms. From time to time the actual staffing
organization obtains the "finder's fee" through the organization which uses staff full-time.
http://www.ehow.com/about_5063304_word-staffing-mean.html
So staffing involves two major heads that are recruiting and selection.
79
Dell Recruitment Process
80
http://www.slideshare.net/453349/dell-final-power-point
Recommendations
Dell Inc. operates about endorsement to the using the services of and also offering of
brand-new staff members. A recognized assortment course of action together with
considerations so that you can fully and also rather examine its people constructed Dell
Inc. resume. As a result, your endorsement can be inside line towards the integration in
the present way of life plus the feasible steps relevant towards the organization.
81
Selection Interview
The majority of the staff received been subject to the choice appointment course of
action. HR Managers alternatively feel within the consistency in addition to validity of
interview.
Throughout Dell Inc., the choice appointment is perhaps the key application making the
selecting determination. HR managers include purposes to see. Subsequently, solicit
remarks via past recruiters in addition to character sources. Many operators request
viewpoints of fellow workers which meet the job hopefuls. People might even have a
chance to utilize a work small sample examination, which often actions the flexibility of
job hopefuls to do a selected responsibility. In the end, nonetheless, HR managers make
use of the particular thoughts they've already about the job hopefuls though they may be
seated before these people.
HP Recruitment Process
Recruitment in HP Sophisticated Options Inc., is normally some sort of four-stage
procedure aimed at figuring out, evaluating, interviewing and also getting the top man or
woman for each and every task.
1. APPLICATION
Sign up for each situation regarding awareness for your requirements that aligns with all
your informative background, competencies as well as experience simply by researching
this listings internet site.
2. EVALUATION
Once your application is submitted, it will be reviewed against the requirements of the
position.
3. ASSESSMENT
The particular assessment course of action can sometimes include composed exercises
along with job interviews with the entire potential employer, Man Reference Solutions,
and/or various other solar panel associates as ideal. The main objective would be to
82
evaluate ones competencies along with fit with the needs associated with HP State-of-theart Options and also provides as a way for one to obtain a much better knowledge of the
project along with our organization.
4. SELECTION
Once a position has been filled, all candidates interviewed who were not selected will be
notified. It is the goal of HP Advanced Solutions to hire the most qualified individual for
each opportunity.
http://www.hpadvancedsolutions.com/careers/recruitment-process.html
Operation performed by HRM and HRD in HP and Dell

Human resource management (HRM) encompasses many functions.
Primary Functions of HRM

Equal employment option
Staffing (recruitment along with selection)
Compensation along with advantages
Member of staff along with labor associations
Well being, safety, along with security
People learning resource progress.
Second HRM Features
Firm along with work pattern
83
Effectiveness management/ functionality assessment devices

Study along with information devices.
HRD Functions
Training and development (T&D)
Organizational development
Career development
1. Training and Development (T&D):

Instruction improving the knowledge, knowledge and also thought patterns of workers
for the short-term, distinct to some unique employment or maybe activity e. h.,
Employee orientation
Skills & techie education
Training
Counseling
Development be prepared for long term tasks, while growing the capability to
complete at the recent employment
Management education
Supervisor development
2. Organizational Development:
The task of bettering the organizations effectiveness along with members well-being by
way of use of behavior science ideas
Targets equally macro- along with micro-levels
84
HRD takes on the part of a alter real estate agent.
3. Career Development:
Ongoing process by which individuals progress through series of changes until

they achieve their personal level of maximum achievement.
Career planning
Career management
Learning & Performance
Designation Hierarchy of Dell:
LMVS
oiGEP
wdvuBc
e-rash
rLmoea
-eas
LvtSDl
eRrvD
vlcoe
eisml
ln
v
a
o
V P
d
o
ec u
i t
n
ns
nl
e
e
e e
e p
t
e
st
http://www.slideshare.net/deepankarn/presentation1-final-15068509
85
Designation Hierarchy of HP:

http://www.theofficialboard.com/org-chart/hewlett-packard
86
NI
CPETSH
tFE
horneuPO
re
ogcfstpnO
am
pSv,Ee
cihtaw
nm
oletsrCM
nuw
yEtu
enroam
lierRkvgnat
roeCtylh
cm
aeigsFhrdpW
M
atnyBoEusrCih
o
ritguxnSp&
srpcnyet
ko&
enictsAm
nerisLa
tO
an
pesoG
i&
rl
nesam
oylj Chairma
rsnG
gM
acCrut n of the
k
rtehopi&
kiuc Director
eopsA
tnfc
ic Director
no
gu
n
t
87
Training Plans of HP
In this time of economic volatility, the strength of HPs business speaks volumes about
the talent, expertise and experience of our global workforce of over 300,000. We have a
longstanding commitment to recruit and hire exceptional people and to provide them with
opportunities to build their capabilities and excel in their roles. Organizational leaders are
accountable for developing employees, and high performers have the potential for
unlimited career growth at HP.
Our approach
We apply an integrated employee development framework based on external and internal
benchmarking. The framework uses an array of third-party, manager- and self-assessment
tools to help employees plot the next move in their career pathpossibly across
functions, geographies or working with a different customer segmentand to develop
insights to potential career trajectories. Our developmental programs roughly break down
into a 70/20/10 ratio. Seventy percent of our programsour top priorityare on-the-job
learning opportunities, such as job rotations, cross- functional team experiences and
special projects. We believe learning by doing is the most effective way to build skills
and accelerate development, and we encourage employees to build and hone their
capabilities through hands-on experience.
Our developmental programs roughly break down into a 70/20/10 ratio. Seventy percent
of our programsour top priorityare on-the-job learning opportunities, such as job
rotations, cross- functional team experiences and special projects. We believe learning by
doing is the most effective way to build skills and accelerate development, and we
encourage employees to build and hone their capabilities through hands-on experience.
About 20 percent of our programs focus on relationship-based learning through coaching,
mentoring and learning communities. These programs are highly dependent on team
leaders, who are given the training and tools to develop their teams effectively, and who
are measured on the growth of their people.
88
The remaining 10 percent of our developmental programs are delivered through formal
learning, such as face-to-face training programs, live virtual training and interactive, selfdirected web resources.
Our formal learning programs take advantage of technology to bring training to the
desktop. Eighty- three percent of our training courses are delivered by videoconference or
online. We use face-to-face training sessions to teach and assess complex skills, and when
there is a geographical concentration of participants. But we have found that technologybased training yields significant benefits: it can reach more employees, increase access to
learning opportunities and save millions of dollars annually in travel expenses while
decreasing associated greenhouse gas emissions
In addition, technology-based learning better accommodates the needs of a workforce
with differing development needs, enables each employee access at the right time and
right place, and enhances learning and retention.
To complement HP-based training, we also support employees in pursuing external
educational opportunities such as conferences, seminars and technical certifications, as
well as training at accredited institutions.
We want our employees to reach their full potential, and we're committed to providing
training and development opportunities to help them advance in their careers and deliver
on HP's business objectives.
Our global training program aligns individual learning with business group and function
needs in support of HP's overall business strategy. Each employee creates a development
plan with their manager as part of their annual performance review. We are committed to
helping employees find new opportunities to grow within HP, and we aim to fill
vacancies with internal candidates before we advertise the position externally.
89
Our Growth Resource Center enables employees to enroll in a variety of classroom and elearning solutions. Offerings range from project management and professional business
skills to technical and sales training.
We continue to explore ways to deliver more effective training at lower costs than
classroom-based training. Our strategy is to emphasize on-the-job training and e-learning
that uses the latest technology. For example, we offer courses via Training Studio, where
instructors can deliver technical training via video link to multiple sites. This approach
reduces travel time and associated environmental impacts while enabling more people to
access training.
Our Career Development Frameworks provide employees with a summary of key roles
within HP to help them map their career. The frameworks are organized around a
common set of skills, knowledge and experience and are listed by career function. They
help employees most benefit from career development discussions with their managers
and provide information on how to set effective personal objectives. The framework
includes:
Core learning that clarifies the values we expect from our leaders and how they
contribute to company strategy
Personal learning that focuses on individual effectiveness and leadership
Group learning that equips managers with the skills needed to get the best from
their team
We also support employees in pursuing external educational opportunities such as

conferences, seminars and technical certifications, as well as training at accredited
institutions.
Our mandatory Standards of Excellence training helps employees implement company
policies, meet high standards of conduct, and ensure their behavior reflects company
values and policies. Topics include data privacy; environment, health and safety;
information security; and Standards of Business Conduct (SBC).
90
In 2012, the completion rate for the training course Our New SBCBuilding Trust
Together exceeded 97 percent. The average time spent per enrolled learner in these webbased training solutions was about two hours.
Training plans of Dell

At Dell, our team members never stop learning and growing. We encourage professional
and personal development so much that we've created an entire working culture around it.
Team members at Dell can expect a vast array of programs to increase skills in their
current role and develop leadership skills that can make a significant impact on their
career.
Your development at Dell

We aspire to cultivate the confidence, drive and abilities in all of our team members,
which empower them to fulfill their potential. Career development at Dell is a
collaborative process between individual team members, mentors and the organization at
large. Working together, we can balance your aspirations and interests with Dells
strategy and goals, following through with a purposeful plan of action.
The Dell development model

At Dell, career development follows a 70/20/10 model, which encompasses personalized
development in three distinct categories:
70 percent on-the-job experience
Discover opportunities to strengthen your skills.
Grow new strengths through stretch assignments and special projects.
Develop a personal performance plan.
20 percent learning through others

Find a mentor through Dells Mentor Connect tool.
91
Join a Dell Employee Resource Group.

