Dell , A Computer And Computer Related Products Company

Introduction:sales are undertaken the company is in a position to
Dell is an American company which deals witheliminate retailers and wholesalers and for this reason
computer and computer related products, thetheir products reach the market at very competitive
company employs over 78,000 employees, thisprices.[3]
company is the second largest company in theWeaknesses:
computer industry while Compaq is the largest. TheThe Dell Company has some weaknesses where one
company was funded by Michael Dell in 1984 henceof its weaknesses is that it highly depends on the
the name Dell.suppliers of components. This makes it a weakness in
Competitors:that it depends on other companies to supply them
The Dell Company faces major competition fromwith computer components instead of them producing
other companies, this include Apple, Sun Microsystems,their own computer components.
Gateway, Sony, Asus, Toshiba and Hewlett PackardThe other weakness is that the company does not in
which is also referred to as HP. All this companies areitself produce new technology, they are not the
its competitors but HP is its major competitor,proprietors of the technology they use to produce and
competition increased when HP merged with Compaqfor this reason they depend on others to introduce a
in the year 2006, this meant stiffer competition and thecertain technology where they adopt the technology
company lost its market position to become theand introduce it to the market.[4]
second largest seller of computers and computerOpportunities: There is a market potential in many
appliances.regions in the world where Dell has not introduced its
Success of Dell:products, these markets especially are in china, India
Dell has been successful in the computer industry whileand Europe, and for this reason therefore this
other companies such as Sony and Toshiba have notcompany has the potential to expand their market size
made as much as Dell. In the computer industry thein these regions where the company would
products that are produced have a very short lifeexperience an increase in the market area.
cycle and for this reason products quickly becomeAnother opportunity of this company is that it would be
obsolete. Toshiba and Sony have only tried to make ain a position to under price its competitor and in turn
steady supply of their products but in the computerincrease sales levels which will result into higher profits,
industry this is not very important, what is important infor this reason therefore the company should invest
the computer industry is flexibility. Flexibility means thatmore in discovery of new technology which will ensure
a volume of one product is supplied quickly and whenthat they are in a position to provide latest technology
there is a change in technology a company mustproducts at low prices to its customers.
switch quickly and offer the new product to theThreats:
market.[1]The Dell Company is faced with strong competition
Dell has succeeded in changing their products when afrom its rivals, this threatens the existence of the
new technology emerges. This is followed by a wellcompany where prices of products produced by its
organised supply chain where products are offered incompetitors are likely to go down forcing them to
the market, for this reason therefore Dell has beenlower prices and in turn their profits will decline and in
successful due to their quick adoption to newextreme cases may force Dell Company to close due
technology that emerge in the production ofto the failure to break even.[5]
computers and computer products.Currency fluctuations in countries which are outside the
The other reason why Dell has been successful is theunited states also pose a threat to the company, this
adoption of a sophisticated supply network, Dellfluctuations may lead the company to loose their
products are shipped directly from the supplier to theearnings as customers order goods from outside the
end customer, customers will only order their productsunited states and the currency fluctuates.
and they are directly delivered to them, this hasFinancial ratios:
ensured a very effective supply chain which has led toOne of the most important financial ration is the profit
the success of Dell, its competitors like Toshiba andmargin, this ratio provides us with a measure of
Sony have not adopted such supply networks and forprofitability of a company, the profit margin is
this reason they have not been in a position tocalculated by dividing the net revenue by the net sales
succeed in this industry.[2]revenue, for the dell company according to the US
Performance measures in the computer industry:market comparison of companies the Dell company
Performance measures are those indicators that helpprofit margin is 5.0, the industry profit margin is 12.4, this
a company to define and measure the progress ofis low compared with the industry level provided by S
the company, the computer industry has come up withand P index which is 12.4. The profit margin of a
benchmarks to measure performance, the Rawcompany is also an indication of its pricing policy and
speed is one of benchmark used to measurealso the company’s ability to control prices, the
performance in this industry, it is a measure fromdifferences in profit margin shows the differences in
SPEC which stands for standard performanceproduct mix and also competitive strategies among
evaluation Corp, this benchmark measures the centralcompanies [6]
processing unit, however this measure does notThe other financial ratio is the debt equity ratio, this
consider how fast data can be retrieved from theratio n provides a measure of a companies proportion
hard disk and this measure is complicated.of equity and debts used to finance the companies
Another test checks the CPU integer performance.operations. Dell debt equity ratio is 0.09 while the
This means checking how the CPU handles simpleindustry ratio is equal to 0.03. This ratio is also referred
tasks, the other measure is the SPECINT95 whichto as risk because it is equal to the debts divided by
checks how the product handles complexthe shareholders equity.[7]
mathematics. Another performance measure is theThe gross margin is a financial ratio that defines a
graphic performance benchmark, it is aimed atcompanies amount of contribution toward its enterprise
measuring how fast computers will run graphicafter payments of it production costs, the value of
intensive applications, and the graphic performancegross margin for Dell company is 18.71%, the gross
measure is provided by the GPC which stands formargin is derived from revenue minus cost of goods
Graphic performance committee.sold divided by revenue then multiplied by a hundred.
Project two:The market capitalisation for Dell is 42.8 billion dollars
SWOT analysis:while total shares outstanding are 2.2 billion, the
Strengths:earnings per share ration in this company is equal to
Strength of the Dell company is that the company1.33.
offer customised products to its consumers, theReferences:
company products are built to order, the customerHaim M. and Johannes Z. (1999) Survival of the
orders and he or she is shipped the product, for thisSmartest: Managing Information, John Wiley and Sons
reason therefore the customer gets what he or shepublishers, New York
wants, this is a strength through which the company isMSN market ratios (2008) Dell financial ratios, retrieved
able to communicate with its customers and they areon 5th February, available at
able to understand their needs which is a key toDell official website (2008) About Dell, retrieved on 5th
success in every business.February, available at
The other strength is the introduction of internet order[1] Haim M. and Johannes Z. (1999) Survival of the
of products, customers order through the internetSmartest: Managing Information, John Wiley and Sons
which enable a swift and improved distribution process,publishers, New York, page 98
this also enables the expansion of value added[2] Haim M. and Johannes Z.
services, through the introduction of a website where