We used the Porter’s five forces model to determine the impact on production. POM 345 UNIVERSITY OF MASSACHUSETTS DARTMOUTH Jennifer hammond Tahmina Uddin PRODUCT DEVELOPMENT AT DELL COMPUTER CORPORATION Case Study Michael Dell is the founder of Dell Company who first started the company at the University of Texas-Austin on May 3, 1984 with $1,000. Help. Watch Queue Queue. The bargaining power of buyers helps sellers assess their ability to control product prices without influence from the market (Lassar et. This case study is useful for every business analysis study. In the 1st quarter of 2009, Net Revenue fell by 23%, Large Enterprise(largest revenue stream) dropped 31%. * The industry is highly concentrated * Price war has resulted in low profit margin * Decreasing profitability Low product differentiation * Dell has shown that it can gain market share previously held by competitors, proving that Dell has a successful business strategy. There exists several substitute products and Dell consumers have a bargaining power due to these factors. Dell Case Analysis Cañizares, Janelle Micah Carmelotes, Von Chu, Lean Henrich Chua, Darlyn Grace Concepcion, Kristian Cornelio, Don Dalina, Lemuel It’s the way we do business. Bateman, T. 2010, Management: Leading & Collaborating in the Competitive World (9th ed), Dell faces significant challenges in the midst of the current economic recession. Are the three price-sensitive groups based on q9_5per as derived in Chapter 14 different in terms of each of the evaluations of Dell ... A typical conjoint analysis study involves six or seven attributes. As per an analysis by Southeastern Asset Management, share price of DELL was determined at $23.72 per share. Conclusion. 7 percent. 133 billion in 2008 to $61. * The customer is highly price sensitive. Their built-to-order method allows the consumer to pick the options they want or need in a computer, so they know exactly what they are paying for and are not forced into buying unnecessary, price-inflating add-ons. In the mind of the typical consumer, brand name recognition equates to trust in the quality of that product. environment of Dell Computer which enabled them to compete with other PC competitor. (www. In late 2005, a formal study was conducted on Fortune 1000 companies to rank consumer brand recognition. He was mainly focused to avoid the intermediaries and cut the cost of product and sell it directly to the end user in comparatively cheap rate. We Will Write a Custom Case Study SpecificallyFor You For Only $13.90/page! In 2008, Dell received 347,448 applications for entry-level positions. DELL’S WORKING CAPITAL Case Study Solution. CUSTOMER CASE STUDY DELL EMC | 1 INDUSTRY TECHNOLOGY LOCATION HOPKINTON, MASSACHUSETTS KEY CHALLENGES • Evolve data center infrastructure to support IT-as-a-service environment. Bigger brands such as Samsung, which is famous for its cell phones, LCD monitors, and TVs, also entered the Home User market with its lines of laptops. CHALLENGE . During a case study analysis, you will: If you find papers matching your topic, you … Dell Case Study . The inventions claimed in these patents and applications cover aspects of current and possible future computer system products, manufacturing processes, and related technologies which they hoped would establish barriers to entry in many product lines. However, revenue growth has slowed with FY09 revenues of $61. It has also led to a 10% reduction in average cost per unit. Get a verified writer to help you with Dell Case Study. These forces help managers analyze a market and develop an effective sales and marketing strategy. He was mainly focused to avoid the intermedia ries and cut the cost of product and sell it directly to the end user in comparatively cheap rate. Organization: Dell EMC; Solution: Streamline the discovery process for client modernization engagements, enabling the professional services organization to offer more highlevel services at lower costs; Operational challenge: Configuration management database (CMDB), application dependency mapping, and DCIM software from Device42 Inc. Dell Company is a global leader in the development and sale of computers and accessories which has effectively used these forces to evaluate its competitiveness. Technological As of Jan. 30, 2009, Dell held a worldwide portfolio of 2,253 patents and had an additional 2,514 patent applications pending. Analysis of Dell Online Introduction: 1) In July 1996, Dell Computer had launched its online website, www. In emerging markets, Dell’s strategy is to focus on providing region specific products to meet the needs of emerging markets, particularly in Brazil, Russia, India, and China (BRIC countries). Desktop PC’s, their largest product revenue stream, experienced a 12 percent decline, and in the first quarter of FY10, revenue in all of their key product lines decreased. Dell Inc. was started with a small concept of direct sell to the end consumer by Michael Dell. It is therefore clear that in the computer industry, there is a high threat of substitutes from global competitors. The competitive rivalry of the global computer industry and the technology industry in general, and therefore it is very high. They find out authentic data to draft the analysis perfectly. Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. This is due to the wide availability of a variety of computer products as well as the dynamic nature of the technology industry. ANALYSIS OF THE CURRENT ISSUES IDENTIFIED AT THE END OF THE CASE Dell’s current issues consist of globalization, change in consumer preferences and rising costs due to increasing competition. Dell is trying to meet the needs of low-cost Basic PC users with their product, the Vostro-A, in emerging markets. Dell Computer Case Study Nova Southeastern University Dell’s Success Michael Dell at the age of 19 founded Dell in 1984, a company best known for selling affordable personal computers and laptops. * No legal or governmental barriers * Cost leadership has lead to lower profitability thus allowing more of a threat of new entrants. With this reputation, Dell became committed to continually delivering those products; and in turn sought to partner with their suppliers. ” Reputational Resources Dell’s reputation for providing technologically advanced differentiated products at a low cost has made it a top PC provider, worldwide. LinkedIn. The entry into the global computer industry has many barriers especially when competing with the top global brands in this industry. These include market growth, number of market players, storage costs, fixed costs, exit and entry barriers, product differentiation and many other factors (Chaudhury & Jean 2002). He forged the trail and everyone else is just following. The company used clients to develop relationships with larger corporations who form its customer base. The global computer industry has high competitive rivalry and has many entry barriers (Porter 2002). They include threat of substitutes, bargaining power of buyers, competitive rivalry, barriers to entrants and the supplier bargaining power (Porter 2002). 1st Jan 1970 Business Reference this Disclaimer: This work has been submitted by a university student. Capabilities and Core Competencies: Diverse Product Portfolio Due to the rapid technological innovations in computer electronics and the high level of dependency of many businesses and home users, there are no clear, direct substitute products for Dell’s product portfolio. Strength One of Dell’s most clear strengths is its direct business model. Tablet market is expected to grow in double digits for the next few years and the company has a great opportunity to release new tablet models and benefit from the market growth. Microsoft is standard for all PC’s and Intel is standard for most PC’s. The challenge for Dell is to scan, monitor, forecast, and assess the elements in each segment to determine their effects on the firm (Hitt). Publicly traded on the NASDAQ, Dell has been a volatile stock over the past year with a high of $26. 2. 364 crores) in sales at the end of the 1985. * Personal computers have a strong presence throughout society. As stated earlier, sales outside the U. S. accounted for 48 percent of Net Revenue, and that percentage is expected to increase sharply in the next couple years. The report also comprises application of SWOT, PESTEL and Porter’s Five Forces Analyses on Dell , along with analysis of Dell’s marketing strategy and company’s approach towards Corporate Social Responsibility (CSR). It also has an established sales and distribution network which makes it have an edge over new market entrants. The bargaining power therefore shifts to customers from suppliers since there is high supply of computer products and low demand for the same. 7 percent. Michael Dell’s reputation is not constrained within consumer electronics industry and he is the first UN Global Advocate for Entrepreneurship. Operating costs were too high; especially as the price competition was rising due to an increasingly competitive environment. From 2007-2009, Dell had expanded its retail operations to include 24,000 outlets worldwide. Presented by: Imran Shinwari MBA (029) OUTLINES of CASE STUDY History Vision statement Mission statement Organizational structure Internal factors Competitors Conclusion www.dell.com. Global: The global segment has many opportunities for Dell. The barriers to new entrants are therefore high and Dell does not face a significant threat from new entrants into the computer products market. Changes in U. S. monetary policy as well as economic policies around the world may lead to volatile exchange rates, exposing Dell to currency risks despite its foreign currency hedging program. Technological: The technological segment is an important threat to Dell. Lastly, according to analysts at IDC, there is a major trend toward mobile computing, “Laptops will overtake desktop PCs as the dominant form of computer in 2011. 