REPORT

ON
DELL COMPANY

GUIDED BY : DR. SANDEEP KUMAR MOHANTY

SUBMITTED BY :

NAME : PRIYANKA MOHANTY

ROLL NO : 012001025
SUBJECT : MARKETING MANAGEMENT
 DELL

Dell is an American multinational computer technology company

that develops, sells, repairs, and supports computers and related
products and services. Named after its founder, Michael Dell, the
company is one of the largest technology corporations in the world,
employing more than 165,000 people in the U.S. and around the
world. It is one of the biggest PC product companies in the world. Dell
sells personal computers (PCs), servers, data storage devices, network
switches, software, computer peripherals, HDTVs, cameras, printers
and electronics built by other manufacturers. The company is well
known for its innovations in supply chain management and electronic
commerce, particularly its direct-sales model and its "build-to-order" or
"configure to order" approach to manufacturing delivering individual
PCs configured to customer specifications. Dell was a pure hardware
vendor for much of its existence, but with the acquisition in 2009
of Perot Systems, Dell entered the market for IT services. The
company has since made additional acquisitions in storage and
networking systems, with the aim of expanding their portfolio from
offering computers only to delivering complete solutions for enterprise
customers.
 SWOT ANALYSIS OF DELL COMPANY

Strengths
 Dell has reliability and excellent customer service along with strong brand loyalty
Has approximately 100,000+ employees worldwide.
 Acquisitions have strengthened Dell's position in the global market.
 Dell ProSupport is an excellent service feature providing customer service 24x7
for the entire year.
 Strong advertising & branding make it a popular laptop & PC brand.
 Their assembly is done at a fairly inexpensive cost.
 They offer their customers the ability to track their delivery.
 They are the number one PC provider for medium and small businesses across
the US for 10 straight years.
 They ship around one hundred and forty thousand computers in a day.
 World’s largest PC maker.
 One of the best known brands in the world.
 First PC maker to offer next-day, on-site product service.
 Direct to customer business model. Uses latest technology.
 Dell has remarkably low operating cost relative to revenue because it cuts out the
retailer and supplies directly to the customers.
 Dell’s Direct Model approach enables the company to offer direct relationships
with customers such as corporate and institutional customers.
 Dell’s direct customer allows it to provide top-notch customer service before and
after the sale.
 Each Dell system is built to order to meet each customer’s specifications.
Reliability, Service and Support.
 Dell boasts a very efficient procurement, manufacturing and distribution process
allowing it to offer customers powerful systems at competitive prices.
 Dell is able to introduce the latest relevant technology compared to companies
using the indirect distribution channels.
 Dell is not a manufacturer; Components are made by the suppliers and Dell
assembles the computers using relatively cheap labor. The finished goods are
 then dropped off with the customer by courier. Dell has total command of
the supply chain.
 Dell turns over inventory for an average of every six days, keeping inventory costs
low.
 Dell is enhancing and broadening the fundamental competitive advantages of the
direct model by increasingly applying the efficiencies of the Internet to its entire
business.

Weakness
 Market share growth is slow due to competition; Fake products/ imitations affect
sales.
 Lack of Dell Stores as main business is done online, can be an issue for some
customers.
 Dealing with a large amount of supplies from many different countries can cause
a large issue when products are recalled.
 They build computers, not develop them.
 Their supply orders are so large that they become limited to dealing with a small
few supplies that can handle the volume.
 They have weak business relationships with many computer retailers.
 They do not have unique technologies to offer the market.
 Not attracting the college student segment of the market. Dell’s sales revenue
from educational institutions such as colleges only accounts for a merely 5% of
the total.
 Dell’s focus on the corporate and government institutional customers somehow
affected its ability to form relationships with educational institutions.
 For home users, Dell’s direct method and customization approach posed
problems. For one, customers cannot go to retailers because Dell does not
use distribution channels.
 Customers just can’t buy Dell as simply as other brands because each product is
custom-built according to their specifications and this might take days to finish.
 Opportunities
 With increase in e-commerce the online retail stores of Dell provide them better
framework to tap new business.
 The Direct approach Model of Dell would help them their existing to sell the
other IT products, so new product development opportunity is for the company.
 Dell can target low priced tabs to capture emerging markets & rural areas.
 Tie-ups with research institutes, schools, colleges etc can further boost the
company's business.
 The introduction of new and enticing products to the customers.
 Branding their lower cost, lower priced computers that are sold anonymously
throughout the world to open other avenues of branding opportunities.
 Maintaining and expanding the one stop shopping abilities that are offered to
their customers.
 Broadening their scopes in Europe, India and China.
 Personal computers are becoming a necessity now more than ever. Customers
are getting more and more educated about computers. Second-time buyers would
most likely avail of Dell’s custom-built computers because as their knowledge
grows, so do their need to experiment or use some additional computer features.
 Threats
 With the increase in innovation in the market the computer systems are
becoming outdated, so Dell should constantly come out with new products.
 People need the quality products at low price which was Dell strength due to it’s
customize solution, but now its competitors are coming up with products in same
price range.
 Technological advancement constant, hence breakthrough innovation is essential.
 Increasingly popular brand names in the competition.
 Strong relationships that are held between competitors and the retailers.
 Fluctuations in the currency markets can make global business operations more
open to losses in certain areas of the supply chain.
 Tariff trade barriers affecting their positions in multiple countries.
 Increasingly lower prices for products amount their competitors.
 New entrants to the market pose potential threats.
 The threat to become outmoded is a pulsating reality in a computer business.
 The growth rate of the computer industry is also slowing down. Today, Dell has
the biggest share of the market. If the demand slows down, the competition will
become stiffer in the process. Dell has to work doubly hard to differentiate itself
from its substitutes to be able to continue holding a significant market share.
 STRENGTHS WEAKNESS
 Direct sales business model.  Slow to alter products.
 Product customization.  Extensive dependency on suppliers.
 Privately owned company.  Limited differentiation of products.
 Third biggest PC seller in the world.  Don’t have unique technology.

