1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7.

External Factors evaluation Matrix's 8. CPM 9. Grand Strategy 10. QSPM

End Show 5-1

E15
Dell Strategy Formulation Analytical Frame Work And Financial Statement Analysis

Introduction of Dell
Dell, Inc. is an American 1. Income multinational information Statement 2. Balance Sheet technology corporation based in 1 3. Ratio Analysis Dell Way, Round, Texas, United 4. Space States, that develops, sells and Matrix's 5. BCG Matrix's supports computers and related 6. Internal products and services. Bearing the External Matrix's IFE name of its founder, Michael Dell, 7. External Factors the company is one of the largest evaluation technological corporations in the Matrix's 8. CPM world, employing more than 9. Grand Strategy 103,300 people worldwide. Dell is 10. QSPM listed at number 41 in the Fortune 500 list.
End Show 5-2

Vision and Mission

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM

Vision Statement: "Dell is committed to being a good neighbor in the communities we call home. We must continue to grow responsibly protecting our natural resources and practicing sustainability in all its forms and improve the communities where we live and work through our financial and volunteer efforts."

MISSION STATEMENT:
Dell's mission is to be the most successful Computer Company in the world at delivering the best customer 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

9. Grand Strategy 10. QSPM End Show

5-3

Income Statement
DELL INC.

1. Income (in millions) Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Income Statement: Matrix's 5. BCG Matrix's Net revenue Cost of revenue 6. Internal External Gross margin Matrix's IFE SG&A 7. External R&D Factors evaluation Total operating expenses Matrix's Operating income 8. CPM 9. Grand StrategyInvestment and other income, net Income before taxes 10. QSPM
Income tax provision

Statement of Operations

Annual Results
FY09 FY10 FY11

$61,101 50,144 10,957 7,102 665 7,767 3,190 134 3,324 846 2,478

$52,902 43,641 9,261 6,465 624 7,089 2,172 (148) 2,024 591 1,433

$61,494 50,098 11,396 7,302 661 7,963 3,433 (83) 3,350 715 2,635

End Show 5-4

Net income

Balance Sheet
DELL INC.
Statement of Financial Position
(in millions)

1. Income Statement Assets: 2. Balance Sheet Cash & cash equivalents 3. Ratio Analysis Short-term investments Accounts receivable, net 4. Space Financing receivables, net Matrix's Inventories, net 5. BCG Matrix's Other Total current assets 6. Internal PP&E, net Investments External Matrix's IFE Long-term financing receivable, net Other non-current assets 7. External Total assets: Liabilities & Stockholders Equity: Factors Short-term borrowings evaluation Accounts payable Matrix's Accrued and other 8. CPM Short-term deferred services revenue 9. Grand Strategy Long-term debt 10. QSPM Long-term deferred services revenue
Other non-current liabilities Total liabilities: Total current liabilities

Annual Results
FY09 FY10 FY11

$8,352 740 4,731 1,712 867 3,749 20,151 2,277 454 500 3,118 26,500

$10,635 373 5,837 2,706 1,051 3,643 24,245 2,181 781 332 6,113 33,652

$13,913 452 6,493 3,643 1,301 3,219 29,021 1,953 704 799 6,122 38,599

113 8,309 3,736 2,701 14,859 1,898 3,000 2,472 22,229 4,271 26,500

663 11,373 3,884 3,040 18,960 3,417 3,029 2,605 28,011 5,641 33,652

851 11,293 4,181 3,158 19,483 5,146 3,518 2,686 30,833 7,766 38,599

End Show 5-5

Stockholder's equity: Total liabilities & equity:

Ratios Analysis
DELL INC.
Selected Financial Data & Ratios

1. Income (Unaudited) Statement Yearly results for liquidity, Profitability, Solvency, and Activity Ratios 2. Balance Sheet FY09 3. Ratio AnalysisLiquidity: Net working capital ratio 5292 4. Space Current ratio 1.356 Matrix's Quick ratio 1.30 0.611 5. BCG Matrix's Cash Ratio Activity Ratios: 6. Internal Account Receivable Turnover Ratio 12.91 External # of Days Account Receivable outstanding 28.27 Matrix's IFE Fixed Assets turnover ratio 26.83 Inventory turnover ratio 57.83 7. External Average # of days inventory outstanding 6.31 Factors Operating Cycle 64.14 evaluation Total Assets turnover Ratio 2.305 Matrix's Profitability: Return on Investment 0.28% 8. CPM 9. Grand Strategy Operating margin 10. QSPM Return on Assets
Net profit margin Solvency Ration: Gross margin 17.93% 5.44% 3.83% 4.05%

(in millions, except per share data and ratios)

