Report On Dell Company

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Project Report On:
Dell Company
Submitted To:
Mr. Shahid Mehmood
Submitted By:
Mr. Imtiaz Ali
Roll No: 79
Mr. Arslan Ayub
Roll No: 58
BS-Commerce (Evening)
Session: 2007-2011
Department of Commerce
Project Report on Dell Company

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Preface
The primary function of this report is to share the process of
learning and knowledge which I underwent during my research on
this project. The purpose of this report is to enhance personal skills
and knowledge about the compilation of data and information
about an organization into a summarized form. The organization
chosen is a multinational organization. The report focuses on the
putting together or composing from materials gathered from many
sources.

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Executive Summary
Masters in commerce is a professional degree. According to the
nature of our subject which is a credit one, the research is being
undertaken on Dell Company. One of the world’s leading
corporation.
Dell computer corporation was established in 1984 and today ranks
among the world’s largest computer systems company. Dell
serving the selling of personal computers directly to customers,
providing direct toll free technical support and on site services.
Dell offers build to order computer systems to customers. Dells
complete range of high-performance computer systems include:
Dell Dimension and OptiPlex desktop computers, Latitude
notebook computers, and Power Edge network servers.
This report covers the contents of current and past overview of dell
company, its offerings, financial analysis and many more.

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“ Experience is not what happens to you, it is what you do with what

happens to you.”
-Aldous Huxley
Acknowledgement:
By the grace of Allah who has provided me with the skills and
abilities to be able to complete this report and present a clear
picture of what I have been doing during the course of my project.
I would firstly like to thank the Department of Commerce for
making this learning experience a part of our education and
specifically thanks to Mr. Shahid for his advice and assistance in
helping us avail this opportunity.
I would like to thank all those who helped me for the entire course
of my project, my group fellows who cooperated me throughout
the project and became my one of the best companions.

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DEDICATED TO:
MY BELOVED
PARENTS
AND
RESPECTABLE
TEACHERS

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Table of Contents
Introduction 08
Dell Inc. 08
History 10
Products 13
Scope and Brands 13
Organization 14
Competitors 15
Dell’s Strategy 16
Business Level Strategy 17
Total Quality Management 18
Corporate Level Strategy 19
Second or Late Mover Strategy 22
Mission & Vision Statement 23
Mission Statement 23
Vision Statement 24
Financial Analysis 25
Financial Statements 25
Income Statement 25

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Balance Sheet 27
Cash Flow 31
Ratio Analysis 34
Competitive Analysis 36
Positioning Strategy Analysis 36
Product/Service Strategy Analysis 36
Pricing Strategy 36
Distribution Strategy Analysis 37
SWOT Analysis 38
Strength 38
Weakness 39
Opportunity 40
Threat 41
References 43

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Introduction
Dell Inc. is an American multinational information technology
corporation based in Round Rock, Texas, United States, that
develops, sells and supports computers and related products and
services. The founder of Dell Inc. is Micheal Dell. This is one of
the world’s largest corporation employing more than 103,300
employees worldwide. As of 2009, the company sold personal
computers, servers, data storage devices, network switches,
software’s and computer peripheral devices. The company is well
known for its innovation.
Dell Inc.
Public
NASDAQ: Dell
Type
HKEX: 4331
S&P 500 Component
Industry Computer Systems

Computer Peripherals

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Computer Software
IT consulting
IT services
Austin, Texas
Founded
November 4, 1984
Founder(s) Michael Dell
1 Dell Way
Headquarters
Round Rock, Texas, U.S.[1]
Area served Worldwide
Michael Dell
Key people
(Chairman & CEO)
Desktops
Servers
Notebooks
Netbooks
Peripherals
Products
Printers
Televisions
Scanners
Storage
Smart Phones
Revenue $61.49 billion (2011)[2]
Operating income $3.43 billion (2011)[2]
Net income $2.63 billion (2011)[2]
Total assets $38.59 billion (2011)[2]
Total equity $5.64 billion (2011)[2]
Employees 103,300 (2011)[2]
Dell Services
Subsidiaries
Alienware
Website Dell.com

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History
Micheal Dell being the founder of Dell Inc. transformed his idea in
to reality in 1984. He was student in University of texas, Austin,
when he realized that selling personal computers directly to
customers may fulfill the needs of them in order to providing pcs’
according to there expactations. With an initial capital of $300,000
he commenced his business of PCs limited.
In 1985, the company produced the first computer of its own
design “Turbo Pc” sold for US $795. The company advertised its
system in National Computer Magazines for its selling of PCs’
directly to consumers, assembled according to their needs. For the
very first year of its business the company grossed $75 million.

