The Strategic Analysis for Global Business @Dell Corporation

Question: Discuss about the Strategic Analysis of Dell Corporation for Global Business. Answer: Introduction Dell Technology is a privately held technology company founded in the year 2016 after the merger of Dell Inc with EMC. The company was founded by Michael Dell and all its operations are allied from Round Rock, Texas, United States. Dell computers deals in selling, repairing and supported computers related products and services. It is known worldwide for its innovation services, supply chain management and providing configured system to the customers (Company Heritage, 2016). EMC combined with Dell on 7 September 2016 to form Dell Technologies which marked as the biggest deal in the history. The accompany employs 140,000 people around the globe which makes it worlds largest technology company. Dell, Dell EMC, Pivotal Software, Secure Works and VMware are its subsidiary company (Technology Solutions Powerhouse, 2016). The company has earned revenue of $54.9 Billion in the fiscal year end January 29, 2016(Americas largest Private Company, 2016). Dell has earned a fiscal profit of $ 13.1 billion for the year 2017. There is a 32% of increase in the revenue from the previous year (FY17 Q2 Financial Results Press, 2016). Dell started its operations in Singapore in the year 1996 and has employed 1000 people to meet the demand in the field of IT solution. It focuses on merging individual competencies to function world-wide. It has the first Dell solution Center which provides technology support and design worldwide (Getting to know Dell Singapore, 2016). External analysis Pestle analysis Pestle analysis describes the macro factors which affect the strategy implementation. This tool is used to access the market research and gives the overview of the different factors which helps in understanding the business position potential. The analytical tool helps in understanding the political, economic, social, technological, environmental, and legal factors which affect the company while developing a strategic alliance (Dransfield, 2004). Dell technology has multiple operations around the world. It is essential for a company to access the PESTLE analysis before developing a strategy to conquer the outside world (Schmid et al. 2006). P (Political) These are the political issue a company faces when developing an international alliance. Global expansion of business involves understanding of the political environment in the host country. Every country has a different political arrangement which affects the strategies while considering cross-border transactions. For example some countries have restricted the sale of foreign technology. It is necessary to conduct a political research while expanding operations in the international market (Shirani, 2013). E (Economic) The economies of the nation possess major threat to the growth of the technology products. In a rich economy technology is given more preference. Strategic alliances are favorable under dynamic economy. Demography of a country is a key factor to manage the economy. Wealth distribution is an essential key to understand the economy of the country. A country with fewer sources has less purchasing power. It is recommended to expand after considering the economic power (Shirani, 2013). S (Social) Society is posing a major issue on the future growth of the technological gadgets. Increasing popularity of various social networking sites has posed a threat on the social atmosphere. Different demography possesses challenge over the consumers attitude. Social challenges play a pivotal role in making expansion plans. The company needs to focus on the social challenges to adopt long run growth. T (Technological) Technology is developing at a faster rate with time. It is essential to work as per the technology which is guaranteed. Dell corporation is competing with international brands like HP and Lenovo. Technology can only help in distinguishing the features with the rest of the world. A company can only survive if it has adopted the global changes and needs (Neild and Carysforth, 2004). L (Legal) Legal environment is necessary to be given importance to pursue main motive of the organization. Legal compliances are crucial to be fulfilled while diversifying the operations to other country. The legal framework of every country is different which creates difficulty. E (Environmental) The world has realized the importance of environment. Technology is posing a danger to the environment. Dell technology can pose various threats to environment. Various countries have incorporated serious environmental law to safeguard themselves against recent environmental changes. Environment has caused serious issues. Dell has to adopt stringent plans while developing the environment. company 2016 shipments 2016 market share Lenovo 13,198 20.5 HP Inc 12,284 19.1 Dell 9,788 15.2 The above mentioned report suggests that there was a fall of 5% in computer shipment. Lenovo and HP together shared 40%of market whereas Dell was at third place with 15.2% market share. The PC marked has seen a fall in recent times but there are hope to witness growth by 2018. (Ghosh, 2016) Porters five forces model Porters five forces model focuses on the understanding the strength of the business under current position. It focuses on building strong model considering all the essentials into the working model (Roy, 2011). Supplier power High There are large number of supplier for the hardware components in the market which creates a high level of switching cost Buyer power High Presence of end number of brands has created a high pressure on the company. The company needs to focus on providing high class customer services to retain the customers from switching from one brand to other. Dell is providing the best service against its competitor which has created a brand loyalty in the mind of the customers. Competitive rivalry High The price margin between the rival companies is very low which has created a low price margin. However the competitive strategies have helped it to gain huge market share. It has proved that Dell business strategies are one of the best Threat of substitutes Low Dell has high presence in the market due to its reliable features. Low cost has made its presence everywhere in the world. Threat of new entry Moderate Market is subject to fluctuation. It has subjected to the threat of new entry. Globalization has reduced the legal barriers across the borders which has led to entry of various competitors in the market who provides goods at a very low cost( Hill and Jones,2007) External analysis VRIO analysis This tool is used to analyze various dimensions to make strategically decisions against its competitor. VRIO stands for Value, Rareness, Imitability, Organization (Grnig and Khn,2015). DELL Corp. Valuable Rare Inimitable Organization Personalized customer pt Yes Yes No Yes Customer Relationship Yes Yes No Yes Distribution services Yes Yes No Yes Peng, M. (2016). Personalized customer part: dell is known worldwide for creating a personalized customer parts. Dell corp. is known for compiling the system as per the choice of its customers. This provides the company with a cutting edge against the other brands. Customer relationship: Dell ensures customer satisfaction by giving quick services. They give priority to customer relationship by taking care of the customers needs. There is no other brand in the market which can imitate the customer services as