 Charismatic leadership (CEO).

 Dealing directly with the customers.
 PC’s are built according to the customer
expectation.
 Low price
 Very well known brand.

OPPORTUNITIES THREATS
 Huge amount of investment in research  Industry lifecycle.
& development.  Tablets and Smartphone’s as
 Growth of developing economies. substitutes.
 Development of new products and  Large amount of competition.

technologies like cloud computing,

security, tablets.
 TOWS ANALYSIS OF DELL COMPANY
STRENGTHS WEAKNESS

1. Direct sales business model. 1. Slow to alter products.

2. Product customization. 2. Extensive dependency on
3. Privately owned company. suppliers.
4. 3rd biggest PC seller in the
3. Limited differentiation of
world
5. Charismatic leadership. products.
6. Dealing directly with 4. Don’t have unique
customer. technology.
7. Pc’s are built according to
customer expectation.
8. Very well known brand.
9. Low price.

OPPORTUNITIES STRENGTH &OPPORTUNITIES WEAKNESS &OPPORTUNITIES

1. Huge amount of investment in 1. Develop the business 1. Continue with high

research & development. numbers of economies; investment in
2. Growth of developing economies. (S1,S2,S4,S6,S7,S8,S9,O4). research &
2. Develop the same concept of development to
3. Development of new products and
product customization with develop new
technologies like cloud computing, different products ;( S2, O2). technologies and
security, tablets. 3. Well known brand might PC’s (W1, W3, O1,
help to create new portfolio and O2).
of products and services ;(S8, 2. Develop new
O2). products that may not
need the same
suppliers (Intel,
Microsoft)(w2,02).

THREATS STRENGTH &THREATS WEAKNESS &THREATS

1. Industry lifecycle. 1. Cloud computing market 1. Review their

2. Tablets and Smartphone’s as growing may enable the differentiation strategy in
substitutes. company to create new order to gain competitive
datacenter around the world advantage (W3, T1, and
3. Large amount of competition.
(S3, S6, S8, and T1). T3).
2. Keep investment in its first 2. Focus on the
business model to overcome development of tablets for
competition ;( S1, S2, S6, S7, the final consumer (W1,
S9, T1, T3). T2).
 WHAT IS PESTEL ANALYSIS?
A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a
framework or tool used to analyze and monitor the macro-environmental factors that may
have a profound impact on an organization’s performance. This tool is especially useful
when starting a new business or entering a foreign market.

PESTEL ANALYSIS
OF
DELL

THE FIVE FACTORS OF ANALYSIS ARE :