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The company changed its name to "Dell Computer Corporation" in
1988 and began expanding globally, first in Ireland. In June 1988,
Dell's market capitalization grew by $30 million to $80 million
from its June 22 initial public offering of 3.5 million shares at
$8.50 a share. In 1992, Fortune magazine included Dell Computer
Corporation in its list of the world's 500 largest companies, making
Michael Dell the youngest CEO of a Fortune 500 company ever.
In 1996, Dell began selling computers via its web site, and in 2002,
Dell expanded its product line to include televisions, handhelds,
digital audio players, and printers. Dell's first acquisition occurred
in 1999 with the purchase of ConvergeNet Technologies. In 2003,
the company was rebranded as simply "Dell Inc." to recognize the
company's expansion beyond computers. From 2004 to 2007,
Michael Dell stepped aside as CEO, while long-time Dell
employee Kevin Rollins took the helm. During that time, Dell
acquired Alienware, which introduced several new items to Dell
products, including AMD microprocessors. To prevent cross-
market products, Dell continues to run Alienware as a separate
entity but still a wholly owned subsidiary.

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On August 16, 2010, Dell announced its intent to acquire the data
storage company 3PAR. On September 2, 2010 Hewlett-Packard
offered $33 a share, which Dell declined to match.

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Products
Scope and brands
Its Business/Corporate class represent brands where the company

advertises emphasizes long life-cycles, reliability, and
serviceability. Such brands include:
• OptiPlex (office desktop computer systems)

• Vostro (office/small business desktop and notebook
systems)
• n Series (desktop and notebook computers shipped with
Linux or FreeDOS installed)
• Latitude (business-focused notebooks)
• Precision (workstation systems and high-performance
notebooks),
• PowerEdge (business servers)
• PowerVault (direct-attach and network-attached storage)
• PowerConnect (network switches)
• Dell/EMC (storage area networks)
• EqualLogic (enterprise class iSCSI SANs)
Dell's Home Office/Consumer class emphasizes value,

performance, and expandability. These brands include:
• Inspiron (budget desktop and notebook computers)

• Studio (mainstream desktop and laptop computers)
• XPS (high-end desktop and notebook computers)
• Studio XPS (high-end design-focus of XPS systems and
extreme multimedia capability)
• Alienware (high-performance gaming systems)
• Adamo (high-end luxury laptop)
Dell's Peripherals class includes USB keydrives, LCD televisions,

and printers; Dell monitors includes LCD TVs, plasma TVs and
projectors for HDTV and monitors. Dell UltraSharp is further a
high-end brand of monitors.

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Organization
A board of directors of nine people runs the company. Michael
Dell, the founder of the company, serves on the board. Other board
members include Don Carty, William Gray, Judy Lewent,
Klaus Luft, Alex Mandl, Michael A. Miles, and Sam Nunn.
Shareholders elect the nine board members at meetings, and those
board members who do not get a majority of votes must submit a
resignation to the board, which will subsequently choose whether
or not to accept the resignation.
The board of directors usually sets up five committees having
oversight over specific matters. These committees include the
Audit Committee, which handles accounting issues, including
auditing and reporting; the Compensation Committee, which
approves compensation for the CEO and other employees of the
company; the Finance Committee, which handles financial
matters such as proposed mergers and acquisitions; the
Governance and Nominating Committee, which handles various
corporate matters (including nomination of the board); and the
Antitrust Compliance Committee, which attempts to prevent
company practices from violating antitrust laws.

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The corporate structure and management of Dell extends beyond
the board of directors. The Dell Global Executive Management
Committee sets strategic directions. Dell has regional senior vice-
presidents for countries other than the United States, including
David Marmonti for EMEA and Stephen J. Felice for
Asia/Japan. As of 2007, other officers included Martin Garvin
(senior vice president for worldwide procurement) and Susan E.
Sheskey (vice president and Chief Information Officer).
Competitors
Dell's major competitors include:
• Hewlett-Packard (HP)
• Acer
• Toshiba
• Gateway
• Sony
• Asus
• Lenovo
• IBM
• Samsung
• Apple
• Sun Microsystems.