52 billion with storage, service, server networks and software and peripherals. It is not meant to provide critical analysis of the literature or information used to develop it Those two factors help to create brand loyalty. In this Use Case case study, I am going to present a case study of airport check-in system. They are HP, Acer, Lenovo, Toshiba, Apple. It's the way we interpret the world around us-- our reddit. Political/Legal: The Political/legal segment is a threat to Dell, but not as important as the economic and technological segments. Such an incident occurred in 2007 and this led to the generation of negative publicity about the company. Also, government and environmental groups have called for corporations to become more “green” and energy efficient. With 24,000 retail locations worldwide and employing 103,300, and shipping 43 million units in 2009, Dell is one of the world’s largest technological corporations. The personal PC market has grown 20% in just the last year. I choose to do the case study of Dell Computers, a case that allows the firm to develop a relationship with clients through a win-win situation. The economy’s downturn continued to weaken IT spending, as worldwide PC shipments continued to decline. They actually went to the site of the problem and fixed it themselves. Additional materials, such as the best quotations, synonyms and word definitions to make your writing easier are Marketing and Sales As covered in the core competencies section, Dell has done an incredible job of making its name known. Barriers to new entrants. In what ways is Dell’s segment growth strategy likely to succeed or fail? Analysts suggest that the small and medium business customer segment is expected to grow 4 to 7 percent in 2009 for a total available market opportunity of $68 billion. Its direct sales business model enables the company to hear directly from the customer about things they wish they could do with their computers. The analysis helps them understand SWOT and PESTLE factors clearly so that the IKEA case study can be drafted without any hassle. They ship around one hundred and forty thousand computers in a day. Dell therefore has a responsibility of ensuring that the products have satisfied customer needs through regular research on market trends. Porter’s Five Forces and their application to case study, Porter’s Five Forces are the popular strategies used to evaluate the competitiveness of a market and it is attractiveness to the new entrants. com >Dell>Topics) Financial. Service Dell continues to excel in customer service. Research on market tastes and preferences is regularly undertaken by Dell to ensure high quality products are delivered to the market. JUSTIFICATION OF THE RECOMMENDATION The intelligent measures Dell has taken thus far are attributed to their increase in research and development. Buyers have a relatively high bargaining power while suppliers have low bargaining power. * Brief summary of case study. These forces were developed by Porter to help managers analyze a market and develop an effective sales and marketing strategy. The findings are also applicable to other firms in the global computer industry. 2. Porter, M 2002, Competitive Strategy, New York, Free Press. Especially with the competition globally and Dell’s reliance on out-of-the-country sales, a more expensive dollar could be extremely detrimental to Dell’s success. 1. consumer. Threat of Substitutes Threat of substitutes is determined to be Low. This has also redesigned 33% of the business client and 5% of consumer platforms which now equates to more than 50% of Dell’s product value. They can purchase products from the many competitors if their needs are not met or if product cost does not match product quality. 3. Dell 2 Improving the Dell Computer Corporation The key issues presented in the “Dell Computer Corporation” case study is that Dell needs to align its’ identity with its’ image, and stop relying heavily on technology (Dell Case Study P. 58). HP is the largest competitor in the personal computer hardware industry with a 19. It represents the difficulty or eases which investors have entered the market for a specific product or industry. • Reduce time to … Porters Five Forces and Analysis Potential Entrants Threat of new entrants is determined to be Moderate. Dell Computer Corp. case study solution, Dell Computer Corp. case study analysis, Subjects Covered Accounting procedures Exchange rates Financial statements Hedging by Peter Tufano, Jonathan S. Headley Source: Harvard Business School 24 The Case Study Analysis. Product Development at Dell Computer Corp. case analysis, Product Development at Dell Computer Corp. case study solution, Product Development at Dell Computer Corp. xls file, Product Development at Dell Computer Corp. excel file, Subjects Covered Managing uncertainty Product development Risk by Stefan Thomke, Vish V. Krishnan, Ashok Nimgade Source: Harvard Business School 21 pages. (457). The home users segment makes up 25 percent of all computers shipped worldwide. Due to the drop in revenue stream in the Large enterprise customer segment, Dell looks to the home users and. When analyzing barriers to new entrants, it is clear that the global computer industry has lots of barriers particularly when contending with the top global brand names such as Dell which has an established sales and circulation network in addition to resources to fulfill its goals. Threats In the late 1990’s and the early 2000’s the industry saw a wave of successful new computer manufacture enter the market such as Acer, Asus, Toshiba, and Fujitsu making the Threat of new entries high. In addition, due to the economic downturn, the demand in the Home User market has changed; households are reducing their discretionary spending and opting for low-cost PCs with fewer features. 