External Environment Analysis of Dell.
Political factors have a major impact on businesses operating in the international environment. Global players have to deal with significant political pressures. Policies related to foreign businesses, tax regulations and varying political environment all have a direct impact on these businesses and their revenue. Apart from it, political stability is a sign of economic stability and a flourishing market.
Political instability is always bad for business. In the recent years, EU has been targeting US businesses in several areas. In China, the situation has generally remained peaceful, still diplomatic relationships between US and China are not taking a satisfactory turn. It could affect the US brands like Dell operating in China.
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In such conditions, the sales of the international brands can fall. Economic conditions affect several things including operational costs which can grow high in such conditions. A large number of companies were forced globally to reduce their number of employees because of the global recession.
Their profits from international sales have dropped. Dell has also not remained unaffected. The entry of smart phones and now smart watches into the industry is likewise a key driver. The cross category competition became increasingly more intense and serious with the advancements in the smart phone and smart watch industry. These devices also offer access to the web. Smart phones designs have greatly enhanced and now are sleek while offering compatible usage, Smart watches likewise have taken the industry by storm and are likewise designed well and offer compatible usage The costs of these smart phones are also low in contrast to the costs associated with PC and laptops, While smart watches are relatively new and exclusive costing more.
Thus creating a shift in consumers switching to smart phones and watches from laptops and desktops. The smart watches and smart phones are offering the features of the internet at a subsidized rate. These driving forces have negative ramifications on the industry globally. Dell are known to produce quality products with high specifications and utilized and have used the Processor speed and RAM as the some of the main driving forces in the industry that generated profit. However these are no longer considered the driving forces as cloud computing has now been introduced.
The differentiation is not much in the PC industry as most of the players are keeping up and staying aware with the ongoing technological advancement. The idea of convergence has been acting as a key driver in the industry throughout its history. Prior to this, transistors had been used in computer hardware and they were replaced with microprocessors. Today these processors are gradually getting replaced with cloud computing. Similarly smart phones, smart watches and mobile computing offer the same services as offered by the PCs and laptops.
Aside from these the factors influencing the experience curve and scale effects, profitability ratios like return of assets are also considered to be driving forces for the industry. The learning curve affects the new entrants and decides the attractiveness of the industry while economies of scale determine the cost of production.
If these are easier to achieve, the industry becomes more attractive. In the PC industry, the learning effect is high and hence it is difficult for the new entrants to achieve economies of scale. Dell-Based Security Division The first scenario is that Dell would build a big security division as evident with the ever growing online threats. Dell Ireland, 1. Smart Watch market penetration Dell is planning to and will try and have an influence in the smart watch category starting in and This advantage undoubtedly will give them a steady share in the early stages of a category.
Dell is blessed by their developers and always have been as they are know to design quality products. Developers for the Dell Watch will make or break the product. We accept, for the smart watch to go mainstream, it will take an ecosystem and Dell has history in their corner in regards to building for a category. Key assumptions for this scenario: Rather, they decide to simply maintain course and focus on Analog watch products.
Smart watch platforms become fragmented. Should some higher end watch brands decide to make smart watches, they choose to attempt and create their own platform in order to maintain stronger differentiation and avoid a race to the bottom. Google or any other smart watch platform OS like Tizen for Samsung succeeds at building a smart watch ecosystem for developers and core services. Android Wear or Apple Watch Dominates Market Share Another conceivable scenario is the smart watch category shapes up very much like the smart phone category. While Android Wear, or another third party licensable smart watch OS, provides the software platform to the vast majority of hardware companies making smart watches.
In this scenario, the vast majority of Chinese and Hong Kong produced smart watches adopt Android Wear or something else and then flood the market with very low cost smart watches. While there is still no definitive price for the Dell smart watch, it is unlikely they will compete with the more 'Exclusive prices' Android Wear, or another third party, becomes the standard smart watch platform for the vast majority of watch developers and technology organisations starting to make watches.
Watch makers standardise on a smart watch platform and there is little to no smart watch platform fragmentation. Google or a third party standard platform is aggressively competitive with Dell's. It seems a safe assumption Dell should have the advantage in the early phases of the smart watch category.