1. Political factor
2. Economical factor
3. Social factor
4. Technological factor
5. Environmental factor
6. Legal factor
 Dell today operates in multiple nations and thus considering the political scenarios of each
of the country it operates in is important. The country’s political situation determines the
ease with which the corporate functions.
 Europe and China are two important geographical regions for Dell. US is in midst of
intense trade war under the leadership of Trump. This toughens the export and import of
products.
 The rates shoot up due to the political differences. Same is the case with European Union.
 The additional adverse impact this political stability has is on supply of raw material and
semi-finished good carrying for assembly.
 The integrity of the politicians and their likelihood to take part in acts of corruption, as the
resulting repercussions may lead to possible impeachments or resignations of high level
government employees.
 The laws that the country enforces, especially with regards to business, such as contract law
also creates a problem for the business.
 The trade barriers that the host country has would protect; however, trade barriers that
countries with potential trade partners would harm companies by preventing potential
exports.
 A high level of taxation would de-motivate companies like from maximizing their profits.
 Dell as a giant tech corporate faces many economic challenges. Primary factor is the
exchange rate since it operates in multiple countries and in each country, it is equally
important to have a healthy currency rate.
 The economic system that is currently operational in the sector in question- whether it is a
monopoly, an oligopoly, or something similar to a perfect competition economic system.
 The economic growth index called GDP determines the growth rate of corporation in that
specific country.
 Then comes the taxation policies of respective territory. The higher the taxes more will be
the overall cost of the goods to be sold and in times like global recession people lose their
buying power and thus the sale of Dell reduces drastically.
 The import rates and excise duties which spike up the raw material import costs is also a
critical factor.
 The interest rates in the country would affect how much individuals are willing to borrow
and invest.
 However efficiently the financial markets operate also impact how well can raise capital at
a fair price, keeping in mind the demand and supply.
 Many a times the new policies do well to corporation. For example, GST in India in which
all sub-taxes we brought under one umbrella calling it the GST.
 Dell is no more into just computers. It also has acquired companies in gaming sector, big
data etc. Thus, their economic factors also affect Dell as the parent organization
 The demographics of the population, meaning their respective ages and genders, vastly
impact whether or not a certain product may be marketed to them.
 The class distribution among the population is of paramount importance: would be unable
to promote a premium product to the general public if the majority of the population was a
lower class; rather, they would have to rely on very niche marketing.
 To some extent, the differences in educational background between the marketers and the
target market may make it difficult to relate to and draw in the target market effectively.
 It should be very careful not to lose the connection to the target market's interests and
priorities.
 Needs to be fully aware of what level of health standards, reactions to harassment claims
and importance of environmental protection prevail in the industry as a whole, and thus are
expected from any company as they are seen as the norm.

 Usage of computer has seen a great evolution. It was a necessity at premium office spaces
in earlier days. Having personal computer at desk was a sign of prestige. But the time has
changed. People are now more technology oriented and have made peace with the fact that
without technological learning’s they are not going to progress in career.
 Also, a totally different segment of market is formed by youngsters who are much ahead and
equipped to learn technology. They use PCs both for gaming as well as educational purpose.
 The preference for detachable and tablets is more. Dell should study the demographics and
accordingly set their marketing and product distribution.
 The economic class of the region is also necessary study prior to targeting specific product in
any market.
 The recent technological developments and breakthroughs made by competitors.
If encounters a new technology that is gaining popularity in the industry in question, it is
important to monitor the level of popularity and how quickly it is growing and disrupting
its competitors’ revenues. This would translate to the level of urgency required to adequately
respond to the innovation, either by matching the technology or finding an innovative
alternative.

 How much an improvement of technology would improve/ transform what the product
initially offers. If this improvement is drastic, then other firms in the industry suffer more
heavily.

 The impact of the technology on the costs that most companies in the industry are subject to
have the potential to increase or reduce the resulting profits greatly.

 If these profits are great in number, they may be reinvested into the research and
development department, where future technological innovations would further raise the
level of profits, and so on, ensuring sustainable profits over a long period of time.

 Dell as a corporation is definitely affected by the technological changes since it itself is

technology-based firm.
 Main product of dell is computer. People have changing demands. There was a time when
computer was only to be operated by mouse and external keyboard. Then came the laptops
with track pad and embedded keyboards. Now is the phase where touch screen monitors in
both computers (PCs) and laptops. The demand is to have as big screen as possible.
 The processor is upgraded timely. Since Dell is into gaming laptops as well (after acquiring
Alienware), there the graphic card technology has to be updated with challenging
competitors so as to not be obsolete. Developing technologies which support PC sector like
the cloud are also to be considered and Dell is in the business of Cloud services.
 The current weather conditions may significantly impact the ability of to manage the
transportation of both the resources and the finished product. This, in turn, would affect
the delivery dates of the final product in the case of, say, an unexpected monsoon.

 Technological firms are under the scanner of government and other institutions since they
cause harm to the environment while manufacturing their products.
 The major concern is the immense carbon prints they leave behind.
 The electronic waste generated which is non-biodegradable is dangerous for the soil, water
bodies and also the stray animals who may consume it.
 Dell should try and focus to create recyclable products and its R&D team should focus on
the same.
 That would not only give them an edge over the competitors by reducing the costing because
the amount of raw material to be imported would reduce drastically but also create a very
good socially responsible brand image among its customers.
 Laws are also placed to ensure a certain level of quality or reasonable price for certain
products to keep the customer safe and prevent them for being provided. The industries this
applies to find often their costs elevated.

 Since Dell operates in multiple regions it has to abide by respective laws.

 The labor laws covering the minimum wages, just working conditions, welfare of employee
may vary from country to country.
 The taxation laws as well change from place to place but Dell has to be in compliance with
them in every place it operates to save itself from facing any penalty.
 When in 2019, India operates under GST law but if Dell doesn’t change its policies
accordingly then its operation in India will be at huge loss.
 Environment laws are also governing factors for manufacturing of their products and these
environmental laws need to be followed strictly seeing the current attention of the world as
a whole concerning the environment we live in.
 Porter’s Five Forces AnAlysis
A model was put forward by Michael. E. Porter in an article in the Harvard
Business Review in 1979. This model, known as Porter's Five Forces Model is a
strategic management tool that helps determine the competitive landscape of an
industry. Each of the five forces mentioned in the model and their strengths help
strategic planners understand the inherent profit potential within an industry.
The strengths of these forces vary across the industry to industry, which means
that every industry is different regarding the profitability and attractiveness.
The structure of an industry, even though it is stable, can change over time.

