Dell Case Study Challenges Facing essay

Download this essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from essay:

In particular, Wyse gave Dell a better foothold in the sprawling segment of cloud computing. This area has helped companies save money through the delivery of affordable services and software over internet-based infrastructures (Ignatiuk, 2008).

Dell will also benefit from the prior experience of Silver Lake expertise that has revived several tech companies such as Skype. This wrenching would typically change Silver Lake to be tricky for a public corporation anxious to help shareholders not to panic. If such challenging maneuvers were dealt with, it would assist Dell under the covers (Bamford & West, 2010). While this is true, it is clear that taking Dell private will not solve the strategic web of troubles surrounding the company. The company will still be forced to ensure it swings the axe carefully in light of PC segments. This is because Dell will require cash to help service the enormous debt. In addition, Dell's margins could be squeezed tighter by rivals companies in Asia that have beaten Dell in the industry by maintaining low costs via effective supply chain management. In addition, Dell would still lack a strong foothold in the segments for tablets and smartphones; growth in this industry depends on these segments (Kouzes & Posner, 2010).

Dell's prospects appear to be promising in the cloud computing market. However, the company is facing a lot of rivalry from giant rivals that made head-start in the industry although some of them have been struggling too. For instance, HP has been operating in turmoil because of its enormous write down in the Autonomy value, which is its latest acquisition. After Dell announcing its buy out plans, HP published that its competitors are currently battling an extended duration of transition and uncertainty that will have a negative impact on its customers (Flanagan, 2004).

Strategic and competitive position

Competitive position

A detailed analysis of Dell reveals its competitive position. As the main strategy, Dell uses product differentiation in the markets for PCs. With the direct marketing business model, Dell can provide a high level of customization to its clients on their PCs. Rival providers have challenges providing such product customization because retail chains play a critical in their market offerings. Initially, manufactures of PC s made the final decision about elements of PCs specifications. In the case of Dell, its direct sales model enables consumers to decide the specifications (Besanko, 2010). Dell offers customers with latest and updated versions of flexibility in terms of computer prices and components. Recently, the industry for PCs tends to drive down prices of computers. This has forced Dell to shift its strategies towards minimal cost to battle competition in the industry. In terms of supportive strategies, Dell has adopted the three: alliance, growth, and innovation. For profit maximization, Dell pursues innovative tactics in implementing information systems in cost cutting. Dell's growth is visualized through Dell's diversified product line. For alliance strategies, Dell had maintained positive connections with all its hardware suppliers. Good relationships allow the company to purchase computer accessories at relatively minimal costs. Dell's combination of these strategies enables them to maintain a competitive position in the industry, constantly providing the best product value for customers (Bamford & West, 2010).

Strategic position

The sales and marketing strategy for Dell involves selling its offerings directly clients, whether individuals or corporate. The company sales its products through telephone, official website, and established retailers such as Best buy and Wal-Mart in U.S. markets. Different marketing channels have enabled Dell to reach a wider clientele because the numerous channels are based on extensive distribution channels. This is true as Dell's desktop and notebook generates approximately sixty percent of the overall revenue every year (Flanagan, 2004).

Dell aims to achieve mass sales and mass production. R&D fosters its market penetration after products mature in their lifecycle. This means that Dell spends minimal money unlike rival firms such as Apple, which has a tendency of entering a market in the initiation phase. While such an approach has its drawbacks to first movers, the principal advantage Dell obtains from the strategy is the ability to avoid risks related to product failure besides the low profit margins. Unlike other players, such as HP, Apple, and IBM Dell makes minimum investment in research and development. Compared to HP, Dell spends one percent of its revenue on research and development while HP spends three percent and IBM seven percent. This is a justification to why Dell has approximately three thousand patents while HP has forty thousand patents (Cohen, 2004).

Some companies have tried to emulate Dell's business model without success. This has paved way for Dell to capture a greater market share in the PC market segment. While rival firms are busy duplicating Dell's business model, Dell is busy expanding in its application of direct sales and marketing model to incorporate other computing accessories and associated products (Bamford & West, 2010). Direct sales and marketing business model has generated expandability potentials for Dell. It cannot be underestimated for this reason.


Bamford, C.E., & West, G.P. (2010). Strategic management: Value creation, sustainability, and performance. Australia: South-Western Cengage Learning.