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Dell and its subsidiary, Alienware, compete in the enthusiast
market against AVADirect, Falcon Northwest, VoodooPC (a
subsidiary of HP), and other manufacturers.
Dell’s strategy
Dell's business strategy is a successful cost leadership strategy.
The company's formula for success has been based upon its unique
customization, delivery, and cost proposition. In reaction to
faltering performance and the need to pursue new growth
opportunities, a dual-strategic approach is required to confront
rapidly changing market conditions. First, Dell must integrate its
cost leadership skills with differentiated product features and
related services to create value for its customers and achieve the
benefits of an integrated cost leadership/differentiation strategy.
Additionally, becoming a diversified IT company opens up
opportunities in related businesses, where similar products, buying
processes, target customers, or other operationally-related activities
can produce synergies. This business-level and corporate-level
strategy combination offers Dell a method of dealing with the
company's competitive realities. Both strategies are discussed
below.

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Business-Level Strategy
Customer expectations in the industry have created a growing
demand for low-priced, differentiated products. As a result, Dell
needs to be able to perform primary and support activities that
simultaneously yield low costs and differentiated features, or an
integrated cost leadership/differentiation strategy. The
objective of using this strategy is to efficiently produce products
with attributes that boost product quality or performance. Efficient
production is the source of maintaining low costs, while
differentiation is the source of unique value. Successful use of an
integrated cost leadership/differentiation strategy has the added
benefit of building skills that can help Dell adapt more quickly to
new technologies and rapid changes in the external environment.
Simultaneously concentrating on developing two sources of
competitive advantage (cost and differentiation) increases the
number of primary and support activities in which the company
must become competent, which contributes to greater flexibility.
Flexible manufacturing systems, information networks, and total
quality management systems can also yield a more flexible
organization. Each type of initiative should be considered by Dell
as it tries to balance the objectives of continuous cost reductions
and continuous product enhancements.

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Dell already utilizes a customized assembly process based upon a
FMS to fill customer orders. To increase flexibility, the company
should look for ways to enhance the effectiveness of information
networks (linking the supply chain through to the customer) to
improve work flow and communication among employees to
identify and resolve problems that emerge. Improvements in
information linkages would prove particularly beneficial as Dell
seeks to improve services for its corporate customers.
Total quality management (TQM) is another managerial
innovation that emphasizes an organization’s total commitment to
the customer and to continuous improvement of every process
through the use of data-driven, problem-solving approaches based
on empowerment of employee groups and teams. The development
and use of TQM systems at Dell would align actions with the
company's strategic needs and would concurrently serve to (1)
increase customer satisfaction, (2) cut costs, and (3) reduce the
amount of time required to introduce innovative products to the
marketplace. All of these objectives have been identified as critical
factors that will influence Dell's future success.
TQM systems result in the enhancement of innovative abilities, the
ability to exceed customers’ quality expectations (differentiating
the company from its competitors), and the elimination of process

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inefficiencies to cut costs (allowing Dell to offer better performing
features at the relatively low prices expected by its customers).
Thus, an effective TQM system will help Dell develop the
flexibility needed to identify opportunities to implement its
integrated cost leadership/differentiation strategy. Because TQM
systems are available to all competitors, they may help the
company maintain competitive parity, but rarely will they
unilaterally lead to a competitive advantage.
Corporate-Level Strategy
A corporate-level strategy specifies actions a firm takes to gain a
competitive advantage by selecting and managing a group of
different businesses competing in different product markets.
Corporate-level strategies help companies select new strategic
positions to increase the firm’s value. They are also a means to
grow revenues and profits.
By 2006, Dell has already diversified from a purely desktop PC
provider to operating in the following additional product
categories: mobility, server, storage, printer, enhanced services,
software, and consumer electronics. More than thirty percent of its
revenue is generated outside of its dominant business. Because of
this ratio and because there are existing links between its
diversified businesses, a related constrained diversification