FIVE FORCE ANALYSIS

OF
DELL

These Porter’s five forces are as follows:

 Threat of New Entrants
 Bargaining Power of Suppliers
 Bargaining Power of Buyers
 Threat of Substitute Products or Services
 Rivalry Among Existing Firms
 THREAT OF NEW ENTRANTS

 The economies of scale are fairly difficult to achieve in the industry in which Dell operates.
This makes it easier for those producing large capacitates to have a cost advantage. It also
makes production costlier for new entrants. This makes the threats of new entrants a
weaker force.
 The product differentiation is strong within the industry, where firms in the industry sell
differentiated products rather a standardized product. Customers also look for
differentiated products. There is a strong emphasis on advertising and customer services as
well. All of these factors make the threat of new entrants a weak force within this
industry.
 The capital requirements within the industry are high, therefore, making it difficult for new
entrants to set up businesses as high expenditures need to be incurred. Capital expenditure is
also high because of high Research and Development costs. All of these factors make the
threat of new entrants a weaker force within this industry.
 The access to distribution networks is easy for new entrants, which can easily set up their
distribution channels and come into the business. With only a few retail outlets selling the
product type, it is easy for any new entrant to get its product on the shelves. All of these
factors make the threat of new entrants a strong force within this industry.
 The government policies within the industry require strict licensing and legal requirements
to be fulfilled before a company can start selling. This makes it difficult for new entrants to
join the industry, therefore, making the threat of new entrants a weak force.
 BARGAINING POWER OF SUPPLIERS

 The number of suppliers in the industry in which Dell operates is a lot compared to the
buyers. This means that the suppliers have less control over prices and this makes the

bargaining power of suppliers a weak force.

 The product that these suppliers provide are fairly standardised, less differentiated and have
low switching costs. This makes it easier for buyers like Dell to switch suppliers. This makes

the bargaining power of suppliers a weaker force.

 The suppliers do not contend with other products within this industry. This means that
there are no other substitutes for the product other than the ones that the suppliers provide.

This makes the bargaining power of suppliers a stronger force within the industry.

 The suppliers do not provide a credible threat for forward integration into the industry in
which Dell operates. This makes the bargaining power of suppliers a weaker force within

the industry.

 The industry in which Dell operates is an important customer for its suppliers. This means
that the industry’s profits are closely tied to that of the suppliers. These suppliers, therefore,

have to provide reasonable pricing. This makes the bargaining power of suppliers a weaker

force within the industry.

 BARGAINING POWER OF BUYERS

 The number of suppliers in the industry in which Dell operates is a lot more than the
number of firms producing the products. This means that the buyers have a few firms to

choose from, and therefore, do not have much control over prices. This makes the bargaining

power of buyers a weaker force within the industry.

 The product differentiation within the industry is high, which means that the buyers are
not able to find alternative firms producing a particular product. This difficulty in

switching makes the bargaining power of buyers a weaker force within the industry.

 The income of the buyers within the industry is low. This means that there is pressure to
purchase at low prices, making the buyers more price sensitive. This makes the buying power

of buyers a weaker force within the industry.

 The quality of the products is important to the buyers, and these buyers make frequent
purchases. This means that the buyers in the industry are less price sensitive. This makes the

bargaining power of buyers a weaker force within the industry.

 There is no significant threat to the buyers to integrate backwards. This makes the
bargaining threat of buyers a weaker force within the industry.
 THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

 There are very few substitutes available for the products that are produced in the industry
in which Dell operates. The very few substitutes that are available are also produced by low
profit earning industries. This means that there is no ceiling on the maximum profit that
firms can earn in the industry in which Dell operates. All of these factors make the threat of
substitute products a weaker force within the industry.
 The very few substitutes available are of high quality but are way more expensive.
Comparatively, firms producing within the industry in which Dell operates sell at a lower
price than substitutes, with adequate quality. This means that buyers are less likely to
switch to substitute products. This means that the threat of substitute products is weak
within the industry.
 RIVALRY AMONG EXISTING FIRMS

