Opportunities: Network-internet, intranet and extranet: This is very useful for large businesses and it would be very beneficial for Dell. Having internal and external communications within a large company is essential so therefore having an internet network could bring high sales into Dell.
Strong potential market in Europe as the business is growing worldwide, it would be more ideal for Dell to concentrate in reaching high sales in Europe because it would potentially get more sales than another continent such as Africa.
It would be very advisable for Dell to take a pure advantage of China and India because of the low costs and the advanced technology in Asia. Dell is still a Growing business, as it has much more to offer in the future for likes of education and other businesses. Kevin Rollins replaced Michael Dell in 2004 as Dell's Chief Executive Officer. Dell remained the company's Chairman. Despite founder Dell's massive success, new blood and a change in management thinking could lead the company into a new, even more profitable period.
Threats: The biggest threat that Dell has is the competition between dell and other large companies. As Dell is a Computer maker and not a manufacturer, all other brands such as HP or Gateway can also source the same suppliers as Dell from Far Eastern nations where labour costs remain low. Other competitors can source similar or equal parts from the same countries or suppliers as there is nothing stopping dell’s competitors and also there is nothing stopping Dell. Some competitors in the market share more than Dell and have better prices than Dell including similar or same components in the computers. Although Dell is an international company and has more time on business operations, than other large companies, Dell is exposed to fluctuations in the World currency markets. Even if it is a very organised company, orders do have to be placed some time ahead due to their size or value of a products or order as if there are any changes in rates, this could leave the company uncovered to some loses in parts of its control and commandment in the supply chain.
PEST Analysis of Dell:
Political
This includes the government’s set of laws and lawful issues shaping the conditions under which companies have to operate.
The computer Dell has to face certain restraints and problems that can arise in countries where political stability is not guaranteed, no matter whether where the warehouses operate production facilities or if Dell does business with a particular country through exports. In other countries that Dell does business with; still have respective, restrictive and qualified policies which are maintained to protect domestic manufacturers and production. Some rules often hold back and delay foreign companies such as Dell from entering into these markets.
Economical
Dell and the computer industry expect a growth of approximately 10% over the next few years; as this growth is effected by the economic situation in a specific country, having an impact on the purchasing control of potential customers. Additionally, changing in inflation rates and currency fluctuation also determine the profitability of a company.
Social:
Dell is committed to using its unique direct business model to make technology more affordable and accessible to people and institutions around the world so that they can take advantage of the tremendous economic and social benefits of more pervasive technology. To do this, Dell is: Reaching out to customers around the world, using its customer direct model to bring affordable technology to new and emerging markets. Growing its global employment to tap diverse ideas and skills, increase its understanding of global customer needs, and bring desirable technology jobs to developing economies, and developing a global supplier network to improve the performance and lower the cost of its systems.
The national demand especially in the UK is high for computers as it is dependent on the educational level existing in a specific country. The higher the educational standard, the higher is the demand for computers it is. Also, PC’s are getting more interfered in everyone’s daily life especially in the UK. These days, young children are already getting used of using computers as they start using them at a very young age. Thus means that the next generation will hardly live and work without a computer in the future as this means that there are more surprises to come for Dell and its competitors in terms of technology and more people getting habituated of using a computer.
Technological
This is a great advantage to Dell as in other businesses that don’t include the industry of computer do not have this advantage. The advantage is that there is hardly any industry or market that is known to grow faster and develop faster than the technological development in the computer industry.
Environmental: Dell increased product recovered from customers for reuse or recycling, as measured by weight, by 72 percent compared to 2005 results. Dell has set a target to recover 125 million kilograms cumulatively by the end of 2009, nearly three times as much as Dell recovered this year. Dell committed to launch customer product recovery services in Latin America and China this year. The planned launch of these additional asset recovery programs will help enable the company to meet its goals. "Dell is committed to making product recovery as convenient and easy as product purchase for customers while we grow our network of responsible product recovery vendors," said Jake Player, senior manager of asset recovery services for Dell.
Earlier this year, Dell issued a new chemical-use policy outlining the company's precautionary approach to help identify and eliminate substances of concern from its products. The policy includes a commitment to phase out the use of all brominated flame retardants in products. To demonstrate this commitment, Dell is currently chairing an industry working group through the International Electronic Manufacturing Initiative (iNEMI) to identify safe, reliable substitutes for the use of tetrabromobisphenol-A (TBBP-A) in printed circuit boards. In addition, Dell plans to expand its existing ban on the use of brominated flame retardants in desktop, notebook, and server plastic parts to include all Dell products and peripherals developed after June 1, 2006. Dell also reaffirmed its commitment to meet the requirements of the RoHS directive on products sold worldwide and to meet this July's deadline of the directive for products sold in the European Union. Meanwhile, in 2005 Dell exceeded its goal of shipping 3 million RoHS-compliant, lead-free desktop motherboards by more than 180 percent. Dell will continue to enable power-management features on many desktop and notebook products, in an effort to increase energy-conservation options for customers. Dell began to offer its PowerEdge and PowerEdge SC servers featuring processors with Enhanced Intel® SpeedStep® (EIST) capability in certain configurations to help lower overall power consumption in 2005. Dell estimates that 7 percent of PowerEdge and PowerEdge SC servers shipped in 2006 were configured with EIST features enabled, providing customers with the potential to save an average of 25 percent in power consumption. "We continue to meet goals on eliminating the use of substances of concern from our product designs and increasing energy efficiency of our products while maintaining our high standards of reliability and product safety," said Don Brown, senior manager of environmental affairs for Dell.
