Strategic Ppt

8/3/2019 Strategic Ppt

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STRATEGIC ANALYSIS

ON


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INTRODUCTION

Founded in 1984 by Michael Dell

No.1 PC provider in the U.S. and No.2 worldwide

Based in Round Rock, Texas

Employs more than 82,700 people worldwide

Grew during the 1980s and 1990s to become a brand

Direct Business Model is the foundation for Dells business

Dell maintains a consistent focus on offering the best value

and customer experience

Dell is a global company committed to its customers and

employees


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MISSION

To provide customers with superb value, high

quality, relevant technology, customized systems,

superior service, support ,products and services thatare easy to purchase and use.


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Through effective and strategic community

partnership, dell supports educationalservices programs that address the critical

and most basic technology access needs of its

neighbours in Dell communities prerequisite

to success in digital world.


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Dell's success is built on a foundation of personal and professional integrity.

We hold ourselves to standards of ethical behavior that go well beyond legal

minimums.

We never compromise these standards and we will never ask any member of the

Dell team to do so either.

We owe this to our customers, suppliers, shareholders and other stakeholders.

We owe it to ourselves because success without integrity is essentially

meaningless


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VALUE CHAIN ANALYSIS


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FIRM INFRASTRUCTURE:

The main strength of Dell is in its inventory management.

It sells through direct model

It then places orders with vendors & proceeds on the assembly.

It pays to the suppliers only after 36 days

Thus its cash conversion ratio is negative

OPERATIONS:

Outsources all its component manufacturing like motherboards & entire production

chain for notebook PCs

Does not outsource the final configuration & keeps control over

the production supply chains.


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INBOUND LOGISTICS:

Dell follows build to order and just in time policies

Thus the inventory remains in the suppliers books till Dell puts the order.

Dells direct selling model depends critically on lead time management

Therefore would not leave the company with overage and underage of components.

MARKETING SALES:

Dell has eliminated from its value chain the intermediaries, who would have

charged a 20 -30 margin.

Even though the company assembles 80000 PCs a day, it does not have any

warehouse

The assembly factories hold inventories for maximum of two days while the entire

operation inventory is a maximum of 72days.


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STRENGTH

No inventory buildup Quality product and service

Whole world focus

Customer service

Cost efficiency

Direct sell model=customization + fast+ delivery

+ low cost

First mover advantage E-commerce capabilities: www.dell.com

Build to order manufacturing process

Product design + after sales service


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WEAKNESS

No proprietary technology

High dependency on component suppliers

Occasional product recall.

Unable to switch supply dues to the lack of large suppliers in the World High attrition rates among visitors to Dell.com

No physical presence.

Slow in introducing fancy features

Lack of innovation


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PPURTUNITIES

Network-internet, intranet and extranet

Developing nations market

Low costs and growing advanced technology

Growth in business, education and government markets

global wide access to customers and market.

Expansion

Increasing income of consumers

Globalization


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THREATS

Competition

Currency fluctuation in countries outside the US

Political instability

Tariff trade barriers

Recession

Declining sales


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P E S T

Dell being an integral part of U.S economy has also been greatly affected by

changes and has not been able to counter them.

Dell came under significant pressure from environmental groups across the USto assume responsibility for its old products

This experience sensitized company officials to the risks and opportunities of

state and federal e-waste regulations and the need to take proactive steps against

them.


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P E S THigh tariffs on IT products makes Dell

difficult to enter other markets apart from

USA

Since most of the population of the world is

young and adaptive to change in technology,dell aimed to manufacture its products which

are more user friendly and can be afforded

by young professionals

Purchasing power of working populationsaw an increase over the past few decades.


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P E S TIncrease of younger population and working population have led to the increase

of the use of computers.

A technological revolution has been around the corner, people have become

techsavy.

This have resulted in the increase in the demand for computers .

These days people have time constrains and as a result of it they prefer to buy

the product online ,which has given Dell an advantage over others because of

dell.com


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P E S T By increasing product line, Dell is able to provide advanced technology

products to the customers due to technological advancement.

One of the most important affects of technological changes that have led to the

increase of the demand is their Direct Business Model

They have excellent ecommerce capabilities, which can be seen with the success

of the dell.com .

Their recent products like New Power Edge Servers, New Enterprise

Computing Portfolio, Innovation Aids Recovery, Ultra-Thin Laptop, Adamo.


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PORTERS 5 FORCES MODEL


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Threat of New Entrants: MODERATE Buyer loyalty

Brand name

Low price

Award winning customer service

Customization

Rivalry: HIGH Price War

Decreasing profitability

Low differentiation

Threat of Substitutes: LOW Strong presence of PCs throughout society

One computer for every three people in the U.S.

Customer service

Direct Business Model


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Bargaining Power of Buyer: High Highly price sensitive

The cost leader has high market share which leads to high bargaining power

relative to its suppliers

Reliability and customer service become important factors.

Dells products are very reliable and customer service is outstanding.

Bargaining power of supplier: HighHighly dependent on suppliers

Switching them will be costly


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Corporate strategy:

Dells corporate strategy is to provide high technology quality products andservices through customization including cost cutting.

Business strategy:

Dell's business strategy combines its direct customer model with a highly

efficient manufacturing and supply chain management organization and anemphasis on standards based technologies.

Functional strategy:

Cost leader ship through direct sell model. In direct sales model it sells directly

to customers


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Should look for Alliance-mergers and

acquisitions that would bring synergic

benefits for the company

Reduce the attrition rate by Converting

visitors into customers(people who visit

the Dell site)

Focus on developing nations

Physical presence of Service centers

would add value to their customer service

AS A MANAGER


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THANK YOU.

KARAN PODDAR-283099

SHOBNA PATEL-283100

TORAL PATEL-283101PAWAN PUNJABI-283102

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