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strategy is being employed. With a related constrained
diversification strategy, Dell will be able to expand the value of its
resources and capabilities by sharing activities and exploiting
economies of scope between its businesses. Available to
companies operating in multiple product markets or industries,
economies of scope are cost savings that the firm creates by
successfully sharing some of its resources and capabilities
(operational relatedness) or by transferring one or more corporate-
level core competencies that were developed in one of its
businesses to another of its businesses (corporate relatedness). To
create economies of scope both tangible resources (such as plant
and equipment or other physical assets) and intangible resources
(such as knowledge or other bases of core competencies) can be
shared. In at least two ways, the related linked diversification
strategy can help Dell create value. First, because a core
competence has already been developed (and paid for) in one of
the company’s businesses, transferring it to a second business
eliminates the need for that second business to allocate resources to
develop it. Resource intangibility is a second source of value
creation through corporate relatedness. Intangible resources are
difficult for competitors to understand and imitate. Because of this
difficulty, the unit receiving a transferred corporate-level

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competence often gains an immediate competitive advantage over
its rivals. One thing to keep in mind, however, is that it can be
difficult for investors to actually observe the value created by a
firm as it shares activities and transfers core competencies. For this
reason, the value of Dell's assets being used to create economies of
scope may be discounted by investors.
Dell's business model became successful in the PC industry as
personal computers gained acceptance in the market. The
company's growth was achieved by taking away share from
industry leaders and "commodifying" the product. Rather than
being the market leader in other consumer electronic products
(HDTV, digital cameras, etc.) when new product prices are high
and consumers are doing extensive research prior to the purchase
(needing retail outlets to touch and feel the product), Dell's place
might be to jump into the market as consumer electronic products
begin to transition into commodities. The company can be
prepared to capture the second wave or tier of consumers who have
not adopted new technologies and products until prices lower and
technology becomes accepted (capturing the market after the
product/technology is proven, offering low prices, great quality,
new features, and complementary services at this time).

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This second (or late) mover strategy is a competitive response to
first movers' competitive actions and is typified by imitation.
Taking the time to monitor customer reaction to product
innovations and avoiding the mistakes and costs of new product
introductions are compatible with Dell's successful business
model. The approach also provides Dell with time to develop more
efficient processes and technologies or create additional value for
consumers.
Overall, the outcomes of first mover competitive actions can
provide an effective blueprint for Dell's late mover approach,
especially as the consumers get comfortable with making
investments in new technologies and begin to equate dependable
quality and good value with the Dell brand. It is also going to be
important for Dell to properly scale its aging businesses (such as
PC's) to the size of the replacement market. [Of course, the
company should always continue to look for advancements that
might breathe life into mature products - such as it has done by
turning home PC's into media centers).

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Mission and Vision Statement
Dell Mission Statement

"To be the most successful computer company in the
world at delivering the best
customer experience in markets we serve."
Dell
Mission Statement
Dell’s mission is to be the most successful Computer Company in
the world at delivering the best customers experience in markets
we serve. In doing so, Dell will meet customer expectations of:
• Highest quality
• Leading technology
• Competitive pricing
• Individual and company accountability
• Best-in-class service and support
• Flexible customization capability
• Superior corporate citizenship
• Financial stability

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Vision Statement
It’s the way we do business. It’s the way we interact with the
community. It’s the way we interpret the world around us. Our
customers needs, the future of technology, and the global business
climate. Whatever changes the future may bring our vision. Dell
Vision will be our guiding force.
So Dell needs full customers satisfaction. In order to become the
most successful computer company, they need the newest
technology and loyal customers.

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Financial Analysis: Financial Statements: Income Statement
Currency in As of: Feb 01 Jan 30 Jan 29 Jan 28

Millions of 2008 2009 2010 2011
U.S. Dollars USD Reclassified Reclassified USD
USD USD
61,133.
Revenues 61,101.0 52,902.0 61,49 4.0
0
61,133.
TOTAL REVENUES 61,101.0 52,902.0 61,494.0
0
49,462.
Cost of Goods Sold 49,998.0 43,404.0 50,041.0
0
11,671.
GROSS PROFIT 11,103.0 9,498.0 11,453.0
0
Selling General &