Legal: Dell's privacy policy processes and practices demonstrate our respect for our customers' and employees' privacy. In addition to complying with legal and regulatory requirements, Dell's customer privacy practices are designed to deliver an optimum customer experience. To develop awareness and encourage compliance with Dell's privacy practices, all Dell employees are required to successfully complete privacy compliance training. Privacy initiatives and governance are driven by the Privacy and Information Protection Office, which is part of Dell's Ethics and Compliance Office. Dell proudly displays the Better Business Bureau (BBB) Online Privacy Seal on domestic Web sites, certifying adherence to industry-standard privacy practices. To help promote public awareness of data privacy and security best practices, Dell is a sponsor of programs such as the GetNetWise coalition and the Get Safe Online campaign.
Lawsuit Problem on May 2007: On May 2007, the New York Attorney General Andrew Cuomo filed a lawsuit against Dell for "false advertising and deceptive business practices, including offering misleading financing, and failing to honour rebates, warranties and service contracts." Dell spokesman Bob Pearson portrayed the lawsuit as based on only a small portion of Dell's customers and as in no way reflecting the way the company treats its customers. Dell's hardware-warranty contract says that customers must troubleshoot over the phone — including possibly opening the computer — before Dell will send a technical service provider to replace a part.
The Audience or Consumer Group of Dell: Dell has a very wide range of consumer groups, men and women of age over 18 can be in the consumer group of Dell. Even Parents buy Dell computers for their children because they know the great advantages and latest technology computers that Dell sells at a reasonable price.
Marketing Mix of Dell:
Price: as the prices suggest, Dell is stressing its cost per OC or accessory as very competitive. A comparison of the Dell computers with other manufacturers deserves a closer look. Most small businesses looking for a decent, high-capacity computers and computer accessories would find the Dell a compelling buy.
Besides a reasonable cost-per-port, Dell has its reputation going for it as well. Many small businesses and medium enterprises are already customers of Dell, and this will help their entry into the networking market that much easier. By positioning its switches as a useful peripheral to computer buyers, the manufacturer should realize decent sales and a sparked interest in networking supplies among its customers. The switches offer comparatively simple technology, which results in a lower price point. By negating advanced switching features, Dell may lose out to other manufacturers in that its product line has certain limitations of usefulness to a customer looking for a connectivity solution. In effect, Dell's sales methods are largely experimental and run against the traditional methods of switch sales techniques. In offering the products as a peripheral instead of a well thought-out and planned purchase, Dell's approach seems all the more suspect. And yet, Dell has a lot going for it with this new lineup, and may succeed in a more unique way than to its customers.
Product: Dell is attempting to make its computers and accessories products an add-on commodity. The difficulty in this type of movement is that networking products are not regarded as such. In effect, Dell must realise that its networking products is unlike the computer buyers. Networking administrators do not purchase networking products as an add-on; they buy whatever product fits the job, according to present needs with service agreements, reliability, scalability, reputation, quality, and technical assistance as major selling points. Dell does present an interesting issue to its competition, namely to one of its products, which are switches, may be able to be sold as a computer peripheral to a decent amount of customers. In fact, the older people who are at the receiving end of this marketing effort are necessarily looking to build a merely looking to connect a multitude of PC's and peripherals at a decent price and a fast speed. One of Dell’s products, the PowerConnect line will thus likely fit the bill for many of Dell's existing and potential customers. Dell has an advantage in that its direct sales approach allows it to drop prices while reaping decent margins, thus allowing Dell to compete on price alone if need be. Therefore, Dell really doesn't have to sell a multitude of switches or individual accessories every week in order to gain profits, and this alone will keep it in the networking market and a minor player to boot. Dell does sell all different types of products at affordable prices such as Laptops, Desktops, PC accessories, TV monitors, printers, faxes, scanners, speakers, keyboards, memory sticks, hard drives and much more at a very high standard of quality Products at very reasonable prices.
Place: Dell does not have any shops as it is an online business which has gone international and is selling all over the world. It is a good advantage of Dell only selling online which cuts their costs of having shops. Also, Dell does have big warehouses and departments in countries around the world so that it doesn’t cost its customers a lot more money for delivery. As Dell is a large business but is also a growing business, as Dell is still building Warehouses in many other countries around the World in certain parts of Europe and Australia so that customers in far continents would not have to pay such a big amount of costs in deliveries. However, Dell is planning to open large stores as On July 26, 2006, Dell Inc. opened a full store in Northpark Centre in Dallas, Texas. It planned to operate the 3,000-square-foot Dallas outlet seven days a week and to display about 36 models, including PCs and televisions. But customers cannot walk out of this store with products. Instead, they order online or by telephone from the store and await delivery. Dell Inc plans to use the Dallas store to house about three times as many products as it displays in more than 160 kiosks in malls and airports in the United States of America. In addition to showcasing products, the store also supports onsite warranties or non warranty service ("Dell on Call"). Services offered include repairing computer video-cards and removing spyware from hard drives.