10 percent formal classes or training
Take advantage of formal training opportunities.
Review what you learn with your leader.
Apply what youve learned to your role.
This model is an industry standard thats proven most effective for team members across
departments and at varying career levels. Each individual team member is empowered to
use all resources available to them as they seek to fulfill their aspirations. Team members
work with their supervisor to develop an individual development plan (IDP) and follow
through by meeting set goals in a realistic time frame.
Dell continued success relies on teamwork and the opportunity each employee has to
learn and excel. Our winning culture mandates that we invest in people, value learning
and remain endlessly curious. We are committed to being a meritocracy and to
developing, retaining and attracting the best people, reflective of our marketplace.
Dell provides global talent management programs to develop people who can execute our
business strategy and meet customer needs. In the last five to ten years, our systems and
processes catapulted us into the Fortune 50 as an industry leader.
However, we face a major inflection point. With more than half of Dells workforce now
outside of the U.S., a significant portion of our key growth areas are in emerging
countries. Our current programs and processes must serve as springboards as we
regenerate and rejuvenate our talent and leadership development programs to meet
critical growth and expansion objectives.
Talent Planning
Dell continuously invests in processes and systems to place the right talent in the right
roles. In 2009, Dells Executive Leadership Team and Board of Directors conducted
92
Performance Planning
Dells performance management system links individual goals with organizational
performance. The system helps identify the next generation of Dell leaders and elevate
the performance of all Dell employees.
The performance management process requires annual formal reviews, the calibration of
talent and allocation of performance rewards and promotions all decisions in line with
being a meritocracy. Throughout the year, managers provide employees with ongoing
feedback, coaching, training and on-the-job development. Employees and managers
mutually create the employee-development plans.
This entire process aligns individual-performance objectives and career-development
planning with business and company goals and results. This plan evolves over time,
adjusting to internal and external changes.
Learning and Development

Our learning and development strategy is focused on three outcomes:
a culture that fosters exceptional and agile organizational performance
the best workforce teams in the industry
superior individual-learning experiences

Dell creates learning experiences that draw from multiple approaches and styles. We
value on-the-job experience and assignments, and we also offer networking, coaching,
mentoring and formal learning programs. We offer tuition reimbursement for employees
and scholarship opportunities for the children of Dells U.S. employees.
Learning through Experience and Others

Dell employees work with managers to create well-rounded development plans to prepare
them for future roles. An ideal plan blends training with on-the-job experiences and
career moves and mentoring from co-workers and others. Employees build networks in
which they can give and receive feedback. Targeted external coaching is offered to
93
executives to provide guidance and support to help improve performance and grow
leadership capabilities. Dell employees may use the 360 review process to gain
performance insight and identify opportunities for growth and improvement.
Training and Learning Programs

Formal and informal learning programs foster individual and professional development.
Courses are directly tied to business needs and designed to address specific
competencies. Dell training courses help prepares employees for current and future roles.
Courses cover a range of topics, starting with on boarding processes and moving to more
complex topics such as business process improvement (BPI) and sales and compliance
training. In the last five years, Dell made significant investments in manager and
leadership development, including the addition of two new online tools:
Organizational Culture of HP:

The organization culture of Hewlett-Packard is also known as The H-P Way. Within the
context of The H-P Way, the employees of the organization together with the
management are expected to follow a saying Dont Be Evil. The H-P Way is
supposedly to be honest in all its operations and in all of the information coming out from
the business organization. But, one cannot remove the fact that not all information are
going out and being spread out to the whole world. It is for those with the information
power to keep a secret what they know and for the whole world to find out. This is what
happened to Hewlett-Packard (HP) that caused a catastrophe in the whole world. It was
said that the organization is not being honest and good at all. Thus, it resulted to the
whole world staying in the dark that made them look really evil.
94
Dells Corporate Culture

The corporate culture at Dell follows the home country standard, the United States
of America. Thus, employees are required to speak English in the work place. The
atmosphere is much the same as in the USA. This includes the corporate culture and
bureaucratic element to maintain convergence on administrative procedures. While
emphasizing convergence, Dell China also aims to localize itself in the community in its
mission to go global, act local. While keeping the overall brand image of Dell intact,
slight changes are made in order to appeal to the local Chinese consumer and become
insiders in the hard to penetrate market that is the Peoples Republic of China.
There is a specific soul of dell, which effectively communicates the strategy that
employees have in order to be a winner in the market place.
LEADERSHIP STYLES OF DELL

DELL is a older organization, at this level the organization need to be
effective and have a obvious route. They are also a aggressive organization
,therefore need to keep an eye on the long run in unique to product re
modelling.
95
LEADERSHIP STYLES OF Hp
96
DESCRIPTION OF STYLES
97
Leadership Styles
Hp is not just focus on one style. The company is focused on each strategy for getting the
customer satisfaction.
Hewlett-Packard named Carly Fiorina the first female CEO of a Fortune 20 company
with a
mandate to shake things up. HP wasnt quite prepared for receiving just that. Fortune
magazine called
Carly Fiorina The Most Powerful Woman in Business added that Carly proved to be a
world-class risk taker. Carly led HP to a merger with Compaq Computers, which was
touted
as one of the high-tech mergers in history and Carlys risk taking endeavors charted a
new strategy to
98
help customers and consumers prosper in the digital age and she received numerous
awards for her
globalization of business.
Carly Fiorina held a job-centered leadership style. As a matter of fact, she was so job
focused
and driven that a year after she arrived as CEO of HP she unveiled plans for a major
reorganization.
When her top executives told her it would take a year to pull it off, she ordered it done in
three months,
and it was. Employees said that keeping up with Fiorina could be trying and many said
that they didnt
Think there was much sleep going on as Ms. Fiorinas directives can consume days and
nights.
Many executives at HP called the phenomenon the Fiorina Shakeup. Indeed, where
Carly Fiorina
went wrong was exerting a truly authority-compliance leadership style that caused quite
an employee
turnover. Although Ms. Fiorina was successful in turning HP around in her six-year stint,
she
neglected to foster employee needs. Ms. Fiorina was high on the acquired needs theory
with her
employees, although she is a highly motivational speaker and was able to instill in her
employees their
need for achievement, power, and affiliation, she was not able to give her employees their
needs from
99
process motivation theories, including their personal lives and behaviors. The employee
equity wasnt
there and executives started to complain that the employees were not prepared for this
major
reorganization. Another mistake Ms. Fiorina made was under-delegating. Carly Fiorina
was a very dynamic and headstrong leader. While she was able to move
mountains and shake up HP, and while she often gave very motivational speeches to
co-workers and
especially woman, she was lacking in several leadership areas.
Carly Fiorina was not able to delegate tasks. She would take on projects, re-organize
whole
divisions and then was not able to let go and turn over to co-workers or employees the
tasks once she
had them in place. Another mistaken tactic of Carlys was to move too fast and too drastic
with
changes. Many employees were not able to cope with the fast and hard changes she
demanded
creating a large employee turnover.
REWARDS OF Hp
Hewlett-Packard is the worlds largest technology company, focusing on product
innovation for the cloud, security, and big data. In 2012, HP was awarded the #5 spot as a
Best Global Green Brand and winner of the 2013 Points of Light Corporate Engagement
award. As part of its tradition of civic engagement, HP provides each employee with 12
100
hours per quarter of paid volunteer time. The company needed an incentivized program to
help them reward employee volunteerism that:
Was easy to use
Increased employee participation
Encouraged the documentation of volunteer hours
Provided further benefits to local communities
Reward engaged employees with a charitable gift card

To execute its U.S. Rewards & Recognition program, HP partnered with Network for
Good to reward volunteering. All U.S. employees that report at least 10 hours of
volunteer work per quarter receives a $50 Good Card.
Employees are lauded for volunteering and enabled to give back.
Adding the Good Card to its existing volunteer program allows HP to recognize
individual achievements and enables employees to give more to their community without
spending their personal money or using vacation time.
Good Cards empower employees to donate to their chosen charity.
Historically, dollars-for-doers programs give matching grants to the charities where
employees volunteered. With the Good Card, employees have the opportunity to donate
to the charities of their choice. With more than 1 million charitable options, the causes
that HPs employee can donate to are endless.
Successful volunteers receive a personalized reward.
Employees receive an individualized email with a Good Card code that can be redeemed
online.
101
While physical cards are available, the use of electronic codes lets HP keep track of each
Good Card account and means that a lost card doesnt result in a lost opportunity to
donate.
About Good Cards

The Good Card is a charity gift card that can be branded to any companys needs. With
more than 1 million charities available, it gives employees the ability to spread help and
hope wherever they choose.
REWARDS OF DELL
Benefits ,Rewards, Balance. Have it all at Dell.
Our people are the most critical component of our long-term success. So its no surprise,
then, how much time and effort we pour into creating a comprehensive benefits package
for all team members. We strive to provide the best choice and value at the best cost. Our
packages are competitive in the market and relevant to the various countries in which we
operate.
We're here to reward your achievements.