Admin Expenses, 7,446.0 6,966.0 6,227.0 7,234.0
Total
R&D Expenses 610.0 665.0 617.0 653.0
OTHER
OPERATING 8,056.0 7,631.0 6,844.0 7,887.0
EXPENSES, TOTAL
OPERATING
3,615.0 3,472.0 2,654.0 3,566.0
INCOME
Interest Expense -45.0 -93.0 -160.0 -199.0
Interest and
496.0 180.0 57.0 47.0
Investment Income
NET INTEREST
451.0 87.0 -103.0 -152.0
EXPENSE
Currency Exchange -30.0 115.0 -59.0 4.0

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Gains (Loss)
Other Non-Operating
-48.0 -58.0 12.0 -13.0
Income (Expenses)
EBT, EXCLUDING
3,988.0 3,616.0 2,504.0 3,405.0
UNUSUAL ITEMS
Merger &
Restructuring -92.0 -282.0 -482.0 -61.0
Charges
Gain (Loss) on Sale

14.0 -10.0 2.0 6.0
of Investments
Other Unusual Items,

-83.0 -- -- --
Total
In Process R&D
-83.0 -- -- --
Expenses
EBT, INCLUDING
3,827.0 3,324.0 2,024.0 3,350.0
UNUSUAL ITEMS
Income Tax Expense 880.0 846.0 591.0 715.0
Earnings from
Continuing 2,947.0 2,478.0 1,433.0 2,635.0
Operations
NET INCOME 2,947.0 2,478.0 1,433.0 2,635.0
NET INCOME TO
COMMON
2,947.0 2,478.0 1,433.0 2,635.0
INCLUDING EXTRA
ITEMS
NET INCOME TO 2,947.0 2,478.0 1,433.0 2,635.0

COMMON
EXCLUDING EXTRA

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ITEMS
Balance Sheet

Millions of 2008 2009 2010 2011
U.S. Dollars USD Reclassified Reclassified USD
USD USD
Assets
Cash and Equivalents 7,764.0 8,352.0 10,635.0 13,913.0
Short-Term
208.0 740.0 373.0 452.0
Investments
TOTAL CASH AND

SHORT TERM 7,972.0 9,092.0 11,008.0 14,365.0
INVESTMENTS
Accounts Receivable 5,961.0 4,731.0 5,837.0 6,493.0
TOTAL
5,961.0 4,731.0 5,837.0 6,493.0
RECEIVABLES
Inventory 1,180.0 867.0 1,051.0 1,301.0
Prepaid Expenses 370.0 447.0 539.0 374.0
Finance Division
Loans and Leases, 1,732.0 1,712.0 2,706.0 3,643.0
Current
Deferred Tax Assets,

596.0 499.0 444.0 558.0
Current
Restricted Cash 294.0 213.0 147.0 25.0
Other Current Assets 1,775.0 2,590.0 2,513.0 2,262.0

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TOTAL CURRENT 19,880.

20,151.0 24,245.0 29,021.0
ASSETS 0
Gross Property Plant

4,614.0 4,510.0 4,652.0 4,729.0
and Equipment
Accumulated
-1,946.0 -2,233.0 -2,471.0 -2,776.0
Depreciation
NET PROPERTY
PLANT AND 2,668.0 2,277.0 2,181.0 1,953.0
EQUIPMENT
Goodwill 1,648.0 1,737.0 4,074.0 4,365.0
Long-Term
1,560.0 454.0 782.0 704.0
Investments
Finance Division
Loans and Leases, 407.0 500.0 332.0 799.0
Long Term
Deferred Tax Assets,

485.0 568.0 237.0 75.0
Long Term
Other Intangibles 780.0 724.0 1,694.0 1,495.0
Other Long-Term
133.0 89.0 107.0 187.0
Assets
27,561.
TOTAL ASSETS 26,500.0 33,652.0 38,599.0
0

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LIABILITIES & EQUITY
11,492.
Accounts Payable 8,309.0 11,373.0 11,293.0
0
Accrued Expenses 3,534.0 3,009.0 2,865.0 3,077.0
Short-Term Borrowings 25.0 113.0 663.0 851.0
Current Portion of Long-Term

200.0 -- -- --
Debt/Capital Lease
Current Income Taxes Payable 99.0 6.0 426.0 529.0
Other Current Liabilities, Total 690.0 721.0 593.0 575.0
Unearned Revenue, Current 2,486.0 2,701.0 3,040.0 3,158.0
18,526. 14,859.
TOTAL CURRENT LIABILITIES 18,960.0 19,483.0
0 0
Long-Term Debt 362.0 1,898.0 3,417.0 5,149.0
Unearned Revenue, Non-