 The number of competitors in the industry in which Dell operates are very few. Most of
these are also large in size. This means that firms in the industry will not make moves
without being unnoticed. This makes the rivalry among existing firms a weaker force within
the industry.
 The very few competitors have a large market share. This means that these will engage in
competitive actions to gain position and become market leaders. This makes the rivalry
among existing firms a stronger force within the industry.
 The industry in which Dell is growing every year and is expected to continue to do this for a
few years ahead. A positive Industry growth means that competitors are less likely to
engage in completive actions because they do not need to capture market share from each
other. This makes the rivalry among existing firms a weaker force within the industry.
 The fixed costs are high within the industry in which Dell operates. This makes the
companies within the industry to push to full capacity. This also means these companies to
reduce their prices when demand slackens. This makes the rivalry among existing firms a
stronger force within the industry.
 The products produced within the industry in which Dell operates are highly differentiated.
As a result, it is difficult for competing firms to win the customers of each other because of
each of their products in unique. This makes the rivalry among existing firms a weaker force
within the industry.
 The production of products within the industry requires an increase in capacity by large
increments. This makes the industry prone to disruptions in the supply-demand balance,
often leading to overproduction.
 Overproduction means that companies have to cut down prices to ensure that its products
sell. This makes the rivalry among existing firms a stronger force within the industry. The
exit barriers within the industry are particularly high due to high investment required in
capital and assets to operate. The exit barriers are also high due to government regulations
and restrictions.
 BCG MATRIX MODEL
The evaluation is based on the market share and growth prospects of the different
products, which helps in placing these products in different categories of cash
cows, stars, question marks and dogs.

CASH COWS

 The cash cow in BCG Matrix is used for products that have a high market share
in their respective industry.
 Moreover, the industry has reached its potential therefore; it is not likely to have
any further development, thus limiting the chances of any further significant
growth for the product.
 Nevertheless, the situation is still deemed as favorable by the organization as the
high market share makes the product a source of sustainable profits and revenues
for the business entity.
 Dell Inc. has some products which can be categorized as a cash cow on the basis
of the high market share and revenues of these products.
 One of the prominent examples in this case is the Dell PC which has been able to
provide the company with sustainable profits.
 There has been a decline in the market need of PC; nevertheless, Dell has been
able to continue getting operational profits through its PC segment (Lev-Ram,
2016).
 This positioning of the PC can help Dell to maintain a strong position in the
market, while use the cash generated by this segment for promoting the
operations of its other product ranges.
 STARS

 According to the BCG framework, stars on the other hand have the potential to
grow in the market as the industry is still progressing.
 The high market share possessed by the stars is also likely to increase with the
growth of the product.
 Any product that is categorized as a star is required to fulfill these two criteria, a
good source of income for the firm and a significant market share that has future
growth potential due to favorable industry dynamics.
 The matrix has further reflected the possibility of a star product turning into cash
cow if the favorable industry environment and market success drives the product
into becoming a leading source of earning for an organization.
 Dell monitors can be seen as stars owing to their innovative ideas and the possible
appeal that the innovative products can create in the target market.
 According to Hardavar (2017) the ultra-thin monitor required some major
changes in the design of monitors and this step has enabled the company to gain
positive response from the target market.
 The monitor is expected gain significant market share in the future, indicating
the possibility of this star product turning into a cash cow for Dell Inc.
 At present, the ultra-thin monitor is operating in a growing industry which allows
the firms to create new product designs and use the innovative ideas to make the
products profitable.
 Another notable example that has generated significant amount of revenues for
the company is its laptops, primarily the XPS 13 which is marked by a high
degree of flexibility and offers the users 360 degree hinge, along with the ease of
portability (Kingsley-Hughes, 2017).
 QUESTION MARKS

 The BCG Matrix has also focused on products that seem to have an uncertain
future, which has been termed as question marks.
 These products can either become a success case for the firm by improving their
financial performance, or become a prime candidate for divestment due to low
performance.
 The market share of these products is low however they seem to have some
chance of improvement in terms of market share and financial performance.
Cloud computing is a question mark for the company as it has recently taken the
initiative to obtain cloud computing platforms.
 The future of cloud computing platforms under the management of Dell is still in
an emerging phase. It can become a profitable venture for Dell as the rising trend
of cloud computing can bring higher revenues and profitability to the company.
 However the possibility of failure indicates that this product segment is a question
mark as the future progress is still uncertain. A positive development in this
domain, Dell can place the cloud computing as a star, and eventually a cash cow.
 DOGS

 The dogs in BCG Matrix are products that are the low performing items or
business units that fail to generate enough revenues.
 In addition to this, these products have a low market share which is an additional
issue in managing the production of these items. The low profit emerging
attributed to the low sales of these items is the key reason for identifying these
items as a dog.
 The continuous stream of investment followed by low revenues make this
category a likely target for divestment by the management.
 Dell has decided to launch its own brand of cell phones to cater the needs of
smart phone users across the globe.
 Its smart phone can be identified as a dog as it the product is included in the list
of items that have not been able to become a source of profitability for the
technology leader.
 Contrary to the company expectations, its entry into the smart phone market
didn’t succeed and it was unable to compete against market leaders such as Apple
Inc. Reisinger (2011) has analyzed the lack of success of Dell mobiles and found
the root cause of problem as the lack of product compatibility with the consumer
needs and preference.
 Due to this reason the company had greater investment than the return it was
able to gain for that financial input.
 GE MATRIX
The 9 cells of GE matrix are grouped on the basis of low to high industry
attractiveness and week to strong business strength and competitive position.
There are 3 zones indicating 3 different combinations.