FY10

FY11

5285 1.278 1.22 0.58

9538 1.489 1.42 0.737

10.01 36.46 24.25 45.50 8.02 53.53 1.57

19.55 18.67 31.48 42.60 5.56 51.16 1.59

0.12% 17.50% 3.82% 2.11% 2.70%

0.17% 18.53% 5.44% 2.84% 4.28%

End Show 5-6

Debt Ratio Debt to equity ratio

0.838 5.2

0.832 4.96

0.798 3.97

Common Size Analysis

Vertical Analysis
1. Income Statement Income Statement: 2. Balance Sheet Net 3. Ratio Analysis revenue 4. Space Cost of revenue Matrix's 5. BCG Matrix's Gross margin 6. Internal SG&A External Matrix's IFE R&D 7. External Total operating expenses Factors evaluation Operating income Matrix's 8. CPM Investment and other income, net 9. Grand Strategy Income before taxes 10. QSPM
Income tax provision FY09 FY10 FY11

$61,101 50,144 10,957 7,102 665 7,767 3,190 134 3,324 846 2,478

100% 82 18 12 1 13 5 0 5 1 4

$52,902 43,641 9,261 6,465 624 7,089 2,172 -148 2,024 591 1,433

100 82 18 12 1 13 4 0 4 1 3

$61,494 50,098 11,396 7,302 661 7,963 3,433 -83 3,350 715 2,635

100 81.46811 18.53189 11.87433 1.074902 12.94923 5.582658 -0.13497 5.447686 1.162715 4.284971

End Show 5-7

Net income

Horizontal Analysis Balance sheet

Dell Incorporation Horizontal Analysis of Balance sheet FY09 Assets: Cash & cash equivalents $8,352 740 4,731 1,712 867 3,749 20,151 2,277 454 500 3,118 26,500 $100 100 100 100 100 100 100 100 100 100 100 100 $10,635 373 5,837 2,706 1,051 3,643 24,245 2,181 781 332 6,113 33,652 27.33 -49.59 23.37 58.06 21.22 -2.83 20.31 -4.21 72.02 -33.6 96.05 26.98 $13,913 452 6,493 3,643 1,301 3,219 29,021 1,953 704 799 6,122 38,599 30.82 21.17 11.23 34.62 23.78 -11.63 19.96 -10.45 -9.85 140.66 0.147 14.7 FY10 FY11

1. Income Short-term investments Statement Accounts receivable, net 2. Balance Sheet Financing receivables, net Inventories, net 3. Ratio Analysis Other 4. Space Total current assets Matrix's PP&E, net 5. BCG Matrix's Investments Long-term financing receivable, net 6. Internal Other non-current assets External Total assets: Matrix's IFE Liabilities & Stockholders Equity: 7. External Short-term borrowings Factors Accounts payable evaluation Accrued and other Matrix's Short-term deferred services revenue Total current liabilities 8. CPM 9. Grand StrategyLong-term debt Long-term deferred services revenue 10. QSPM Other non-current liabilities
Total liabilities:

113 8,309 3,736 2,701 14,859 1,898 3,000 2,472 22,229 4,271 26,500 100

100 100 100 100 100 100 100 100 100 5,641 100

663 11,373 3,884 3,040 18,960 3,417 3,029 2,605 28,011 32.08 33,652

486.72 36.87 3.96 12.55 27.59 80.03 0.96 5.38 26.01 7,766 26.98

851 11,293 4,181 3,158 19,483 5,146 3,518 2,686 30,833 37.67 38,599

28.35 -0.703 7.64 3.88 2.75 50.59 16.14 3.109 10.07

End Show 5-8

Stockholder's equity: Total liabilities & equity:

14.7

SPACE MATRIX
1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM 9. Grand Strategy 10. QSPM
End Show 5-9

Boston consulting group or BCG matrix

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors Region evaluation Matrix's 8. CPM

Relative market Share

Asia
Revenues Profit Percentage of Revenue 66.94% 21.922% 11.133% 100% Growth rate Relative e Market Share 75% 20% 10% 95%

9. Grand Strategy Europe 10. QSPM

End Show 5-10 Total

Americas

$32,940M $10,787M $5,478M $49,205M

$2,978M $818M $458M $4,254M

21% 61% 29% 100%

Asia-Pacific

SPACE MATRIX
Conservative
1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM 9. Grand Strategy 10. QSPM
End Show 5-11 FS
6 5 4

CONT.
Aggressive

CA

-6

-5

-4

-3

-2

-1 -1

IS

-2

-3

-4

-5

Defensive

-6

Competitive

ES

THE INTERNAL-EXTERNAL (IE) MATRIX

Th e IFE To t a l Weigh t ed Sco r e
Strong 3.0 to 4.0 High 3.0 to 3.99 Americas Europe I Average 2.0 to 2.99 II

The EFE Tot al W eight ed Scor e

Weak 1.0 to 1.99 III

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM

Medium 2.0 to 2.99

IV

VI

Dell
Low 1.0 to 1.99 Asia-Pacific VII VIII IX

9. Grand Strategy 10. QSPM

End Show 5-12

Hold and Maintain

THE INTERNAL-EXTERNAL (IE) MATRIX CONT.