provided by the competitor brands. Distribution services: Dell corp. is focused on providing the best distribution services. The company has distribution channels at different places. They are known for providing the non imitable distribution services within the economy. SWOT analysis SWOT analysis is used to analyze the strength, weakness, opportunities and threats. This analytical tool is essential to understand the potential threats and opportunities. It takes all the necessary information from the surroundings and helps in deciding the external factors which can affect the working of an organization (Ferrell and Hartline, 2010). Strengths The brand value of dell corp. after merging with EMC is at over $60 billion (Su, 2016).Dell is the market leader in the field of technology innovation. Enigmatic and effective leadership by Michael dell has added a cutting edge with the brand. The brand is known for providing customized products to its customers. Their business model is as per the environmental norms. Dell is based on the direct selling model. The company has a competency on merger and acquisitions. Weakness Their customer services are poor as compare to the other competitive brands. Dell has made a very low investment in the research and development process. The patents portfolios are week when compared with the brands like apple, HP, and Lenovo The retail locations are very few in the market. The customer services are poor as compare with the other brands. Low product differentiation . Opportunities Dell needs to make an investment on the research and development process. It has an ample of opportunities in the field of merger and acquisition. This will create opportunities in the field of technology innovations. Dell should diversify its product range by entering into smart phone and tablet industry. There is an increase in the opportunities due to emerging market trends. Threats Emerging economies has created competition inside the organization. Data privacy security is causing a major threat on the brand. A low price brand in the market has created difficulty for the brand. There is a decline in the current desktop and laptop market ( Schneider,2014). Strategic option Strategic options are the recent changes the world is facing in the business practices due to external factors. The external factors have exposed the organization to the risk. SWOT analysis helps in analyzing the risk which is attached with the organization. Strategic options are the various opportunities available with the organization to assess the threats. The various strategic options are acquisition, merger, offensive/defensive strategies, strategic alliance; diversification etc. Dell Corporation has recently seen a change in its internal structure. The company has recently merged with EMC. It is the biggest tech merger in the history which amounted $ 67 billion (Cornelissen, 2004). Research innovation Research innovation is an essential tool for accelerating growth in the competitive environment. However excess investments in the research and development would minimize its core competency. It will create a pressure over the company to create multiple distribution channels to redirect the availability of resources. Dell strength is to make mass sale without making much investment in the research and development. Innovation is a necessary for dell to improve over the recent changes. There are many competitors in the market which are providing better services so it is necessary to make a difference in the mind of the consumer by improving on the current technology. Technology is changing with each passing day which is posing serious competition. Dell needs to put its resources in the strategic research and development of resources instead of bulk production. Research and technology is gaining importance as per the recent trends. The company should stay on focusing of its research and development services to create the difference in the technology industry. This will increase the overall potential of the company. Its world-wide recognizable name will help it in expanding into other markets (Dells Cooling Innovation For Scale-Out Computing,2016). Diversification There is a need to diversify the resources to other projects in order to achieve a sustainable growth. Dell has concentrated its resources in mass production of computer goods. Many of its competitors have already diversified its production into other category. Dell by far has concentrated in the market for the production of mass computer goods whereas brands like HP and Lenovo has diversified its market by producing tablets and mobile phones. Dell needs to diversify its assets into other segments to procure large profits. However it is late for a company to take a big step where there are already various brands which are already doing well in the market. Dell has to diversify its production strategies into other fields which will help it to grow. The acquisition of EMC with Dell is important in point of view of technology. The technology is developing at a rapid speed where other competitive brands are fighting hard for their survival. Dell needs to focus on the strategy as per the latest market trends and atmosphere. Acquisition Technology competency is essential while following various models. The latest acquisition in the internal structure has helped the company to grow with the joint support. Acquisition strategy helps in creating a competitive difference. The merger of big brands in market helps in accomplishing the desired goals. Merger of EMC and Dell are seen as a big market changer by the technologists. Recommendation Dell should focus on building relationship with the customers. This will help it to grow on a long run. It is seen in the past that the company which do not have better relationship with the customers and its partners fail. Dell should diversify its profits and revenue to create competitive advantage over other brands. The company is recommended to reduce the overall cost by introducing the favorable plans in its system. Today market requires diversification of asset in order to serve the purpose. The international market has created ample of opportunity with dynamic changes. Diversification would help in improving the overall expansion of the core benefit. Creating partnership with the leading technology brands will help Dell in overcoming the upcoming issues. Conclusion Dell Corporation is a famous computer brand in the market which is providing services round the world. The report discusses the internal and external analysis of the company strategies and what strategy it should adopt to compete with its competitors. Dell should focus on bringing innovation in its technology services by making investments into its research and development. It should focus on emphasizing in its core strength which will help it to grow on a long run. Todays market is based on diversification of the assets. Multiple companies are focusing on the different technologies to procure the benefit. Dell is recommended to diversify its assets to procure maximum benefit through its strategies. References Americas largest Private Company, (2016). (Online) Available from: https://www.forbes.com/companies/dell/ (Accessed on 26/09/16) Company Heritage,(2016) (Online) Available from: https://www.dell.com/learn/sg/en/sgcorp1/about-dell-company-timeline (Accessed on 26/09/16) Cornelissen,J.(2004). Corporate Communications: Theory and Practice. 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