External and Internal analysis of Dell computers | Guilherme Steffen - www.newyorkethnicfood.com
Like the Dell notebooks, they have a five to seven year advantage on the competition. It is logical that Dell maintains a favourable position in this sector for at least two years, if not longer, and we feel scenario 1 is the manner in which the market will look for at least the first three to five years if not longer. Etherington, While there is a solid case to be made for scenario 2 simply because it is logical the competition will need to battle at some point with Dell and will have to pick a platform to use or create their own and the market may likely flood with low cost Android or another outsider company smart watches.
It is unclear if these products will stick or be competitive. A mix or blend of both scenarios is conceivable also. The industry is dominated by large players that has most of the market share and are benefited of economics of scale as well as brand awareness. The industry also requires of big investments in research and development of new products.
Customers requires new technologies once they are made available by other competitors. Larger organizations and governments that buy in large quantities has power over price, quality and the service. The industry is highly price sensitive, different strategies are being implement by companies in order to gain competitive advantage.
The company has long-term relationships with multiple suppliers in order to get lower prices. The company might switch suppliers if they can find a better product for the same or lower price.
Environmental Analysis of Dell Organization Essay
Microsoft has bargain power over dell once they are the only software supplier. Sony, Toshiba and Fujitsu also has a good market share. Customers continues to enjoy of improvement in their products since these companies will keep on trying to get on each other. Sharplin, Dell operates in the computer industry. The industry it is considered an oligopolistic industry and it is in a decline stage of life, indicating a slow growth and with big companies leading the market. Lodz, Poland For Asia-Pacific: DELL was recently owned This method only when the customer passes a full range of possibilities radically cuts the inventory an order.
This provokes a high when it comes to equipping its costs, as well as retailing costs. But it goes way beyond company. Strategic partnerships within Thanks to the analysis of all the the industry: Then, the company Alienware, specialized in the transfers its low cost value to production of high the customer, making its performances computers products affordable. Direct Sales Model Valuable? This sales model is rare within the computer industry. This model is very costly to imitate, as potential imitators would have to reorganize their whole processes to succeed.
Direct sales model cannot be substituted by an equivalent strategic capability, as it is the more direct way to reach the consumers. Doing just-in-time inventories radically cuts costs when it comes to store computer components, as DELL buys only the needed components. This competency is rare within the industry, as it comes from the way the company was launched at its beginning.
As for the direct sales model, this specific competency would involve high capitals to be copied by competitors. Such a stock management process is hardly substitutable by other companies. Customer Relationship Management Valuable?
This competency can be substituted by investing more in communication and marketing in order to have a good reputation. Customers-related data can be gathered by other ways such as market researches. Good market segmentation Valuable? The fact that DELL bases on its knowledge of the market to adapt its acquisitions of specialized companies is valuable, as it allows the company to compete on different market segments. Other competitors may as well play on other industries such as Lenovo, which also produces televisions.
With the development of smartphones, all the products within the computer industry face the threat of being substituted by products that are more and more powerful.
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Strategic partnerships within the industry Valuable? Having good partners within the computer industry insures that DELL can minimize the costs of its components, and can co-create solutions. Competitors such as Apple also have big partners networks. In this oligopolistic industry, strategic partnerships are difficult to conclude, and many key suppliers are already partners with computer manufacturers.
This competency can be substituted by a high influence on components manufacturers for example. Apple, by developing its supply chain, acts like a monopsony one buyer, many sellers and can use this influence on suppliers to dictate its own terms. DELL representatives now have a dialogue with suggestions makers, to maximize the benefits of using such a collaborative system. DELL has understood very early that knowledge transfers inside the company is as important as gathering knowledge from external sources such as customers.
Based on this idea, the company launched in an internal social media, EmployeeStorm, following the launch of IdeaStorm. Employees can vote for the best suggestions made by their colleagues, to see these ideas implemented in the future. The company also fosters good practices of knowledge sharing between its teams and different business units. How we tested it: More technology of software and hardware will be available in the futurw with less cost.
This could be established in the long run as they:. Increased revenues by penetrating the Chinese market benefiting from low costs. Increase diversity in portfolio by expanding product offering and investing in a new industry within the technological sector. Manufacture some of its supplies, decreasing reliance on suppliers. Getting in touch with Dells culture: Retrieved February 17th, , from http: Retrieved on February 17th, , from http: Business Week, , Issue Creating a Mission and Vision Statement.
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