It's simple. We believe in rewarding our team members for a job well-done. All of our
professionals function as an essential part of a team. Our people achieve success by
meeting and often exceeding clearly defined and measurable objectives. When it
comes to compensation, Dell is committed to staying competitive in the market. We're
constantly reviewing the latest trends in labor costs to create desirable salary ranges.
Several departments have bonus and sales incentive programs to reward performance on
a company, business or individual level for the fiscal year. And long-term incentive
programs exist to reward individuals based on career level and performance.
102
TOP 100 RESPONSIBLE OMPANIES

Dell was named #7 on FORTUNE China's Top 100 Most Responsible Companies for its
strong corporate social responsibility strategy.
LOGISTICS OF DELL
Logistics is defined as a business planning framework for the management of material,
service, information and capital flows. It includes the increasingly complex information,
communication and control systems required in today's business environment.
Logistics Services
Receive systems where you want them, when you want them, how you
want them.
By selecting the combination of logistics services that best complements your receiving
and deployment capabilities you can ensure products arrive in a manner that speeds your
deployment process.
Packaging Ship box labeling enables you to track your new systems from the factory
to the end-users desk without removing the system from the box. You can receive your
products with the relevant documentation, and peripherals already properly collated with
our Drop in the Box service. We simply add the appropriate documentation or peripherals
to the shipping box for each product you order.
Warehousing Lets you consolidate multiple orders into a single purchase order. We
can also consolidate multiple products and boxes for shipment to your site. We can even
create custom pallets and schedule delivery so that you receive your systems and
accessories all at once rather than one at a time. If you do not want all of your products
delivered at once, we can provide centralized inventory storage as well as timed and
staggered delivery per your specific rollout schedule.
103
Transportation - This service is designed to meet unique shipping logistics or

delivery requirements such as unique trucking and specific on time delivery not usually
covered via standard options. These services could include, lift gate delivery, time
specific delivery, inside delivery (not at dock), and unboxing of equipment w/trash
removal. If you have offices in multiple countries, we can ship systems to each site, even
to your end-users desk and provide the required Tax and Export compliance
documentation.
Take advantage of our extensive global supply chain and

exceptional logistics capability.
Having hardware arrive at the right place and time is critical to the deployment process.
Dell Logistics services let you pre-determine the delivery to an exact location at a pre-set
time, including after business hours. This saves you time because you can have IT
resources in place when you need them on the exact day the new systems arrive and
need to be up and running.
With such precision, you can confidently schedule deployment and staff IT resources.
104
3rd Deliverable
Chapter 6
HP and DELL Ratio Analysis - Two-Year Comparison

Liquidity ratios
Liquidity ratios measure a companys ability to meet its maturing short-term obligations.
In other words, can a company quickly convert its assets to cash without a loss in value if
necessary to meet its short-term obligations? Favorable liquidity ratios are critical to a
company and its creditors within a business or industry that does not provide a steady and
predictable cash flow. They are also a key predictor of a companys ability to make
timely payments to creditors and to continue to meet obligations to lenders when faced
with an unforeseen event.
Current Ratio = Current Assets / Current Liabilities

This ratio reflects the number of times short-term assets cover short-term liabilities and is
a fairly accurate indication of a company's ability to service its current obligations. A
higher number is preferred because it indicates a strong ability to service short-term
obligations. The composition of current assets is a key factor in the evaluation of this
ratio. Depending on the type of business or industry, current assets may include slowmoving inventories that could potentially affect analysis of a company's liquidity how
105
long could it potentially take to convert raw materials and inventory into finished
products?
(For this reason, the quick ratio may be preferable to the current ratio because it
eliminates inventory and prepaid expenses from this ratio for a more accurate gauge of a
company's liquidity and ability to meet short-term obligations.)
The current ratio for Dell is 1.4, which compared to the HP of 1.1 indicates the
company's ability to service short-term obligations is satisfactory. However the value of
the quick ratio will provide a clearer indication of the company's success in this area.
Ratio Quick
(Cash + Marketable Securities + Trade Accounts Receivable) / Current Liabilities
This ratio, also known as the acid test ratio, measures immediate liquidity - the number of
times cash, accounts receivable, and marketable securities cover short-term obligations. A
higher number is preferred because it suggests a company has a strong ability to service
short-term obligations. This ratio is a more reliable variation of the Current ratio because
inventory, prepaid expenses, and other less liquid current assets are removed from the
calculation.
The quick ratio for DELL is 1.1, which compared to the HP of 0.7 indicates the
company's ability to service short-term obligations is favorable. DELL has more
favorable ratio.
Defensive Interval Days

(Cash + Marketable Securities + Trade Accounts Receivable) / ((Operating Expenses Other Expenses - Interest Expense - Provision for Income Taxes - Depreciation
Expense) / Days)
106
This ratio gauges the threat of insolvency for investors by calculating the number of days
a company can operate without any cash returns while meeting its basic operational costs.
In general, this number should be between 30 to 90 days.
Defensive interval days for DELL are 1211 and HP are 1164 days that indicates that the
company's degree of protection against insolvency may not be ideal. but compare for
these.HP have better.
Accounts Receivable to Working Capital

Trade Accounts Receivable / (Current Assets - Current Liabilities)
This ratio measures the dependency of working capital on the collection of receivables. A
lower number for this ratio is preferred, indicating that a company has a satisfactory level
of working capital and accounts receivable makes up an appropriate portion of current
assets.
The accounts receivable to working capital ratio for DELL is 1.2, and which compared to
the HP 3.9 indicates the company's performance may be insufficient in this area. Dell
have good ratio as compared to HP.
Inventory to Working Capital

Inventory / (Current Assets - Current Liabilities)
This ratio measures the dependency of working capital on inventory. A lower number for
this ratio is preferred indicating that a company has a satisfactory level of working capital
and inventory makes up a reasonable portion of current assets.
The inventory to working capital ratio for DELL is 0.2 , which compared to the HP of 1.2
indicates this HP ratio may not be in line with company goals. Dell have good ratio as
compared to HP.
107
Long Term Liabilities to Working Capital

Long Term Liabilities / (Current Assets - Current Liabilities)
This ratio measures the degree to which a company's long-term debt has been used to
replenish working capital versus fixed asset acquisition.
The long-term liabilities to working capital ratio for Dell is 1.7, which compared to the
HP of 6.8 indicates the value of this ratio is meeting the company's expectations. Dell
have better ratio as compared to HP.
Sales to Working Capital

Sales / (Current Assets - Current Liabilities)
This ratio measures a company's ability to finance current operations. Working capital
(current assets - current liabilities) is another measure of liquidity and the ability to cover
short-term obligations. This ratio relates the ability of a company to generate sales using
its working capital to determine how efficiently working capital is being used. In
general, a lower number is preferred because it indicates a company has a satisfactory
level of working capital. However, an exceptionally low number may indicate
inadequate sales levels are being generated.
The sales to working capital ratio for Dell is 7.8, which compared to the HP of 23.2
reveals that the company's level of working capital is strong. The company may want to
make an effort to generate additional sales using the available working capital. Dell Have
better ratio because 10 to 15 % industrial average for working capital. Dells ratio is near
to this.
108
Activity Ratios
Activity ratios provide a useful gauge of a company's operations by determining, for
example, the average number of days it takes to collect on customer accounts and the
average number of days to pay vendors. A key point to keep in mind when evaluating
these ratios is that seasonal fluctuations are not necessarily reflected in the numbers that
are derived from these calculations based on an account balance on one single day.
Accounts Receivable Turnover

Sales / Trade Accounts Receivable
This ratio measures the number of times receivables turn over in a year and reveals how
successful a company is in collecting its outstanding receivables. A higher number is
preferred because it indicates a shorter time between sales and cash collection.
The accounts receivable turnover for Dell is 6.3, which compared to the HP of 5.9
suggests that HP ratio is on target with company objectives.
Days Sales in Receivables

Trade Accounts Receivable / (Sales / Days)
This ratio measures the average number of days a company's receivables are outstanding.
A lower number of days is desired. An increase in the number of days receivables are
outstanding indicates an increased possibility of late payment by customers. Companies
should attempt to reduce the number of days sales in receivables in order to increase cash
flow.
The days sales in receivables for DELL is 57.6 days that indicates the company is NOT
effective in collecting outstanding receivables. And HP is 68.1.but if Dell has better than
HP ratio.
Operating Cycle Days