Besanko, D. (2010). Economics of strategy. Hoboken, NJ: John Wiley & Sons.

Cohen, W.A. (2004). The art of the strategist: 10 essential principles for leading your company to victory. New York: American Management Association.

Flanagan, R.M. (2004). Mayors and the challenge of urban leadership. Lanham [u.a.: Univ. Press of America.

Gunderson, D. (2006). The leadership paradox: A challenge to servant leadership in a power-hungry world. Seattle, WA: YWAM Pub.

Harpst, G. (2008). Six disciplines for excellence: Building small businesses that learn, lead, and last. Findlay, Ohio: Six Disciplines.

Ignatiuk, a. (2008). Analysis of Dell's business strategy. Mu-nchen [u.a.: GRIN-Verl.

Ireland, R.D., Hoskisson, R.E., & Hitt, M.A. (2012). Understanding business strategy: Concepts plus. Mason, OH: South-Western…[continue]

Cite This Essay:

"Dell Case Study Challenges Facing" (2013, July 21) Retrieved December 2, 2016, from

"Dell Case Study Challenges Facing" 21 July 2013. Web.2 December. 2016. <>

"Dell Case Study Challenges Facing", 21 July 2013, Accessed.2 December. 2016,

Other Documents Pertaining To This Topic

  • Fictional Case Study Fortsworth Company Has Made

    Fictional Case Study Fortsworth Company has made positive strides for itself despite the existing industry rivalry The use of key resources and abilities incorporating industry-leading design groups, talented hardware, and software engineers has bolstered the company's prospects (Aaker, 2008). Fortsworth Company cannot depend on its current glory since it may change any time It must invest in emerging and expanding markets as income sources (Russ, 2010). Regardless of the positive strides that Fortsworth Company has

  • Dell Mercosur Given How Dell Translates Its

    Dell Mercosur Given how Dell translates its foreign-currency financial statements into dollars, how would a falling Brazilian real affect Dell Mercosur's financial statements? What about a rising real? The falling real would help to improve Mercousur's financial statements. The reason why is because it made costs cheaper and increased profitability. A rising real would have a negative impact on the company, as it will cause their operating expenses to increase and profits

  • Dell Computers Presents a Useful Company to

    Dell Computers presents a useful company to perform a strategic management analysis upon. The personal computer industry has changed and evolved considerably in the past years and the market conditions today are also presenting new and exciting problems for this organization. The purpose of this essay is to examine Dell and its industry in terms of its current strategic outlook. The essay will present information on the personal computer industry,

  • Harvard Business Case

    Harvard Case Shouldice Hospital: A Case Study in Expansion The Shouldice Hospital, as it is described in the case analysis serving this discussion, is a highly progressive hernia treatment facility which not only specialized in this particular surgical procedure but which also provides a unique setting for convalescence. Through the promotion of ambulatory recovery and the creation of a context which is both clinically excellent and highly social, Shouldice offers a positive

  • Organizational Case Analysis

    Organizational Case Analysis Organization Overview Apple Inc. is a multinational companies specializing in the designing, manufacturing and marketing of mobile communication devices such as personal computers and digital music players. The company also sells varieties of mobile telecommunication devices such as iPhone, iPod, iPad, and Mac. Additionally, Apple Inc. sells some professional software application such as Mac OS, iOS, iCloud and other varieties of communication accessories. Apple Inc. sells its products through

  • ERP Systems Challenges of Enterprise

    Role-based ERP systems are critical for the siloed, highly inefficient architectures of legacy ERP systems to be made more relevant, contribute greater financial performance, and lead to higher levels of overall customer satisfaction. c. Purpose of the study The purpose the study is evaluate how enterprises who adopt role-based ERP system implementations are able to attain higher levels of financial and operations-based performance vs. those that rely on silo-based, more functionally

  • Organizational Development Fortsworth Company Fortsworth Manufacturers...

    Organizational Development Fortsworth Company Fortsworth Manufacturers designs and sells personal computers, software, related services, peripherals, and network solutions. The company also develops and markets portable digital music devices along with accompanying accessories such as an audio book, third party music, short films, music videos, and television shows. Primarily, this company operates across Japan, America and Europe with its headquarters in California. Vision The current vision of Fortsworth Company is to ignite the revolution in

Read Full Essay
Copyright 2016 . All Rights Reserved