Dell Computers

1. Describe Dell's industry. Cover driving forces and key success factors.

Computers are a very attractive industry that is always expanding and growing. It is a very profitable industry but has many competitors. The industry size is large and new companies are emerging at a constant rate, but Dell has continued to grow since its founding in 1984. The degree of this industry is global and the market continues to expand and grow as the years goes on. The pace of technology change continues to be fast and product innovation is improving among computer companies.

Dell has 5 key driving forces that give them a competitive advantage.

* Every team member's goal is to provide a superior customer experience through efficiency and operational excellence.

* They believe strongly in treating people--customers, partners, suppliers, and each other--fairly, openly, and respectfully.

* They believe in participating responsibly in the global marketplace; we are committed to understanding and respecting national laws, values and cultures; promoting a healthy business climate globally and contributing positively in every community we call home.

* They believe our highly-skilled team is our greatest asset, and we cultivate and reward leadership, diversity, and contributions to the success of the entire team

* They have a passion for excellence, leading the markets we serve, and providing superior shareholder return over time.

Also their key success factors are:

* They have the ability to produce a line of high-performance products compatible with the accepted competitor's standards.

* They receive input from its customers regarding their products and services, their views on various products and response to advertising. This input gives it a competitive advantage in offering products and services and communication programs to meet its customers' needs.

* They have the ability to maintain efficient manufacturing operation because they have low inventory as they make the machines to customers' orders and not to dealer's forecast.

* Also selling directly to consumers and keeping its costs lower than those of other hardware vendors

2. Porter 5 factor competitive model for Dell's industry. What does it say about competition? Who are the chief competitors?

Threat of entry +4

Intensity of rivalry +5

Substitute products +4

Bargaining power of buyers +4

Bargaining power of suppliers +3

Dell has many competitors. IBM is currently the industry leader and none of its competitors are in a position to steal its control over the industry. Gateway is Dell's closest competitor in the personal computer market. Hewlett-Packard and Apple also provide a strong competition in the personal computer market.

3. Do a SWOT Analysis for Dell. How strong are they?

Strength

No inventory buildup

Industry leading growth

Cost efficiency

Direct to customer business model - latest technology

Customization

Internet sales leadership

Weakness

Dell is a functional company. This is a weakness because of the company's rapid growth. No proprietary technology

High dependency on component suppliers

Opportunities

Growth in business, education and government markets

Network-internet, intranet and extranet

Strong potential market in Europe, China and India

Low costs and advanced technology

The growing market for personal computers

Threat

Growing too rapidly may lead to a change in Dell's strategies

Competitors such as IBM and Compaq Computer Corp. has stronger brand names, which put Dell