GO AHEAD : Under these phase the signal is to proceed and take decisions such
as Dell has become universally acceptable and now it should go ahead and take
up more marketing development and expansion.

WAIT AND WATCH : These is the 2nd zone of GE matrix, this indicates hold
and maintain current strategy.

STOP : Coming to the 3rd zone it gives signal to stop under the product of Dell
Corporation, Thus to conclude with GE matrix it allows the user to select
whatever criteria they feel are more appropriate to their business situations.
 Porter’s Value Chain Analysis Of Dell
Porter's value chain model is highly popular in the business world.
However, the effective Value Chain Analysis requires Dell to realize that all
activities or functions do not require same scrutiny level. Hence, the first step of
adapting the Porter Value Chain framework is to identify the importance of
activities according to their role in product/service delivery process.

Primary Activities
The primary value chain activities of Dell are directly involved in producing and
selling the product to targeted customers.

 INBOUND LOGISTICS
It is important to develop strong relationships with suppliers as their support is
necessary to receive, store and distribute the product. Without analyzing the in-
bound logistics, Dell can face various challenges in product development phases.
Analysis of in-bound logistics requires a company to focus on every aspect of
transformation from raw material to finished product. Some examples of inbound
logistics are retrieving raw material, storing the inputs and internally distributing
the raw material and components to start production.

 OPERATIONS
The importance of analyzing operational activities rises when raw material arrives,
and Dell is ready to process the raw material into the end product and launch it in
the market. Some examples of operational activities are machining, packing,
assembling and testing. Equipment repair and maintenance also falls into this
category.
It includes both- manufacturing and service operations. Analysis of operational
activities is important for improving productivity, maximizing the efficiency and
ensuring the competitive success of Dell. The increased productivity can help
Dell to achieve consistent economic growth, increase profitability and set a
powerful basis for competitive advantage.
 OUTBOUND LOGISTICS
Outbound logistics include the activities that deliver the product to the customer
by passing through different intermediaries. Some outbound logistics activities are
material handling, warehousing, scheduling, order-processing, transporting and
delivering to the destination. Dell can analyze and optimize the outbound logistics
to explore competitive advantage sources and achieve its business growth
objectives.
Because, when outbound activities are timely managed with optimal costs and
product delivery processes put a minimum negative effect on the quality, it
maximizes the customer satisfaction and increases growth opportunities for the
firm. Dell should pay specific importance to its outbound value chain activities
when its offered products are perishable and require quick delivery to the end
customer.

 MARKETING AND SALES

At this stage, Dell will highlight the benefits and differentiation points of offered
products to persuade the customers that its offering is better than competitors.
Only producing a high quality product at affordable costs and distinctive features
cannot create value until Dell invests on the marketing and sales activities. The
sales agents and marketers play an important role here.
Some examples of Dell's marketing and sales activities are- sales force,
advertising, promotional activities, pricing, channel selection, quoting and
building relations with channel members. The company can use the marketing
funnel approach to structure its marketing and sales activities.
Effective and wisely integrated marketing activities can develop the brand equity
of Dell and help it stand out from the competition. However, Dell must avoid
making false commitments about product features that cannot be fulfilled by the
production department. It indicates the need to ensure coordination between
different value chain activities.

 SERVICES
The pre-sale and post-sale services offered by the Dell will play an important role
in developing customer loyalty. The modern customers consider post-sale
services as important as marketing and promotional activities. The power of
negative e-WOM due to poor support service cannot be undermined in the
current technologically advanced era. The company must analyze its support
activities to avoid damaging brand reputation, and instead use it as a tool to
spread positive word of mouth due to quick, timely and efficient support services.
 SECONDARY ACTIVITIES
The support activities play an important role in coordinating and facilitating the
primary value chain activities. Dell can also benefit from analysis of its support
activities as explained below.
1. FIRM INFRASTRUCTURE
The firm infrastructure denotes a range of activities, such as- quality management,
legal matters handling, accounting, financing, planning and strategic management.
Effective infrastructure management can allow Dell to optimize the value of the
whole value chain. Dell can control the infrastructure activities (or commonly
called overhead costs) to strengthen the competitive positioning in the market.
2. HUMAN RESOURCE MANAGEMENT
Dell can analyze human resource management by evaluating different HR
aspects, including- recruiting, selecting, training, rewarding, performance
management and other personnel management activities. The effective HR
management can allow Dell to reduce competitive pressure based on motivation,
commitment and skills of its workforce. The company can also achieve its cost
minimization objectives by analyzing hiring and training costs with their relative
return. The heavy dependence of Dell on employees' talent will increase the
importance of this value chain support activity.
3. TECHNOLOGY DEVELOPMENT
In a modern, technological advanced era, almost all value chain activities depend
on technological support. The technological integration in production,
distribution, marketing and human resource activities requires Dell to realize the
importance of technology development. It can be divided into product and
process technological development activities. Some examples are- automation
software, technology-supported customer service, product design research and
data analytics. The research and development department of Dell is classified in
this category.
4.PROCUREMENT
The procurement in value chain denotes the processes involved in purchasing the
inputs that may range from equipment, machinery, raw material, supplies, raw
material and other items necessary for producing the finished product. Due to its
linkage with multiple value chain activities, Dell should carefully consider its
procurement activities to optimize the inbound, operational and outbound value
chain.
 5 C’S ANALYSIS FOR DELL