2,774.0 3,000.0 3,029.0 3,518.0
Current
Other Non-Current Liabilities 2,164.0 2,472.0 2,605.0 2,683.0
23,826. 22,229.
TOTAL LIABILITIES 28,011.0 30,833.0
0 0
10,589. 11,189.
Common Stock 11,472.0 11,797.0
0 0

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18,199. 20,677.
Retained Earnings 22,110.0 24,744.0
0 0
- -
Treasury Stock 25,037. 27,904. -27,904.0 -28,704.0
0 0
Comprehensive Income and

-16.0 309.0 -37.0 -71.0
Other
TOTAL COMMON EQUITY 3,735.0 4,271.0 5,641.0 7,766.0
TOTAL EQUITY 3,735.0 4,271.0 5,641.0 7,766.0
TOTAL LIABILITIES AND 27,561. 26,500.

33,652.0 38,599.0
EQUITY 0 0

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Cash Flow

Millions of U.S. 2008 2009 2010 2011
Dollars USD Reclassified Reclassified USD
USD USD
NET INCOME 2,947.0 2,478.0 1,433.0 2,635.0
Depreciation &
596.0 666.0 647.0 620.0
Amortization
Amortization of Goodwill
11.0 103.0 205.0 350.0
and Intangible Assets
DEPRECIATION &
AMORTIZATION, 607.0 769.0 852.0 970.0
TOTAL
Asset Writedown &

83.0 -- -- --
Restructuring Costs
Provision & Write-off of

187.0 310.0 429.0 382.0
Bad Debts
Change in Accounts -
480.0 -660.0 -707.0
Receivable 1,086.0
Change in Inventories -498.0 309.0 -183.0 -248.0
Change in Accounts
837.0 -3,117.0 2,833.0 -151.0
Payable
Change in Unearned 1,032.0 663.0 135.0 551.0

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Revenues
Change in Other
-241.0 -421.0 -1,354.0 228.0
Working Capital
CASH FROM
3,949.0 1,894.0 3,906.0 3,969.0
OPERATIONS
Capital Expenditure -831.0 -440.0 -367.0 -444.0
Sale of Property, Plant,

-- 44.0 16.0 18.0
and Equipment
-
Cash Acquisitions -176.0 -3,613.0 -376.0
2,217.0
Investments in
Marketable & Equity 1,285.0 749.0 155.0 -2.0
Securities
CASH FROM -
177.0 -3,809.0 -1,165.0
INVESTING 1,763.0
Short-Term Debt Issued -- 100.0 76.0 --
Long-Term Debt Issued 66.0 1,519.0 2,058.0 3,069.0
TOTAL DEBT ISSUED 66.0 1,619.0 2,134.0 3,069.0
Short Term Debt

-100.0 -- -- -176.0
Repaid
Long Term Debt Repaid -165.0 -237.0 -122.0 -1,630.0
TOTAL DEBT REPAID -265.0 -237.0 -122.0 -1,806.0
Issuance of Common
136.0 79.0 2.0 12.0
Stock

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Repurchase of -
-2,867.0 -- -800.0
Common Stock 4,004.0
Other Financing
-53.0 -- -2.0 2.0
Activities
CASH FROM -
-1,406.0 2,012.0 477.0
FINANCING 4,120.0
Foreign Exchange Rate

152.0 -77.0 174.0 -3.0
Adjustments
NET CHANGE IN -
588.0 2,283.0 3,278.0
CASH 1,782.0

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Ratio Analysis
Ratio data TTM as of 01/28/2011
PROFITABILITY - DELL INC (DELL)
Return on Assets Return on Equity

Industry Comparison Industry Comparison
6.17% 39.31%
Return on Capital
Industry Comparison
18.98%
MARGIN ANALYSIS - DELL INC (DELL)
Gross Margin EBITDA Margin

18.62% 7.38%
ASSET TURNOVER - DELL INC (DELL)
Total Assets Turnover Accounts Receivables Turnover