Promotion: Dell is such a large company, that they can afford to promote through different types of media advertising. Dell promote through TV adverts, billboards magazines, newspapers, Radio and on the Internet. I think that the most effective one is TV advertising as it may be expensive, but the promotion or advert is reached to a wider group of customers or audience. On Dell’s website, there are all sorts of promotions and offers to its customers; all from the Website of Dell as current certain promotion offers that Dell offers to its customers are:
Available Special Offers for Monitors
Wide views for small prices!
Save up to 25% on a selection of Dell Monitors. Ends 27/06/2007.
Available Special Offers for Dell Accessories
Free shipping when your Electronics & Accessories order exceeds £85.11(excl. VAT)
Offer ends 31/12/2007
Save 25% on Creative Zen V MP3 Players
Offer valid while supplies last. Ends 12/06/2007.
Indispensable Mobile Protection for your notebook
Save 20% on all Notebook Carry Cases. The discount is already included in the stated prices. Ends 27/06/2007.
Wireless connection - effortless discount.
Save 15% on Belkin Wireless Products. The discount is already included in the stated prices. Ends 27/06/2007.
Enhance your gaming experience with Dell
Save 15% on Games & Gaming Accessories. The discount is already included in the stated prices. Ends 27/06/2007.
Protect your investment in a smart way
Save 20% on all Surge Protectors. The discount is already included in the stated prices. Ends 27/06/2007.
Archive your data while saving 15% on all Hard Drives
The discount is already included in the stated prices. Ends 27/06/2007.
Boston matrix: The Boston matrix is a chart created by the Boston Consulting Group in 1970 to help corporations analyze their business units or product lines, and decide where to allocate cash. It was popular for two decades, and is still used as an analytical tool.
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Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible. They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
-Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company. They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.
-Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.
-Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom.
Boston Matrix of Dell
Question Mark: Televisions are not Dell’s main product for success, although they are a good quality, television competitors such as Sony, Samsung or Phillips are way ahead of dell in televisions and therefore all customers prefer to have a Sony or a Samsung rather than having a Dell television. Dell is new into the televisions market so therefore it will take some time in order to gain some customers to buy televisions as gradually this market could go better for Dell or could go worse too as Sony and Samsung are mainly increasing in terms of market share and customer groups.
Star: Desktops or laptops and Printers: These three products have been a great success in Dell and will also carry on with growing very fast as more and more people are habituated of using desktops and laptops, even in large companies are all using computers and networks as the company’s systems for training purposes and many other aspects which is why Dell’s main products (desktops and laptops) are reaching such high sales.
Dog: Windows XP or Windows Vista: These 2 pieces software are in the low market and Dell does not depend on these two products to reach its high sales as also, these 2 products have been around for a long time and they are growing gradually in the market share which means that in the future, especially Windows vista will provide Dell more sales than the current situation.
Cash cow: Printers, Screens, laptops and desktops: These 4 items are Dell’s main products that keep Dell going as thousands of these products are sold weekly to lots of different parts of the world as these 4 products are still growing in its market share and are giving Dell very high sales as in the future, it could be more sales than the current situation.
Product life cycle: The Product Life Cycle refers to the succession of stages a product goes through. Product Life Cycle Management is the succession of strategies used by management as a product goes through its life cycle.
The product lifecycle goes through many phases and involves many professional disciplines and requires many skills, tools and processes. Product life cycle (PLC) is to do with the life of a product in the market with respect to business/commercial costs and sales measures; whereas Product Lifecycle Management (PLM) is more to do with managing descriptions and properties of a product through its development and useful life, mainly from a business/engineering point of view.
Dell’s product Life Cycle:
Development: Televisions or screens: These products are still developing, Dell just needs to get loyal customers in order to buy these sorts of televisions, and Dell also has to find a way of breaking into the customers of its competitors such as Sony or Samsung.
Introduction: Windows Vista: This was just released on February 2007 as it is the update of Windows XP and provides many more features in the software compared to Windows XP, although it is an expensive software, Dell send this software as a deal with a computer which makes its customers very happy as this software will also grow gradually as with the XP also grew Gradually.
Growth: Dual processor
Maturity: Laptop
Saturation: Desktop
Decline: Windows 98, Windows 2000 Windows 2002 and Windows XP: These operating systems are no longer on Dell’s computers as the only operating system that run through Dell’s computers is the new operating piece of software or operating system which is the Windows Vista.
Lesson(s) learnt: Start and Spend little money when introductory of the company and introductory of a product, more customer complaints and more risks increase when Dell started to sell product for home and Home entertainment products. This is because of certain customers not liking the product that they have bought or of a technical feature that wouldn’t be working properly, it would be harder for Dell to deal with individual customers rather than other businesses such as colleges or schools.
