Porters five forces: Threat of new entrants Low for laptops as the assembly and the availability of parts

ts are restively difficult and the integration process is complicated. High for desktops as the availability of parts and their assembly is very easy. Low product differentiations among the brands also acts against the existing players. Bargaining power of suppliers Moderate for some products like monitors, mouse, keyboards as they have many suppliers which make their bargaining power very limited For high tech products like processors and graphic cards, there are limited suppliers which make their bargaining power higher. Bargaining power of buyers High as there is availability of many brands and also the presence of large number of unorganised players. The differentiating factor is the cost and after sales service provided which a brand to emerge out of crowd. Threat of substitutes From the past 2 years, there have been many alternatives to PCs such as smartphones and tablets. These pose a serious threat to the traditional form of computing devices and this can be seen in developed markets where the sales of mobile computing devices have surpassed that of the PCs. In case of India, the PC penetration is still very low so the threat of substitutes is limited. Dell is also present in these segments put they have limited popularity.

Competition within the industry There is very high level of competition among all the players in this industry primarily because of low product differentiation and presence of large number of unorganised players. Even for mobile computing devices like smart phones and tablets, many brands are present and also the availability of Chinese products makes this segment very competitive.

SWOT Analysis of DELL Strengths 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. Dells direct customer allows it to provide top-notch customer service before and after the sale. Dell boasts a very efficient procurement, manufacturing and distribution process allowing it to offer customers powerful systems at competitive prices. 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. Weaknesses Computer maker and not the computer manufacturer, making DELL unable to switch supply. Dells focus on the corporate and government institutional customers somehow affected its ability to form relationships with educational institutions. For home users, Dells direct method and customization approach posed problems. For one, customers cannot go to retailers because Dell does not use distribution channels. Customers just cant buy Dell as simply as other brands because each product is custombuilt according to their specifications and this might take days to finish. Opportunities Diversification strategy by introducing many new products to its range. 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 Dells custom-built computers because as their knowledge grows, so do their need to experiment or use some additional computer features. The internet also provides Dell with greater opportunities since all they have to do now is to visit Dells website to place their order or to get information. Threats The biggest threat to Dell is of competition. It faces stiff competition which HP which was the market leader of India for almost more than 5 years. New entrants to the market pose potential threats. The threat to become out-dated is a vibrant reality in a computer business. Price difference among brands is getting smaller.

Dells Direct Model attracts customers because it saves cost. Since other companies are able to offer computers at low costs, this could threaten Dells price-conscious growing customer base.

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. STP Analysis for DELL Segmentation Every set of customer has different demands. A college student would prefer a gaming PC while a businessman would prefer one with robust processing power and networking capabilities. DELL, since its early days have been ahead of its peers in determining the customer needs and delivering the best. For the ease of targeting and positioning, DELL has identified four key businesses Home, Small and medium business, public sector and large businesses. Each of the segments has its own set of characteristics pertaining to the customer needs, volumes, ticket size and the competition. The home users market is highly perception driven as the customers are individual users and the requirements are vague. For e.g. A student might just go on outer look and feel of the product viz a viz a businessman who will do cost and ROI analysis for the investment he is making on buying computers for his/ her office. Even in the businesses, there are large businesses which have a different technological requirement than small businesses. For e.g. A large business can afford latest technologies and has complex networking requirements. On the other hand, small businesses will need a system to get simple things like billing and accounting done. The public sector is another ball game altogether with the tenders and payment mechanism peculiar to the segment. By dividing its markets in these four segments, DELL has managed to put greater focus on delivering the products as per the need of the segment. Targeting After segmenting the market into different sub groups, it is essential for any marketer to determine its target customer base in each of the selected segments and devise marketing strategy to attract and retain customers in the same. DELL for this purpose has done extensive market research to identify its target customer base and position its products accordingly. Being a intensely competitive market,