1.7x 10.0x
Fixed Assets Turnover Inventory Turnover

29.8x 42.6x

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CREDIT RATIOS - DELL INC (DELL)
Current Ratio Quick Ratio

1.5x 1.3x
LONG-TERM SOLVENCY - DELL INC (DELL)
Total Debt/Equity
Industry Comparison Total Liabilities/Total Assets
Industry Comparison
77.3x
79.9x
Not meaningful
Competitive Analysis

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Positioning Strategy Analysis
Dell’s unique selling proposition has always been defined by its
direct business model. Its founder, Michael Dell, lead the way
using the direct-sales approach for computers. Dell has a simple
formula: “eliminate the middleman and sell for less” (Hoovers).
Dell keeps it simple by providing customers with built-to-order
boxes that help with lower inventories, lower costs, and higher
profit margins.
Products/Services Strategy Analysis
Dell is the major player in the personal computer industry and its
aim is to market both PCs and Non-PCs related products to the
consumers. It uses to target its market the differentiated approach.
Such as it provides the products to the markets according to the
needs to consumers, as according to home, health, government,
small and large scale markets etc. It differentiates its products from
others which is the key point to target its market.
Pricing Strategy
Dell made $18.2 billion in revenue with a net profit margin of 8%.
In 2006 their revenue was almost tripled to $55.9 billion, but with
a lower net profit margin of 6.4%. Dell’s net income has almost
constantly risen throughout the years, due to their highly

37
competitive cost structure. Their elimination of the middleman
keeps their costs low and profits high.
Distribution Strategy Analysis
Dell’s main factory is located in Texas with its regional
headquarters in Texas, Tennessee, and Brazil. Dell always tries to
centralize its headquarters to where it can provide the service to its
customers in timely and effective manner. Dell’s location has
helped the company organize its distribution model. When Dell
Americas operations were expanded, Dell chooses middle
Tennessee because the transportation infrastructure allowed Dell to
reach 70% of its customer base within twenty-four hours by
ground. With the Internet and the phone as its biggest distribution
channel, Dell is able to reach customers faster and with its
distribution network streamlined it can meet each customer’s
demand successfully and speedily.
All these strategies not only made possible for Dell Inc. to be
among the world’s leading Corporations in the Computer Industry
but 38th largest Corporation in United States.
SWOT Analysis of Dell Computer

38
Strengths
Dell's Direct Model approach of enables the company to offer
direct relationships with customers such as corporate and
institutional customers. Their strategic method also provides other
forms of products and services such as internet and telephone
purchasing, customized computer systems; phone and online
technical support and next-day, on-site product service. This
extensive range of products and services is definitely one of Dell’s
strengths.
Dell Computer's award-winning customer service, industry-leading
growth and consistently strong financial performance differentiate
the company from competitors for the following reasons:
Price for Performance – Dell boasts a very efficient procurement,
manufacturing and distribution process allowing it to offer
customers powerful systems at competitive prices.
Customization - Each Dell system is built in order to meet each
customer’s specifications.
Reliability, Service and Support – Dell’s direct customer allows it
to provide top-notch customer service before and after the sale.

39
Latest Technology – Dell is able to introduce the latest relevant
technology compared to companies using the indirect distribution
channels. Dell turns over inventory for an average of every six
days, keeping inventory costs low.
The company's application of the Internet to other parts of the
business --including procurement, customer support and
relationship management -- is growing at a rate of 30 percent. The
company's Web site received at least 25 million visits at more than
50 country-specific sites.
Weaknesses
Dell’s biggest weakness is attracting the college student segment
of the market. Dell’s sales revenue from educational institutions
such as colleges only accounts for a measly 5% of the total. Dell’s
focus on the corporate and government institutional customers
somehow affected its ability to form relationships with educational
institutions. Since many students purchase their PCs through their
schools, Dell is obviously not popular among the college market
yet.
For home users, Dell’s direct method and customization approach
posed problems. For one, customers cannot go to retailers because

40
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
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.
Demand for laptops is also growing. As a matter of fact, demand
for laptop has overtaken the demand for desktops. This is another
opportunity for Dell to grow in other segments.
The internet also provides Dell with greater opportunities since all
they have to do now is to visit Dell’s website to place their order or
to get information. Since Dell does not have retail stores, the
online stores would surely make up for its absence. It is also more
convenient for customers to shop online than to actually drive and
do purchase at a physical store.
Threats