The 5 C’s Analysis for Dell is used to analyze the five key areas in marketing
before making any decision. They are Company, Customers, Competitors,
Collaborators, and Climate. They are used to create a well-defined marketing
strategy.

COMPANY

Dell was founded in 1983 by Michael Dell, with the typical college dropout story.
Michael Dell used his free time to upgrade IBM-compatible hard disks. Two
years later, it grew to a size of $6 million and eventually started manufacturing its
own PCs. The company became inherently successful and became the national
supplier of fortune 500 companies with a size of $500 million.

Over the next few years, the success grew, but with it came bigger issues such as
retail channels, which resulted in an operating loss in the financial year of 1993.
Just three years later, they turned from an operating loss to $710 million profit
with the introduction of a superior product in terms of quality, service, and much
more. The Latitude product also won numerous prizes and awards, which further
improved its brand name and recognition.

Over the years, Dell has introduced new and more innovative products to keep
up with the changing demand. They have managed to do this by keeping a small
inventory standby and using lean productions of distribution such as Just in Time.
Moreover, this has allowed them to offer their customers the option to customize
the products to their specifications.
CUSTOMERS

The market for PCs in the US was about $85 Billion in 1997, with Dell owning
a 10% market share. There are three groups of Dell’s customers. They are the
Transactional, Relationship, and the Mix. These groups consist of 2 main
groups, the Transactional and The Relationship. Both groups have distinctly
different needs and wants and come under a different product category.

Competitors Analysis

The competition in the PC market can be categorized as an oligopoly because

the few big players dominate the market share. The top 10 players take up 65%
of the market share. Due to the increased popularity of the product in the
market and increased new entrants, price competition rose. This caused the
smaller firms with higher cost structures to find it harder to compete and left
the big ten players in the market with the major section of the market.

Dell’s biggest competition and the current market leader is Compaq, which
owns a market share of 18% of the $85 Billion US market for PCs. However,
Dell is benefiting with lean production methods such as Just-in-Time
production, which helps them reduce inventory and warehousing costs and
allows them to change with the market demand. Since competitors such as
Compaq and IBM have an inventory of 2 months at any given time, Dell’s
computer system and features are usually two months ahead of its main
competitors.

In the relationship segment, Dell’s biggest competitors are Compaq, IBM, HP,
amongst others. Furthermore, one of Compaq’s value-added resellers,
Vanstar, offers’ additional services such as on-site services, installations, etc.
Due to the high success of Dell’s customizable segment, competitors such as
Compaq are trying to enter this segment. However, it still has some issues
which could be used by Dell to capitalize further.

Lastly, with the increasing preference for portable devices, the laptop market
is becoming increasingly saturated. Laptops are priced at a premium and are
usually bought in bulk for offices and schools. Dell has recently entered this
market, which is dominated by Compaq, Hewlett-Packard, and IBM, with
these three brands owning 54% of the market share.
 Collaborators/Distribution network

When entering a market or introducing a product, it is crucial to take steps to

increase the awareness of it in the market and successfully distribute it to the
necessary customer segments. That is where collaborators or retailers enter.
Initially, Dell has some issues with its distribution network, which leads to quality
issues.

However, Dell survived that by increasing its importance on a good distribution

network. Right now, Dell uses five main distribution networks, Dell Direct, Retail,
Indirect through Value-Added Resellers, Indirect through national resellers, and
online mediums. All of these channels are vital to Dell’s success as they target the
different segments already existing in the market.

Climate/Context

The climate and context are also important factors when making any decision.
Analyzing the environment around the area is a good measure to understand how
customers make decisions.
Dell was initially established in the US market, but with the scope of the internet
and their online website, they are now exploring markets in India & china.