(Inventory / (Cost of Sales / Days)) + (Trade Accounts Receivable / (Sales / Days))
109
This ratio calculates the total conversion period for a company, or in other words, the
average number of days it takes to convert inventory into cash from sales. It is calculated
by adding together the days cost of sales in inventory to the days sales in receivables.
Evaluating this ratio can be helpful in gauging the effectiveness of marketing,
determining credit terms to extend to customers, and collecting outstanding accounts.
The operating cycle days for Dell is is 68 days, which compared to the HP of 87 days
indicates the company may not be successfully minimizing the amount of time it takes to
convert products and services into cash. Dells ratio is better than HP.
Sales to Assets
Sales / Total Assets
This ratio measures a company's ability to produce sales in relation to total assets to
determine the effectiveness of the company's asset base in producing sales. A higher
number is preferred, indicating that a company is using its assets to successfully generate
sales. This ratio does not take into account the depreciation methods employed by each
company and should not be the only measure of effectiveness of a company in this area.
Sales to assets for Dell is 1.4, which compared to the HP of 1.2 indicates the company is
performing well in this area. Dells ratio se better than HP.
Sales to Net Fixed Assets
Sales / (Property and Equipment - Accumulated Depreciation)
This ratio measures a company's ability to effectively utilize its fixed assets to generate
sales. This ratio is similar to the sales to assets ratio, but it excludes current assets, longterm investments, intangible assets, and other non-current assets. A higher number is
desired, indicating that a company productively uses its fixed assets to produce sales.
This ratio does not take into account the depreciation methods employed by each
In addition, fixed assets that are almost fully depreciated and labor-intensive operations
may interfere with the interpretation of this ratio.
110
Sales to net fixed assets Dell is 29.2, which compared to the HP of 9.8 indicates the
company is making effective use of its fixed assets to generate sales. Dells ratio is better
than HP ratio.
Percent Depreciation Expense to Fixed Assets

Depreciation Expense / Property and Equipment * 100This ratio measures the
reasonableness and consistency of a company's depreciation expense over time.
The percent depreciation expense to fixed assets for Liberty Medical Group is 19%,
which compared to the baseline of 18% indicates that HP value of this ratio may not be
meeting the company's expectations. Dell is Better than HP ratios.
Percent Accumulated Depreciation to Fixed Assets

Accumulated Depreciation / Property and Equipment * 100
This ratio measures the cumulative percentage of productive asset costs a company has
allocated to operations. The percent accumulated depreciation to fixed assets Dell is
57%, which compared to the HP of 56% indicates both this ratio is Not on target with
company objectives.
Fixed Assets to Equity Net

(Property and Equipment - Accumulated Depreciation) / Total Equity
This ratio measures the extent to which investors' capital was used to finance productive
assets. A lower ratio indicates a proportionally smaller investment in fixed assets in
relation to net worth, which is desired by creditors in case of liquidation. Note that this
ratio could appear deceptively low if a significant number of a company's fixed assets are
leased.Net fixed assets to equity for Dell is 0.2, which compared to the HP of 0.4.
111
Profitability ratios
Profitability ratios measure a companys ability to use its capital or assets to generate
profits. Improving profitability is a constant challenge for all companies and their
management. Evaluating profitability ratios is a key component in determining the
success of a company. It is important to note that all profitability ratio calculations are
based on earnings before taxes.
Percent Gross Profit

((Sales - Cost of Sales) / Sales) * 100
This ratio measures the gross profit earned on sales and reports how much of each sales
dollar is available to cover operating expenses and contribute to profits.
The percent gross profit for DELL is 22.00%, which compared to the HP of 23.00%.
Percent Profit Margin on Sales

Earnings before Taxes / Sales * 100
This ratio measures how much profit a company makes on each sales dollar received and
how well a company could potentially deal with higher costs or lower sales in the future.
The percent profit margin on sales for DELL is 7%, which compared to the HP of 6%
indicates sales are significantly contributing to the company's bottom line.
Percent Rate of Return on Assets

Earnings before Taxes / Total Assets * 100
This ratio measures how effectively a company's assets are being used to generate profits.
It is one of the most important ratios when evaluating the success of a business. A higher
112
number reflects a well managed company with a healthy return on assets. Heavily
depreciated assets, a large number of intangible assets, or any unusual income or
expenses can easily distort this calculation.
The percent rate of return on assets for DELL is 9%, which compared to the HP of 7%
indicates that Dell company successfully utilizes its asset base to generate profits as
compared to HP.
Percent Rate of Return on Equity

Earnings before Taxes / Total Equity * 100
This ratio expresses the rate of return on equity capital employed and measures the ability
of a company's management to realize an adequate return on the capital invested by the
owners in a company. A higher number is preferred for this commonly analyzed ratio.
The percent rate of return on equity for DELL is 48%, which compared to the HP of 24%
indicates that DELL company's management is performing effectively in this area.
Coverage ratios
Coverage ratios assess a companys ability to meet its long-term obligations, remain
solvent, and avoid bankruptcy. It measures how well a companys cash flow covers its
short-term financial obligations. Lenders evaluate coverage ratios to determine the
degree to which a company could become vulnerable when faced with economic
downturns. A company with a high level of debt poses a higher risk to long-term
creditors and investors.
Debt to Total Assets

Total Liabilities / Total Assets
113
This ratio measures what proportion of debt a company is carrying relative to its assets.
A ratio value greater than one indicates a company has more debt than assets. Naturally,
companies and creditors prefer a lower number.
The debt to total assets ratio for DELL is 0.8, which compared to the HP of 0.8 indicates
that both company should be able to withstand losses without harming creditor interests
or could obtain additional financing if desired.
Percent Owners Equity

Total Equity / Total Assets * 100
This ratio measures what proportion of total assets was provided by the owners equity.
The higher the number the more total capital has been contributed by owners and the less
by creditors.
The percent owners' equity ratio for DELL is 20%, which compared to the HP of 28%.
Equity Multiplier
Total Assets / Total Equity
This ratio measures the extent to which a company uses debt to finance its assets. The
higher the number is, the more a company is relying on debt to finance its assets.
The equity multiplier for DELL is 5.1, which compared to the HP of 3.5.
Debt to Equity
Total Liabilities / Total Equity
This ratio measures the financial leverage of a company by indicating what proportion of
debt and equity a company is using to finance its assets. A lower number suggests there
is both a lower risk involved for creditors and strong, long-term, financial security for a
company.
The debt to equity ratio for DELL is 4.0, which compared to the HP of 2.9
114
Cash Flow to Current Maturities Long Term Debt

(Net Income + Depreciation Expense) / Current Portion of Long Term Debt
This ratio measures how well cash flow from operations covers current maturities. Since
cash flow is necessary for debt retirement, this ratio reveals a company's capability to
repay existing debt and to take on additional debt. A higher number for this ratio is
desired.
The cash flow to current maturities long-term debt ratio DELL is 1.5, which compared to
the HP of 1.6.
Times Interest Earned

Earnings before Interest and Taxes / Interest Expense
This ratio measures a company's ability to meet interest payments. A higher number is
preferred, suggesting a company can easily meet interest obligations and can potentially
take on additional debt. Note that this particular ratio uses earnings before interest and
taxes because this is the income amount available to cover interest.
The times interest earned ratio for DELL is 15.9, which compared to the HP of 11.5.
Expense to sales ratios

Expense to sales ratios express specific expense items as a percentage of net sales.
Comparisons of expenses are more meaningful because net sales is used as a constant.
Extreme variations in these ratios are most pronounced between capital- and laborintensive industries.
Percent Depreciation to Sales

Depreciation Expense / Sales * 100
This ratio measures depreciation expense as a percentage of sales and is based on a
company's fixed assets and how quickly they are being depreciated or amortized, relative
115
to sales. Any depletion expenses should be included in this ratio as well. Note that
depreciation methods should also be considered when evaluating this ratio.
The percent depreciation to sales for DELL is 2%, which compared to the HP of 4%.
Detailed Ratio Analyses- group comparison

Hp & Dell
Liquidity Ratios:
Current Ratio
Current Assets / Current Liabilities
obligations.
The current ratio for Dell is1.3, which compared to the baseline Hp of 1 indicates the
company's ability to service short-term obligations is satisfactory.
116
Quick Ratio
(Cash + Marketable Securities + Trade Accounts Receivable) / Current Liabilities
times cash,
Accounts receivable, and marketable securities cover short-term obligations. A higher
number is preferred because it suggests a company has a strong ability to service shortterm obligations. This ratio is a more reliable variation of the Current ratio because
calculation.
The quick ratio for Dell is 1.0, which compared to the baseline hp of 0.60 indicates the
company's ability to service short-term obligations is favorable.
Defensive Interval Days

(Cash + Marketable Securities + Trade Accounts Receivable) / ((Operating Expenses Other Expenses
- Interest Expense - Provision for Income Taxes - Depreciation Expense) / Days)
This ratio gauges the threat of insolvency for investors by calculating the number of days
a company can operate without any cash returns while meeting its basic operational costs.
In general, this number should be between 30 to 90 days.
Defensive interval days for Dell are 1125.9 days and for hp are 994.8 that indicates that
the company's degree of protection against insolvency may be ideal.
Accounts Receivable to Working Capital

Trade Accounts Receivable / (Current Assets - Current Liabilities)
117
This ratio measures the dependency of working capital on the collection of receivables. A
lower number for this ratio is preferred, indicating that a company has a satisfactory level
of working capital and accounts receivable makes up an appropriate portion of current
assets.
The accounts receivable to working capital ratio for Dell is 1.67, which compared to the
baseline hp of 36.9 indicates the company's performance may be sufficient in this area.
Inventory to Working Capital

Inventory / (Current Assets - Current Liabilities)
This ratio measures the dependency of working capital on inventory. A lower number for
this ratio is preferred indicating that a company has a satisfactory level of working capital
and inventory makes up a reasonable portion of current assets.
The inventory to working capital ratio for Dell is 0.2, which compared to the baseline hp
of 12.9 indicates this ratio may be in line with company goals.
Long Term Liabilities to Working Capital

Long Term Liabilities / (Current Assets - Current Liabilities)
This ratio measures the degree to which a company's long-term debt has been used to
replenish working capital versus fixed asset acquisition.
The long-term liabilities to working capital ratio for Dell is 1.7, which compared to the
baseline hp of 69.9 indicates the value of this ratio is meeting the company's
expectations.