41
In a volatile market such as personal computers, threats abound.
Computers change in a constant sometime daily basis. New
software, new hardware and computer accessories are introduced
at a lightning speed. It is essential for Dell therefore to be always
on the lookout for new things or introduce new computer systems.
The threat to become outmoded is a pulsating reality in a computer
business. Not only that, companies must produce products that are
high in quality but low in price. This is one challenge that Dell
contends with.
One of the biggest external threats to Dell is that price difference
among brands is getting smaller. Dell’s Direct Model attracts
customers because it saves cost. Since other companies are able to
offer computers at low costs, this could threaten Dell’s price-
conscious growing customer base. With almost identical prices,
price difference is no longer an issue for a customer. They might
choose other brands instead of waiting for Dell’s customized
computers.
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

42
substitutes to be able to continue holding a significant market
share.
Technological advancement is a double-edge sword. It is an
opportunity but at the same time a threat. Low-cost leadership
strategy is no longer an issue to computer companies therefore it is
important for computer companies to stand out from the rest.
Technology dictates that the most up-to-date and fastest products
are always the most popular. Dell has to always keep up with
technological advancements to be able to compete.
References
www.scribd.com/doc/19235366/Dell-Notes-Strategy
en.wikipedia.org/wiki/Dell

43
www.alacrastore.com/.../GlobalData_Company_Reports-
Dell_Inc_Financial_and_Strategic_Analysis_Review-2087-1578
i.dell.com/sites/content/corporate/secure/.../FY09_SECForm10K.pdf
finapps.forbes.com/finapps/jsp/finance/.../Ratios.jsp?tkr=DELL
www.suite101.com/.../swot-analysis-of-dell-computers-a92597
content.grin.com/document/v57007.pdf
www.grin.com/e-book/57007/the-dell-company-a-strategic-analysis

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1

Project Report On:

Mr. Shahid Mehmood

Mr. Imtiaz Ali

Mr. Arslan Ayub

Project Report on Dell Company

The primary function of this report is to share the process of

learning and knowledge which I underwent during my research on

this project. The purpose of this report is to enhance personal skills

and knowledge about the compilation of data and information

about an organization into a summarized form. The organization

chosen is a multinational organization. The report focuses on the

putting together or composing from materials gathered from many

Project Report on Dell Company

Masters in commerce is a professional degree. According to the

nature of our subject which is a credit one, the research is being

undertaken on Dell Company. One of the world’s leading

Dell computer corporation was established in 1984 and today ranks

among the world’s largest computer systems company. Dell

serving the selling of personal computers directly to customers,

providing direct toll free technical support and on site services.

Dell offers build to order computer systems to customers. Dells

complete range of high-performance computer systems include:

Dell Dimension and OptiPlex desktop computers, Latitude

notebook computers, and Power Edge network servers.

company, its offerings, financial analysis and many more.

Project Report on Dell Company

“ Experience is not what happens to you, it is what you do with what

abilities to be able to complete this report and present a clear

picture of what I have been doing during the course of my project.

I would firstly like to thank the Department of Commerce for

making this learning experience a part of our education and

specifically thanks to Mr. Shahid for his advice and assistance in

helping us avail this opportunity.

of my project, my group fellows who cooperated me throughout

the project and became my one of the best companions.

Project Report on Dell Company

Project Report on Dell Company

Scope and Brands 13

Business Level Strategy 17

Total Quality Management 18

Corporate Level Strategy 19

Second or Late Mover Strategy 22

Mission & Vision Statement 23

Project Report on Dell Company

Positioning Strategy Analysis 36

Product/Service Strategy Analysis 36

Distribution Strategy Analysis 37

Project Report on Dell Company

Dell Inc. is an American multinational information technology

corporation based in Round Rock, Texas, United States, that

develops, sells and supports computers and related products and

services. The founder of Dell Inc. is Micheal Dell. This is one of

the world’s largest corporation employing more than 103,300

employees worldwide. As of 2009, the company sold personal

computers, servers, data storage devices, network switches,

software’s and computer peripheral devices. The company is well

known for its innovation.

Industry Computer Systems

Project Report on Dell Company

Founder(s) Michael Dell

Area served Worldwide