computer makers cant afford to leave any of the above mentioned segments untouched. Thus, DELL has come up with variety of products for users in each of the segments. For home users Dell started positioning itself aggressively around 2006 when Indian economy was scaling heights with its robust GDP growth of over 9% for the past three years. At the same time, a new generation was ready to join higher education and workforce with a new energy and new found means of making money early in life. DELL was quick to make the most of the opportunity and decided to focus on youth in the beginning by opening kiosks in malls and electronic stores. Targeting youth took DELL to households which in turn helped DELL attract older customers with different demands. For small businesses Small businesses generally use computers for day to day operations than high end analytics. Thus the requirement of the segment in terms of processing power is not as stringent as large corporate. Considering the fact, DELL has positioned its range of latitude and XPS series of laptops. For public sector As most of the universities, research institutes and educational institutions are run by government in India, public sector is a very vast segment for technology companies operating in India. DELL has untapped the potential in the segment by collaborating with universities, urban local bodies and research institutes to provide tailor made solutions for academic and research initiatives. For large corporate With the changing times, large corporate are focusing more on analytics to streamline their operations and to add every possible basis point of margins to their profitability. The needs from large corporate are equally complex such as cloud computing and use of advance applications. DELL has effectively targeted the segment by enhancing its technological capabilities through strategic alliances and acquisitions. Positioning Differentiation Dell clearly differentiates itself from its peers through its unique ordering and delivery mechanism, faster access to changing technology and after sales service. Strategic alliances Collaboration has always been a peculiar characteristic for the IT industry and Computer hardware industry in particular.

DELL though differentiates itself from its peers on the basis of above stated factors; the fact remains that no one from DELL or its peers can manufacture a whole computer on their own. DELL thus has to collaborate with different OEMs to deliver the quality desired by the customers. To list a few, following are DELLs strategic alliances:Microsoft No hardware can work without software. Similarly, no DELL can work without OS and thats where Microsoft comes into the picture. Apart from operating system, DELL systems run office suite and host of other applications from Microsoft. Intel / AMD Processors are the brains of computers. Having a long standing alliance with processor manufacturers help companies get faster access to changing technology. However, the new technology in the processors is evenly distributed among players in the industry. Though so, DELL gets a slighter edge over its customers in terms of access to the technology as it can provide effective feedback to processor manufacturers very quickly than its peers due to its close ties with its customers. NVIDIA DELL continuously tries to deliver products for each target group. The likes of graphic designers and gamers focus on having the latest graphic technologies and DELL deliver it through its ties with the above mentioned companies. McAfee In todays world, Anti-virus is a must for all computers. DELL provides an option to the customers to get one through its ties with McAfee. Brand Communication Dell has a mix of marketing tools ranging from print media to TV media. They specifically target the audience with their ads. In their latest ad, they innovatively target all their audience by showcasing a laptop skin for each of them. This has been done to make the brand more funky and stylish. In their print ads, they just showcase their product with the price point. This communicates the product value and cost effectiveness which really works in Indian context. Competitor Analysis According to Gartner, in 4th quarter of 2010, Dell had shipped 13 percent of all the PC shipments in India which climbed by over 3.7 percentage points in Q1 2011 (Est.). During the same time, HP lost exactly same amount of market share and fell from 15.80% to 12.10% in Q1, 2011!

Total PC Market Growth in India The combined desk-based and mobile PC market in India totaled nearly 2.6 million units in the first quarter of 2011, a 6.2 per cent increase over the same quarter last year. This growth was mainly driven by Mobile PCs (Laptops/Notebooks), while the Desktop PC sales have shown negative growth. Mobile PC shipments grew 23 percent in the first quarter of 2011, as compared to the first quarter of 2010. All the vendors registered double digit growths in Mobile PC shipment numbers. PC Vendor Market Share QoQ Vendor Dell HP Acer Lenovo HCL Others Q4 2010 13% 15.80% 10.70% 9.60% 7.80% 43.10% Q1 2011 16.70% 12.10% 11.90% 9.70% 7.10% 42.50%

Acer, the 3rd placed vendor in India witnessed 1.20 percentage point jump in shipments over last quarter. While Lenovo more or less kept its market share, HCL saw a drop in its market share