118
its working capital to determine how efficiently working capital is being used. In general,
a lower number is preferred because it indicates a company has a satisfactory level of
working capital. However, an exceptionally low number may indicate inadequate sales
levels are being generated.
The sales to working capital ratio for Dell are 10.0, which compared to the baseline of hp
219.8 reveals that the company's level of working capital is strong. The company may
want to make an effort to generate additional sales using the available working capital.
Activity Ratios:
Accounts Receivable Turnover
Sales / Trade Accounts Receivable
This ratio measures the number of times receivables turn over in a year and reveals how
successful a company is in collecting its outstanding receivables. A higher number is
preferred because it indicates a shorter time between sales and cash collection.
The accounts receivable turnover for Dell is 6.2, which compared to the baseline hp of
5.9 indicates this ratio is on target with company objectives.
Days Sales in Receivables

Trade Accounts Receivable / (Sales / Days)
This ratio measures the average number of days a company's receivables are outstanding.
A lower number of days are desired. An increase in the number of days receivables are
outstanding indicates an increased possibility of late payment by customers. Companies
119
should attempt to reduce the number of days sales in receivables in order to increase
cash flow.
The days sales in receivables for Dell are 58.9 days that indicates the company is
effective in collecting outstanding receivables by comparing with peer group (hp) that is
61.3.
Operating Cycle Days

(Inventory / (Cost of Sales / Days)) + (Trade Accounts Receivable / (Sales / Days))
This ratio calculates the total conversion period for a company, or in other words, the
average number of days it takes to convert inventory into cash from sales. It is calculated
by adding together the days cost of sales in inventory to the days sales in receivables.
Evaluating this ratio can be helpful in gauging the effectiveness of marketing,
determining credit terms to extend to customers, and collecting outstanding accounts.
The operating cycle days for Dell is 67.7 days, which compared to the baseline hp of
89.40 days, indicates the company is successfully minimizing the amount of time it takes
to convert products and services into cash.
Sales to Assets
sales.
Sales to assets for Dell is 1.6, which compared to the baseline hp of 1.0 indicates the
company is performing well in this area.
120

Sales to net fixed assets for Dell is 24.3, which compared to the baseline hp of 10.4
indicates the company is making effective use of its fixed assets to generate sales.
Percent Depreciation Expense to Fixed Assets

Depreciation Expense / Property and Equipment * 100
This ratio measures the reasonableness and consistency of a company's depreciation
expense over time.
The percent depreciation expense to fixed assets for Dell is 18.3%, which compared to
the baseline of hp 19.6% indicates the value of this ratio is meeting the company's
expectations.
Percent Accumulated Depreciation to Fixed Assets

Accumulated Depreciation / Property and Equipment * 100
This ratio measures the cumulative percentage of productive asset costs a company has
allocated to operations.
The percent accumulated depreciation to fixed assets for Dell is 53.1%, which compared
to the baseline hp of 51.70% indicates this ratio is not on target with company objectives.
121
Net Fixed Assets to Equity

leased.
Net fixed assets to equity for Dell is 0.4, which compared to the baseline hp of 0.3
indicates the company's performance may be insufficient in this area.
Profitability Ratios:
Percent Gross Profit
((Sales - Cost of Sales) / Sales) * 100
This ratio measures the gross profit earned on sales and reports how much of each sales
dollar is available to cover operating expenses and contribute to profits.
The percent gross profit for Dell is 17.50%, which compared to the baseline hp of 23.4%,
is not a good indication of financial health for the company.
Percent Profit Margin on Sales

Earnings before Taxes / Sales * 100
This ratio measures how much profit a company makes on each sales dollar received and
how well a company could potentially deal with higher costs or lower sales in the future.
122
The percent profit margin on sales for Dell is 3.8%, which compared to the baseline hp of
7.1% indicates sales are not significantly contributing to the company's bottom line.

The percent rate of return on assets for Dell is 6.0%, which compared to the baseline hp
of 6.9% indicates the company successfully utilizes its asset base to generate profits but
lower than its competitor.

The percent rate of return on equity for Dell is 35.9%, which compared to the baseline hp
of 23.3% indicates the company's management is performing effectively in this area.
Coverage Ratios:
Debt to Total Assets
123
Total Liabilities / Total Assets

This ratio measures what proportion of debt a company is carrying relative to its assets. A
ratio value greater than one indicates a company has more debt than assets. Naturally,
companies and creditors prefer a lower number.
The debt to total assets ratio for Dell is 0.8, which compared to the baseline hp of 0.7
indicates the company should be able to withstand losses without harming creditor
interests or could obtain additional financing if desired.
Percent Owners Equity

Total Equity / Total Assets * 100
This ratio measures what proportion of total assets was provided by the owners equity.
The higher the number the more total capital has been contributed by owners and the less
by creditors.
The percent owners' equity ratio for Liberty Dell is 16.8%, which compared to the
baseline hp of 29.8% indicates the company may not own an adequate or large enough
portion of its asset base.
Equity Multiplier
Total Assets / Total Equity
This ratio measures the extent to which a company uses debt to finance its assets. The
higher the number is, the more a company is relying on debt to finance its assets.
124
The equity multiplier for Dell is 6.0, which compared to the baseline hp of 3.4 indicates
the company's assets are highly leveraged and the company could be considered a risk by
creditors.
Debt to Equity
debt and equity a company is using to finance its assets. A lower number suggests there is
both a lower risk involved for creditors and strong, long-term, financial security for a
company.
The debt to equity ratio for Dell is 5.0, which compared to the baseline hp of 2.4
indicates there may be some issues with the way the company is financed.
Cash Flow to Current Maturities Long Term Debt

(Net Income + Depreciation Expense) / Current Portion of Long Term Debt
This ratio measures how well cash flow from operations covers current maturities. Since
cash flow is necessary for debt retirement, this ratio reveals a company's capability to
repay existing debt and to take on additional debt. A higher number for this ratio is
desired.
The cash flow to current maturities long-term debt ratio for Dell is 3.4, which compared
to the baseline hp of 1.5 indicates the company is in a strong position to meet its current
obligations on long-term debt based on its current cash flow.

125
take on additional debt.
Note that this particular ratio uses earnings before interest and taxes because this is the
income amount available to cover interest.
The times interest earned ratio for Dell is 13.6, which compared to the baseline hp of
13.9 indicates the company's interest coverage is not sufficient.
Expense to sale ratio:

depreciation methods should also be considered when evaluating this ratio.
The percent depreciation to sales for Dell is 1.6%, which compared to the baseline hp of
3.9% indicates the company is performing well in this area.
126
DELL COMPANY
DETAILED RATIO ANALYSIS-INDUSTRY
COMPARISON
LIQUIDITY RATIOS:
127
Current Ratio
products? (For this reason, the quick ratio may be preferable to the current ratio because
it eliminates inventory and prepaid expenses from this ratio for a more accurate gauge of
a company's liquidity and ability to meet short-term obligations.
The current ratio for Dell company is 1.19, which compared to the baseline of 1
indicates the company's ability to service short-term obligations is good.
Quick Ratio
times cash,
accounts receivable, and marketable securities cover short-term obligations. A higher
number is preferred because it suggests a company has a strong ability to service shortterm obligations. This ratio is a more reliable variation of the Current ratio because
calculation. The quick ratio for Liberty Dell Group is 1.13, which compared to the
baseline of 1 indicates the company's ability to service short-term obligations is good.

(current assets -current liabilities) is another measure of liquidity and the ability to cover
128
working capital. However, an exceptionally low number may
indicate inadequate sales levels are being generated.
The sales to working capital ratio for dell company is 12.57, which compared to the
baseline of 15.22 reveals that the company have a satisfactory working capital position.
The following list includes several suggestions Dell company should consider to
improve the
liquidity ratios:
Reduce days in accounts receivable to improve current assets by evaluating

accounts receivable on amore frequent basis and take a more assertive stance in
the collection of accounts receivable and delinquent accounts.

