Environmental Analysis Paper - Dell

4021 Words17 Pages
Part 1 Dell Computers opened for business in 1984 by Michael Dell with a very simple idea. It was that personal computers could be manufactured and sold directly to the end user. By doing this the company could build to suit for customers and meet their specific needs. Dell’s direct mode presents two advantages. First, it reduces marketing and sales cost by doing away with the middle man and markups of distributors and retailers. Secondly, their custom built orders reduces inventory costs and risks of inventories becoming obsolete. The direct mode is why Dell has achieved its stellar status. The strategic model enables them to work together with customers directly presenting them with fast service and great prices. After analyzing Dell’s value chain it is easy to see they are unmatched in efficiency and product offerings. Their competitive advantage is durable, but as competitors prices become on par with theirs, Dell will have to make some changes to stay ahead of the game. Customer service is a weak point. Some customers are so irate after dealing with Dell’s call centers overseas, that they have gone so far as to create websites such as ihatedell.com and a forum at ihatedell.net to share horror stories. Dell continually earns nearly 50 billion in revenue and around 10 billion in profit. Laptop sales are expected to grow drastically over the next few years and desktop sales are expected to decline. As the world becomes more mobile Dell continues to serve customers their customized PCs, but needs to address a couple shortcomings. Part 2 Dell does a great job in identifying new product market opportunities. They have one of the leanest and cost effective manufacturing processes of any computer and computer related manufacturer. This makes them the computer markets low cost leader; no other company can build and sell for a better price to the consumer.
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