1. The aim of the task is to show students how to analyze a situation, determine what problems exist, and come up with the best possible strategy to achieve the desired outcome. * There is low product differentiation, example brand name and loyalty are a barrier to entry. Innovation Resources Dell’s historical direct sales model has enabled the company to gather consumer sentiment information directly from the customers rather than third party retailers. aaii. Five years later, revenues had climbed to $500 million, and by the end of 2000, Dell… com/careers/first_jobs/2009) Dell also prefers to promote its current employees rather than hire from outside. Suppliers can therefore set higher prices so that they make higher profits and this will reduce profits made by sellers. • Automate manual IT tasks and service provisioning. Canada, Irwin professional Pub. Don’t waste Your Time Searching For a Sample, Get Your Job Done By a Professional Skilled Writer. The suppliers of Dell products therefore have a responsibility of ensuring that the product has satisfied the customer. This kind of tailored service which develops items according to client requirements and configurations. Over the last decade, Dell has increased revenues by 142 percent and currently has $9 billion in cash. This allows them to detect shifts in customer preferences earlier than competitors and reduce new product development time. 1. (247), 4.9 ANALYSIS OF STRATEGIC OPTIONS AND THE RECOMMENDATION. Competitor Analysis: Dell has 5 key competitors. Dell Case Study. This is threatening to Dell because they already face the challenge of low costs from international competitors; adding the consumer preference of low-cost PCs suggests that Dell must now directly compete with other PC-makers who are cost-competitive. Get Essay. How does the case describe Dell's transformed strategy over the years in terms of where to compete, how to compete, and with what to compete? [email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA. In the emerging nations of the BRIC countries Dell is providing a region specific product the “Vostro-A” to meet the need of the customers in these Countries, the customers are concerned with basic PC functions such as access to the internet and email. Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. Dell is restructuring in order to better align with customer needs for faster innovation and globally standardized products and services. As far as business practice innovations go, one computer industry analyst commented, “Everyone is piggybacking Michael Dell’s distribution concept. Companies such as IBM, Apple Compaq and HP are the global rivals for Dell; they are on high position in computer system industry where the competitive competition is a survival. Rivalry Threat of rivalry is determined to be High. Strengths: A staple in everyone’s home. 5. ” One last current issue Dell faces is rising costs. Part of their strategy for relationship management with these companies comes from a strategy they implemented in 1986. It also dictates the level of success which a business organization is likely to achieve especially through executing effective marketing strategies such as product differentiation. 6. This encourages current employees to continue working hard to grow within the company. Although the company achieved profitability during this period, its sales revenues decreased by 8% due to strong competition. It is the level at which customers can influence price changes through their bargaining power. Dell’s segment growth strategy depends on Dell’s ability to detect customer shifts in preferences earlier than its competitors, remaining innovative, and providing value to the customer by simplifying their IT environment and providing customized solutions for their specific needs while keeping costs low How will competitor’s strategies and actions impact Dell’s ability to achieve its growth objectives? They decided that if a large enterprise had a problem with one of their products, instead of trying to tell them how to fix it themselves, they would respond with “I’ll be right there” and they would fix the problem on site. In bargaining power of purchasers, buyers have a reasonably high bargaining power. Dell SWOT Analysis. These environment segments affect all industries and the firms competing in them. In 2008 Dell acquired EqualLogic to gain a foothold in the iSCSI storage market. 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