Prepare thorough cash forecasts and evaluate the company's ability to meet goals
on a regular basis.
Consider paying off short-term obligations if the cash position of the company is
favorable.
Consider converting short-term debt to long-term debt.
Reduce levels of non-moving inventory.
ACTIVITY RATIOS:
example, the average number of days it takes to collect on customer accounts and the
average number of days to pay vendors. A key point to keep in mind when evaluating
these ratios is that seasonal fluctuations are not necessarily reflected in the numbers that
are derived from these calculations based on an account balance on one single day.
The following list includes several suggestions Dell company should consider to
improve the accounts receivable turnover and days sales in receivables ratios:
Prepare aging schedules to determine how long receivables have been

outstanding. The company should review these on a regular basis to look for
patterns in delinquent accounts. Communicate with customers and apply
increasing pressure to pay as the number of days outstanding increases.
129
Develop a strategy to deal with problem customers and delinquent accounts.

Invoice customers in a timely manner.
Enforce credit policies to require credit references of new customers; to evaluate
the credit currently extended to each customer, and to update credit terms for your
valuable and problem customer accordingly.

Implement customer incentives to encourage prompt payment such as discounts
Products.
Sales to Assets
Sales to assets for Dell company is 1.20, which compared to the baseline of 8.50
indicates the company's performance in this area is lacking and management should
consider taking measures to improve this ratio.

In addition, fixed assets that are almost fully depreciated, and labor-intensive
operations may interfere with the interpretation of this ratio.
130
Sales to net fixed assets for Dell company is 10.74, which compared to the baseline of
20.10 indicates the company is not making use of its fixed assets to effectively generate
sales. The following list includes several suggestions Dell company should consider to
improve the sales to assets and sales to fixed assets ratios:
Consider leasing rather than purchasing assets, or consider purchasing used
equipment.
Carefully evaluate all asset purchases to determine how the asset will directly and
indirectly affect
sales. Be sure to consider maintenance costs, warranties, salvage values, and the
impact of
changing technology in relation to the purchase of new equipment.
Consider liquidating under-utilized assets or developing alternative uses to
generate revenue from under-utilized assets.

Maintain detailed records for all assets the company currently owns or leases.
Ensure all equipment is properly maintained and evaluate its overall condition and
effectiveness
within operations at least once a year.
Eliminate any unnecessary, extravagant assets. Assets should have a direct or

indirect impact on
sales.
Set monthly or quarterly sales goals and provide incentives to salespeople.

Create customer promotions, offer discounts and expand product lines to
encourage sales.

leased. Net fixed assets to equity for dell company is 0.50, which compared to the
baseline of 3.90 indicates the company's performance is bad in this area.
131

expenses can easily distort this calculation. The percent rate of return on assets for Dell
company is 4.12%, which compared to the baseline of 11.10%indicates there is a need
for improvement in this area to ensure the company can remain competitive and continue
to operate successfully.

The percent rate of return on equity for dell company is 26.60%, which compared to the
baseline of 40.20% indicates management may not be effectively managing the profits
earned based on the owners investment in the company.
The following list includes several suggestions dell company should consider to improve
the
profitability ratios:
132
Require management to utilize budgets to track expenses on a regular basis, and

identify those that are out of line. Assign specific individuals or departments to be
responsible for different cost centers.

Reduce operating costs. In general, one dollar saved in expense is worth at least
three or four extra sales dollars generated.

Negotiate with vendors to lower costs and have companies submit bids for large
capital expenditures.
Consider leasing instead of purchasing assets or consider purchasing used
equipment.
Consider liquidating under-utilized assets or creating alternative uses to generate
revenue from under -utilized assets.

Coverage ratios assess a companys ability to meet its long-term obligations,
remain solvent, and avoid b bankruptcy. It measures how well a companys cash
flow covers its short-term financial obligations.

Lenders evaluate coverage ratios to determine the degree to which a company
could become vulnerable when faced with economic downturns.

A company with a high level of debt poses a higher risk to long-term creditors and
investors.
Coverage Ratios:
Debt to Equity
company.
The debt to equity ratio for dell company is 3.45, which compared to the baseline of 5.4
indicates the company is financed in a good way and have low risk.
133

taxes because this is the income amount available to cover interest. The times interest
earned ratio for dell company is -11.65, which compared to the baseline of 4.60 indicates
the company's interest coverage may not be sufficient.
The following list includes several suggestions dell company should consider to improve
the coverage ratios:
Examine the companys debt to uncover areas needing improvement and create a
long range action plan to address these areas and pay down debt.
Increase equity by increasing earnings.
Minimize the overall amount of debt to decrease interest expenses.
Reduce interest payments by evaluating financing alternatives and possibly
refinancing existing debt.


depreciation methods should also be considered when evaluating this ratio. The percent
depreciation to sales for dell company is 2%, which compared to the baseline of 1.70%
indicates the company is not performing well in this area.
134
HP COMPANY
DETAILED RATIO ANALYSIS-INDUSTRY
COMPARISON
LIQUIDITY RATIOS:
Current Ratio
products? (For this reason, the quick ratio may be preferable to the current ratio because
135
it eliminates inventory and prepaid expenses from this ratio for a more accurate gauge of
a company's liquidity and ability to meet short-term obligations.
The current ratio for Hp company is 1.10, which compared to the baseline of 1 indicates
the company's ability to service short-term obligations is good.
Quick Ratio
times cash, accounts receivable, and marketable securities cover short-term obligations. A
higher number is preferred because it suggests a company has a strong ability to service
short-term obligations. This ratio is a more reliable variation of the Current ratio because
calculation.
The quick ratio for Liberty Dell Group is 0.97, which compared to the baseline of 1
indicates the company's ability to service short-term obligations is not good.

working capital. However, an exceptionally low number may indicate inadequate sales
levels are being generated.
The sales to working capital ratio for hp company is 23.18, which compared to the
baseline of 15.22 reveals that the company have not a satisfactory working capital
position.
The following list includes several suggestions Hp company should consider to improve
the liquidity ratios:
136
Reduce days in accounts receivable to improve current assets by evaluating

accounts receivable on amore frequent basis and take a more assertive stance in
the collection of accounts receivable and delinquent accounts.

Prepare thorough cash forecasts and evaluate the company's ability to meet goals
on a regular basis.
Consider paying off short-term obligations if the cash position of the company is
favorable.
Consider converting short-term debt to long-term debt.
Reduce levels of non-moving inventory.
ACTIVITY RATIOS:
example, the
average number of days it takes to collect on customer accounts and the average number
of days to
pay vendors. A key point to keep in mind when evaluating these ratios is that seasonal
fluctuations are
not necessarily reflected in the numbers that are derived from these calculations based on
an account
balance on one single day.
the
accounts receivable turnover and days sales in receivables ratios:
Prepare aging schedules to determine how long receivables have been

outstanding. The company should review these on a regular basis to look for
patterns in delinquent accounts. Communicate with customers and apply
increasing pressure to pay as the number of days outstanding increases.

Develop a strategy to deal with problem customers and delinquent accounts.
Invoice customers in a timely manner.
Enforce credit policies to require credit references of new customers; to evaluate
the credit currently extended to each customer, and to update credit terms for your
valuable and problem customer accordingly.
137
Implement customer incentives to encourage prompt payment such as discounts

and additional
Products.
Sales to Assets
Sales to assets for Hp company is 1.06, which compared to the baseline of 8.50 indicates
the company's performance in this area is lacking and management should consider
taking measures to improve this ratio.

In addition, fixed assets that are almost fully depreciated, and labor-intensive operations
may interfere with the interpretation of this ratio.
Sales to net fixed assets for Hp company is 3, which compared to the baseline of 20.10
indicates the company is not making use of its fixed assets to effectively generate sales.
the sales
to assets and sales to fixed assets ratios:
138
Consider leasing rather than purchasing assets, or consider purchasing used
equipment.
Carefully evaluate all asset purchases to determine how the asset will directly and
indirectly affect
sales. Be sure to consider maintenance costs, warranties, salvage values, and the
impact of
changing technology in relation to the purchase of new equipment.
Consider liquidating under-utilized assets or developing alternative uses to
generate revenue from under-utilized assets.

Maintain detailed records for all assets the company currently owns or leases.
Ensure all equipment is properly maintained and evaluate its overall condition and
effectiveness
within operations at least once a year.
Eliminate any unnecessary, extravagant assets. Assets should have a direct or

indirect impact on
sales.
Set monthly or quarterly sales goals and provide incentives to salespeople.

Create customer promotions, offer discounts and expand product lines to
encourage sales.

leased.
Net fixed assets to equity for hp company is 1.50, which compared to the baseline of
3.90 indicates the company's performance is bad in this area.
139

The percent rate of return on assets for Hp company is 6.16%, which compared to the
baseline of 11.10%indicates there is a need for improvement in this area to ensure the
company can remain competitive and continue to operate successfully.

The percent rate of return on equity for hp company is 23.87%, which compared to the
baseline of 40.20% indicates management may not be effectively managing the profits
earned based on the owners investment in the company.
The following list includes several suggestions hp company should consider to improve
the
profitability ratios:
140
Require management to utilize budgets to track expenses on a regular basis, and

identify those that are out of line. Assign specific individuals or departments to be
responsible for different cost centers.