COMPETITOR ANALYSIS
As one of the world's biggest providers of computers, network servers, and related
products and services, Dell Technologies Inc. competes with a range of giant
technology companies, including HP Inc., Hewlett-Packard Enterprise Group,
Lenovo Group Ltd., IBM Corp., and Apple Inc.
After putting up billions of dollars of his own money to take the company
private in 2013, Michael Dell restructured it and expanded into new sectors. That
included significant strategic investments in enterprise hardware and cloud
services to position the company to compete in the data-heavy fourth industrial
revolution.
Dell Technologies' major rivals include Lenovo Group, HP Inc., Hewlett-
Packard Enterprise, IBM, and Apple.
Dell remains one of the world's top sellers of personal PCs, and is the market
leader in global servers.
 Dell’s Segmentation, Targeting and Positioning (STP)

The formula of segmentation, targeting and positioning is the base for strategic
marketing. Companies realize that they cannot appeal to all customers but have to
identify the customers they are able to serve best and profitably.
The computer market has various products which can basically be classified into
software and hardware categories where each are sub-divided into various product
segments.
It is clear that Dell is focused on the computer hardware market where it started
with the desktop personal computer as its initial product segment.
Further product segments such as notebooks, servers and computer peripherals
have been added to its marketing mix as revenue increased. In addition, Dell has
partnered with major corporations such as Microsoft to ensure their products are
equipped with the latest software as per customers’ needs.
Dell mainly uses customer segmentation in its market strategy along with the
product segmentation where it is targeting several market segments and designing
separate products or offers for them.
On one hand, geographically, Dell has segmented the market into the
US/Americas, EMEA and Asia Pacific-Japan where each area has different
pricing and marketing strategies.
On the other hand, demographically, there is no age, gender or race bias but
income, occupation and education play a role in deciding the customer needs and
hence the product offer.
It is also worth noting that from a behavioral view, Dell focuses on the benefits
sought by consumers such as low price and good quality and service. It also
carefully selects customers with relatively predictable purchasing patterns and low
service costs, allowing itself an opportunity to develop a core competence in
targeting and keeping a specific database for target customers.
 Dell Targets Two Classes Of Customers
 Relationship Customer
The first is the relationship customer such as large corporations, government and
education sectors. These customers provide the largest portion of profit and are
therefore supported by dedicated sales representatives or account managers. A
large share of Dell’s business stems from long-term corporate relationship
accounts for which Dell has developed tailored customer-specific web sites such
as “Premier Pages” with predetermined custom specifications and budgets, giving
them access to product design, order status and product support and service
information.

 Transactional Customer
The second is the transactional customer who is price-sensitive looking for low
cost, more reliable, quality service and added value products. These are mainly
individual customers who are more likely to access, choose and buy online as a
mean to fulfill their product requirements and customer needs. To obtain stable
demand in this segment, Dell used the latest technology products to target buyers
who had regular upgrade purchase patterns, required little technical.
 Dell’s MArketing Mix

Product
 Dell offers its customers a wide range of computer systems workstations, servers,
desktop computers and notebook computers as well as storage products and
solutions.
 Dell also extended their selection by adding computer hardware peripherals,
computer software as well as support services.
 Never the less, Dell does not manufacture the components of its final products,
but instead it relies on a number of trusted suppliers who have convenient
warehouse facilities within 15 minutes of Dell’s production centers.

PLACE
 The place or distribution channel is one of Dell’s distinct advantages in their
marketing mix. This is because Dell uses a direct channel model where it sells its
products directly to the customer without need for a distributor or a middle man.
 Though it initially started with selling products over the phone using a toll free
number that customers can call free of charge, they were the first to adopt
advanced technology and use the internet as a direct channel to sell its products.
 The direct channel model enabled Dell to reduce costs and minimize inventories
and so it has been able to pass these savings to customers in the form of lower
prices.
 PRICE
 Price is the amount of money charged for a product or service, or the sum of the
values consumers exchange for the benefits of having or using the product or
service.
 In this case Dell provides high quality computer systems at the lowest price to
match the customer’s expectation of value for money.
 It is also able to supply products at low price by cutting out all costs of
manufacturing parts as well as costs associated with retailers and distributors.
 As pricing remains a major factor in the customer’s buying decision, Dell uses the
internet to get a reasonably accurate idea of the market’s supply and demand,
hence reflecting on its price changes and promotions.

PROMOTION
 Promotion is the most important component of the four P’s so it is crucial to
understand and be able to promote a product.
 Here it can be seen how Dell uses many different promotional methods to
market their products, such as advertising on television, on the internet, in
magazines and newspapers as well as direct mail ad campaigns.
 It even uses sponsorships in professional sports as well as product placements in
films and television in the marketing techniques.
 REFERENCE
https://pestleanalysis.com/pest-analysis-of-dell-
technologies/
https://www.mbaskool.com/pestle-
analysis/companies/18004-dell.html
http://gdhomeworkgvcu.ioptout.org/tows-matrix-of-dell-
laqotaw8410.html
http://fernfortuniversity.com/term-papers/swot/1433/1100-
dell.php
https://www.scribd.com/document/360450972/Company-
Analysis-DELL
https://sanjeevkainwal.wordpress.com/2012/12/11/segmen
tation-targeting-and-positioning-of-dell/
https://www.scribd.com/doc/54192372/Report-on-Dell-
Company

CONCLUSION
At the end of this report, I would like to say that this work has
been done by going through several articles, research papers
and slides. This report of DELL Company contains all the
necessary processes and facts which can explain a lot about the
company and its growth.