Reduce operating costs. In general, one dollar saved in expense is worth at least
three or four extra sales dollars generated.

Negotiate with vendors to lower costs and have companies submit bids for large
capital expenditures.
Consider leasing instead of purchasing assets or consider purchasing used
equipment.
Consider liquidating under-utilized assets or creating alternative uses to generate
revenue from under -utilized assets.

Coverage ratios assess a companys ability to meet its long-term obligations,
remain solvent, and avoid b bankruptcy. It measures how well a companys cash
flow covers its short-term financial obligations.

Lenders evaluate coverage ratios to determine the degree to which a company
could become vulnerable when faced with economic downturns.

A company with a high level of debt poses a higher risk to long-term creditors and
investors.
Coverage Ratios:
Debt to Equity
company.
The debt to equity ratio for hp company is 2.88, which compared to the baseline of 5.4
indicates the company is financed in a good way and have low risk.
141

taxes because this is the income amount available to cover interest. The times interest
earned ratio for hp company is -11.48, which compared to the baseline of 4.60 indicates
the company's interest coverage may not be sufficient.
The following list includes several suggestions hp company should consider to improve
the
coverage ratios:
Examine the companys debt to uncover areas needing improvement and create a
long range action plan to address these areas and pay down debt.
Increase equity by increasing earnings.
Minimize the overall amount of debt to decrease interest expenses.
Reduce interest payments by evaluating financing alternatives and possibly
refinancing existing debt.


depreciation methods should also be considered when evaluating this ratio. The percent
depreciation to sales for hp company is 14.99%, which compared to the baseline of
1.70% indicates the company is very bad performing in this area.
142
Chapter 7
Hp- Overview of the Financial Results

The table below gives information about the main financial results of Goldstar's activities during the entire period analyzed.
Indicator
Value, in millions dollar
Change
Average
annual
2011
2012
2013
millions $
value,
millions $
(col.4 -
(4-2) : 2
col.2)
1
1. Revenue
127,245
120,357
112,298
-14,947
119,967
11.7466305
143
2. Cost of sales
97,529
92,385
86,380
-11,149
92,098
11.4314717
3.Gross profit (1-2)
29,716
27,972
25,918
-3,798
27,869
12.7809934
4. Other income and expenses, except Finance
16,720
16,899
16,402
-318
costs
16,674
1.90191388
5. EBIT (3-4)
12,996
11,073
9,516
-3,480
-26.77747
11,195
5a. EBITDA
14,661
-5,962
11,742
-2,919
6,814
19.9099652
6. depriciation and interest charges
5,679
5,971
5,232
-447
5,627
7.87110407
7. Income tax expense (from continuing
operations)
-1,908
-717
-1,397
511
-1,341
26.7819706
144
8. Profit (loss) from continuing operations
7,074
-12,650
5,113
-1,961
(5+6+7)
9. Profit (loss) from discontinued operations
10. Profit (loss) (8+9)
-154
27.7212327
7,074
-12,650
5,113
-1,961
-154
27.7212327
11. Other comprehensive income
12. Comprehensive income (10+11)
7,074
-12,650
5,113
-1,961
-154
27.7212327
145
During the year 2013, the revenue was equal to $112,298 million. For the entire period
analyzed, the revenue reduced appreciably (by $14,947 millions, or by 11.74%). The
change in revenue is demonstrated on the chart. For the last year, the gross profit was
equal to $ 25,918 millions. For the 3 years, it was observed that there was a significant
lowering in the gross profit, which showed $3,798 millions.
For the period from 01.01.2013 to 31.12.2013, the company posted a gross profit and
earnings before interest and taxes (EBIT), which was $ 9,516 millions. The final
comprehensive income for Goldstar was $ 5,113 millions during the last year.
140,000
120,000
100,000
80,000
60,000
12. Comprehensive
income (10+11)
40,000
20,000
0
-20,000
2011
2012
2013
Profitability Ratios
Value in
Change
%
2011
1
1. Gross margin.
2. Return on sales (operating
2
23.35%
10.70%
2012
3
23.24%
15.30%
2013
(col.4 -
4
23.08%
14.80%
col.2)
5
-0.27%
4.10%
margin).
146
3. Profit margin.
7.06%
-9.91%
5.80%
-1.26%
All three profitability ratios given in the table have positive values during the last year, as
the company gained gross profit and comprehensive income from operational and
financial activity for this period. The gross margin was equal to 23.08% during the period
from 01.01.2013 to 31.12.2013, that is slightly lower (-0.27%) than the gross margin for
the year 2011.
The profitability calculated by earnings before interest and taxes (Return on sales) is
more important from a comparative analyses point of view. The return on sales was 0.15
or 14.8% per annum for the year 2013, while the profit margin was 5.8% per annum.
50.00%
45.00%
40.00%
35.00%
30.00%
profit marjin
25.00%
Return on sale
20.00%
Gross margin
15.00%
10.00%
5.00%
0.00%
2011
2012
2013
147
1
Return on equity (ROE)
2011
2
23.25%
2012
3
-53.19%
2013
4
23.87%
5
6
0.62% ROE is calculated by taking a year's worth of
earnings (net profit) and dividing them by the
average shareholder equity for that period, and
is expressed as a percentage. It is one of the
most important financial ratios and profitability
Return on assets (ROA)
6.93%
-10.97%
6.16%
metrics. Acceptable value: no less than 12%.

ROA is calculated by dividing net income by
0.77% total assets, and displayed as a percentage.

Acceptable value: no less than 6%.
148
The return on assets amounted to 6.16X% for the period 01.01.201031.12.2013. For the
last 3 years, it was verified that there was an appreciable decrease in the return on assets,
which showed -0.77%. The return on assets had an acceptable value during the whole of
the period.
The most important ratio of business profitability is the return on equity (ROE), which
reflects the profitability of investments by the owners. The profitability of the owners'
investments in Goldstar's assets was 23.87% per annum for the period from 01.01.2013 to
31.12.2013. It is quite a high rate, but to get a more reliable assessment of the obtained
rate, other rates should also be taken into account; including macroeconomic data (for
example, rate of inflation in the country).
The change in the main rates of return on assets and equity of Goldstar is demonstrated in
the following chart for the period reviewed (from 31 December, 2007 to 31 December,
2010).
30.00%
20.00%
10.00%
0.00%
-10.00%
-20.00%
2011
2012
2013
ROE
ROA
-30.00%
-40.00%
-50.00%
-60.00%
149
Analysis of the Business Activity (Turnover Ratios)

In the following table, the calculated rates of turnover of assets and liabilities describe
how fast prepaid assets and liabilities to suppliers, contractors and staff are effected.
Turnover ratios have strong industry specifics and depend on activity. This is why an
absolute value of the ratios does not permit making a qualitative assessment. When assets
turnover ratios are analyzed, an increase in ratios (i.e. velocity of circulation) and a
reduction in circulation days are deemed to be positive dynamics. There is no welldefined interaction for accounts payable and capital turnover. In any case, an accurate
Turnover ratio
Value, days
Rati
Ratio
Change,
2013
days
201
201
201
2011
(col.4 col.2)
1
Receivables turnover (days sales outstanding)
62
60
62
5.9
5.9
+4
55
53
59
6.6
6.2
+5
28
25
26
13.0
14.3
-3
(average trade and other current receivables divided by

average daily revenue*)
Accounts payable turnover (days payable outstanding)
(average current payables divided by average daily
purchases)
Inventory turnover (days inventory outstanding)
(average inventory divided by average daily cost of sales)

conclusion can only be made after the reasons that caused these changes are considered.
150
* Calculation in days. Ratio value is equal to 365 divided by days outstanding.

According to the above table, the average collection period (Days Sales Outstanding),
calculated based on the data during the last year, was 62 days, while average repayment
period for credit debts (Days Payable Outstanding) was 59 days.
151
Dell- Overview of the Financial Results
The table below gives information about the main financial results of Goldstar's activities during the entire period analyzed.
Indicator
Value, in millions dollar

2011
2012
Change
2013
Average
millions $
(col.4 -
(4-2) : 2
col.2)
5
-4,554
6
-
annual
value,
millions $
1
1. Revenue
2
61,494
3
62,071
4
56,940
7
60,168
7.4056005
2. Cost of sales
50,098
48,260
44,754
-5,344
5
-
47,704
10.667092
3.Gross profit (1-2)
11,396
13,811
12,186
790
5
6.9322569
12,464
152
4. Other income and expenses, except Finance
7,963
9,380
9,174
1,211
3
15.207836
costs
5. EBIT (3-4)
3,433
4,431
3,012
-421
2
-
8,839
3,625
12.263326
5a. EBITDA
4,403
5,367
4,156
-247
5
-
4,642
5.6098114
6. depriciation and interest charges
1,216
1,296
1,514
298
9
24.506578
1,342
7. Income tax expense (from continuing
-715
-748
-469
246
9
-
-644
operations)
8. Profit (loss) from continuing operations
34.405594
2,635
3,492
2,372
-263
(5+6+7)
9. Profit (loss) from discontinued operations
10. Profit (loss) (8+9)
4
-
2,833
9.9810246
2,635
3,492
2,372
-263
2,833
9.9810246
11. Other comprehensive income
12. Comprehensive income (10+11)
2,635
3,492
2,372
-263
2,833
153
9.9810246
7
154
analyzed, the revenue reduced appreciably (by $4,554 millions, or by 7.40%). The change
in revenue is demonstrated on the chart. For the last year, the gross profit was equal to $
12,186 millions. For the 3 years, it was observed that there was a significant lowering in
the gross profit, which showed $,790 millions.
70,000
60,000
50,000
40,000
12. Comprehensive
income (10+11)
30,000
20,000
10,000
0
2011
2012
2013
155
Profitability Ratios
Value in
Change
%
2011
2012
2013
(col.4 -
1
1. Gross margin.
2. Return on sales (operating
2
18.53%
10.70%
3
22.25%
15.30%
4
21.40%
14.80%
col.2)
5
2.87%
4.10%
margin).
3. Profit margin.
5.45%
6.83%
4.99%
-0.46%
All three profitability ratios given in the table have positive values during the last year, as
the company gained gross profit and comprehensive income from operational and
financial activity for this period. The gross margin was equal to 21.40% during the period
from 01.01.2013 to 31.12.2013 that is slightly greater (2.87%) than the gross margin for
the year 2011.
more important from a comparative analyses point of view. The return on sales was
14.8% per annum for the year 2013, while the profit margin was 4.99% per annum.
156
50.00%
45.00%
40.00%
35.00%
30.00%
profit marjin
25.00%
Return on sale
20.00%
Gross margin
15.00%
10.00%
5.00%
0.00%
2011
1
Return on equity (ROE)
2011
2
43.14%
2012
2012
3
47.55%
2013
4
26.60%
2013
5
-16.54%
6
ROE is calculated by taking a year's worth of
earnings (net profit) and dividing them by the
average shareholder equity for that period, and is
expressed as a percentage. It is one of the most
important financial ratios and profitability
metrics. Acceptable value: no less than 12%.
157
Return on assets (ROA)
8.68%
9.52%
5.98%
-2.70%
ROA is calculated by dividing net income by

total assets, and displayed as a percentage.
Acceptable value: no less than 6%.
158
The return on assets amounted to 26.60% for the period 01.01.201031.12.2013. For the
the period.
The change in the main rates of return on assets and equity of Goldstar is demonstrated in
the following chart for the period reviewed (from 31 December, 2007 to 31 December,
2010).
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
ROE
20.00%
ROA
15.00%
10.00%
5.00%
0.00%
2011
2012
2013
159
Analysis of the Business Activity (Turnover Ratios)

In the following table, the calculated rates of turnover of assets and liabilities describe
how fast prepaid assets and liabilities to suppliers, contractors and staff are effected.
Turnover ratios have strong industry specifics and depend on activity. This is why an
absolute value of the ratios does not permit making a qualitative assessment. When assets
turnover ratios are analyzed, an increase in ratios (i.e. velocity of circulation) and a
reduction in circulation days are deemed to be positive dynamics. There is no welldefined interaction for accounts payable and capital turnover. In any case, an accurate
conclusion can only be made after the reasons that caused these changes are considered.
Turnover ratio
Value, days
Rati
Ratio
Change,
2013
days
201
201
201
2011
(col.4 col.2)
1
Receivables turnover (days sales outstanding)
60
58
63
6.1
5.8
+4
74
89
93
4.9
3.9
+5
9.4
10.6
11
38.5
32.4
-3
(average trade and other current receivables divided by

average daily revenue*)
Accounts payable turnover (days payable outstanding)
(average current payables divided by average daily
purchases)
Inventory turnover (days inventory outstanding)
(average inventory divided by average daily cost of sales)
160
* Calculation in days. Ratio value is equal to 365 divided by days outstanding. According
to the above table, the average collection period (Days Sales Outstanding), calculated
based on the data during the last year, was 63 days, while average repayment period for
credit debts (Days Payable Outstanding) was 93 days.
161
Conclusion
Key ratio summary of HP
analyzed, the revenue reduced appreciably (by $14,947 millions, or by 11.74%). The
change in revenue is demonstrated on the chart. For the last year, the gross profit was
equal to $ 25,918 millions. For the 3 years, it was observed that there was a significant
lowering in the gross profit, which showed $3,798 millions.
All three profitability ratios have given positive values during the last year, as the
company gained gross profit and comprehensive income from operational and financial
activity for this period. The gross margin was equal to 23.08% during the period from
01.01.2013 to 31.12.2013, that is slightly lower (-0.27%) than the gross margin for the
year 2011.
more important from a comparative analyses point of view. The return on sales was 0.15
or 14.8% per annum for the year 2013, while the profit margin was 5.8% per annum.
The return on assets amounted to 6.16X% for the period 01.01.201031.12.2013. For the
last 3years, it was verified that there was an appreciable decrease in the return on assets,
the period.
162
The average collection period (Days Sales Outstanding), calculated based on the data
during the last year, was 62 days, while average repayment period for credit debts (Days
Payable Outstanding) was 59 days.
Key ratio summary of DELL

analyzed, the revenue reduced appreciably (by $4,554 millions, or by 7.40%). The change
in revenue is demonstrated on the chart. For the last year, the gross profit was equal to $
12,186 millions. For the 3 years, it was observed that there was a significant lowering in
the gross profit, which showed $,790 millions.
All three profitability ratios have given positive values during the last year, as the
company gained gross profit and comprehensive income from operational and financial
activity for this period. The gross margin was equal to 21.40% during the period from
01.01.2013 to 31.12.2013 that is slightly greater (2.87%) than the gross margin for the
year 2011.
more important from a comparative analyses point of view. The return on sales was
14.8% per annum for the year 2013, while the profit margin was 4.99% per annum.
The return on assets amounted to 26.60% for the period 01.01.201031.12.2013. For the
the period.
163
, the calculated rates of turnover of assets and liabilities describe how fast prepaid assets
and liabilities to suppliers, contractors and staff are effected. Turnover ratios have strong
industry specifics and depend on activity. This is why an absolute value of the ratios does
not permit making a qualitative assessment. When assets turnover ratios are analyzed, an
increase in ratios (i.e. velocity of circulation) and a reduction in circulation days are
deemed to be positive dynamics. There is no well-defined interaction for accounts
payable and capital turnover. In any case, an accurate conclusion can only be made after
the reasons that caused these changes are considered.
The average collection period (Days Sales Outstanding), calculated based on the data
during the last year, was 63 days, while average repayment period for credit debts (Days
Payable Outstanding) was 93 days
164
BIBLOGRAPHY
REFERERNCES
WWW.GOOGLE.COM
www.hp.com
www.dell.com
www.gurufocus.com
165

Comparativeanalysisofhpanddell 150510201143 Lva1 App6892

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Comparativeanalysisofhpanddell 150510201143 Lva1 App6892

Uploaded by

Copyright:

Available Formats

FINAL PROJECT

Institute Of Business and Information Technology University of the Punjab

Unique selling point.......................................................................................... 42

The bargaining power of suppliers.....................................................................71

Expense to sales ratios..................................................................................... 120

Coverage Ratios:............................................................................................ 146

To evaluate the performance of the company by using ratios as a yardstick

To understand the liquidity, profitability and efficiency positions of the

To evaluate and analyze various facts of the financial performance of the

To make comparisons between the ratios during different periods

NI: Net income

Customer Oriented Mission statement of Hp:

individual and organization accountability

best-in-class support and support

exible personalization capability

superior business citizenship

Customer Oriented Mission statement of dell:

increase client satisfaction

reduce how long required to present impressive products to the industry.

Hp pavilion 23fi 23-inch diagonal IPS LED backlit monitor

Hp deskjet ink advantage 2645 (All in one printer)

o Hp scanjet enterprise flow N9120 flatbed scanner

Dell has following width:

Dell has following depth:

Dell Precision t1700 mini tower workstation

Dell (Monitor) Deals

Dell s.w.o.t analysis

Obtain more patents through acquisitions

Strengthen their presence in emerging

Growing demand for smart

Profit margin decline on

Tablet market growth

SWOT Analysis Hewlett Packard

Successful Strategic Acquisitions:

seemingly obvious segments, there remains room for improvement. The

Expanding portfolio of imaging and printing solutions:

Successful Strategic Acquisitions:

and customers of the company.

Target market of Dell:

Fun colors and design.

AGP Card LAN,

Plus Battery Backup,

Processor type: core

Age 17-25 college

from a young age.

Age group varies

Durable, long lasting

Inbuilt VGA port

Age group 18-45

AGP Card LAN,

Low budget laptops

Age 18-65 years

Durable ,dynamic and

Target market of Hp:

Good sound system

Processor speed:2.4 ghz

Processor type: intel core

Age group 18-

Operating system: dos

Operating system: dos

Processor type: intel Core

intelhd graphics 4000

portability and ease

Dell competitive advantage