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM 9. Grand Strategy 10. QSPM
End Show 5-13 Region Revenues Profit Percentage of Revenue IFE Score

Americ as

$32,940M

$2,978M

66.94%

3.5

Europe

$10,787M

$818M

21.922%

2.8

AsiaPacific

$5,478M

$458M

11.133%

1.2

Total

$49,205M

$4,254M

100%

EXTERNAL FACTOR EVALUATION (EFE) MATRIX Key External Factors

Weight Rating

Weighted Score

Opportunities
Demand for personal computers continues to grow. Many customers switching from desktops to notebooks 1. Income Statement Microsoft desires to partner with Dell. 2. Balance SheetConsumer electronics is a profitable business. 3. Ratio Analysis Higher consumer spending in the US. 4. Space Incorporated managed and professional services. Matrix's 5. BCG Matrix's Global enterprise systems. Training and certification program. Financial services offered. 6. Internal Growth in the color printer market. External Matrix's IFE Threats Alliance in the PC industry 7. External Higher oil prices could crimp consumers spending. Factors Commercial demand fails to accelerate. evaluation Matrix's Competitors are strong. Slow growth in the PC market. 8. CPM Component price fluctuation 0.100 0.050 0.100 0.050 3 4 4 2 0.300 0.200 0.400 0.100

0.025 0.025

2 2

0.050 0.050

0.050 0.025 0.025 0.025

3 2 3 2

0.150 0.050 0.075 0.050

0.050 0.050

3 3

0.150 0.150

0.025 0.150 0.100 0.025 0.025

2 3 2 4 3

0.050 0.450 0.200 0.100 0.075

9. Grand Strategy for computing power has decreased. Price 10. QSPM
Computer market has broadened. Currency fluctuations in the international markets.

0.050 0.050

3 2

0.150 0.100

End Show
TOTAL 1.00 2.85

5-14

Competitive Profile Matrix's

Apple Critical Weight Rating Weighte d Score 0.10 0.10 0.15 0.15 0.15 0.04 0.06 0.06 0.14 0.05 1.00 2 2 3 4 4 4 4 2 4 3 0.20 0.20 0.45 0.60 0.60 0.16 0.24 0.12 0.56 0.15 3.02 3 3 4 3 2 2 3 2 2 2 Rating HP Weighted Score 0.30 0.30 0.60 0.45 0.30 0.08 0.18 0.12 0.28 0.10 2.71 4 4 3 3 3 3 3 3 2 3

Dell
Rating Weighted Score 0.40 0.40 0.45 0.45 0.45 0.12 0.18 0.18 0.28 0.15 3.06

1. Income Success Statement Factors 2. Balance Sheet Market Share 3. Ratio Analysis Price 4. Space Financial Matrix's 5. BCG Matrix's Position Product Quality 6. Internal Consumer External Matrix's IFE Loyalty 7. External Advertising Factors Management evaluation Global Matrix's Expansion 8. CPM 9. Grand Strategy 10. QSPM
End Show 5-15

Total

GRAND STRATEGY MATRIX

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM 9. Grand Strategy 10. QSPM
End Show 5-16

Dell have competitive advantage over HP and Apple on the basis on the IFE Matrixs and competitive profile matrix's but it have a very low profit and revenue in the Asia Pacific region their it is suggested that that company.

Market penetration Product development Forward integration Backward integration Horizontal integration Related diversification

QSPM
Strategic Alternatives Key Internal Factors Weight Build another manufacturing plant in the US. Expand marketing efforts in Asia and Europe

1. Income Statement 2. Balance Sheet Strengths 3. Ratio Analysis Built-to-order personal computers sold directly to customers. 4. Space Direct sales via mail, phone orders, and the Internet. Matrix's 5. BCG Matrix's Built-to-order personal computers eliminate markups of 6. Internal resellers. External Built-to-order personal computers greatly reduce the costs Matrix's IFE and risks associated with carrying large stocks of parts, components, and finished goods. 7. External Factors Dell is the current PC industry leader. evaluation Matrix's Dell has regional and manufacturing plants globally. 8. CPM 9. Grand StrategyDell is a well-known brand name. 10. QSPM
Dells direct-to-consumer strategy has given the company a substantial cost and profit margin over its rivals.

AS 0.100 ---

TAS ---

AS ---

TAS ---

0.050

---

---

---

---

0.025

---

---

---

---

0.050

---

---

---

---

0.100

3.0

0.300

2.0

0.200

0.050

1.0

0.050

4.0

0.200

0.050

4.0

0.200

3.0

0.150

0.050

---

---

---

---

End Show 5-17

QSPM
on these sales and service relationships.

strengths and weakness (cont.)

0.025 1.0 0.025 2.0 0.050

Dell has a good relationship with the companys large corporate and government customers and continues to focus

1. Income Statement 2. Balance SheetDell holds 29.1% of the total market for personal computer 3. Ratio Analysissales in the Americas, putting Dell ahead of its competitors. 4. Space Dells built-to-order manufacturing process results in rapid Matrix's inventory turnover and reduced inventory levels. 5. BCG Matrix's To ensure defect free products, testing is performed by Dell 6. Internal along the process and on the final computer product. External Matrix's IFE Dell has a wide range of customers including large corporations, government agencies, healthcare, educational 7. External institutes, small business, and individuals. Factors evaluation Dell is ranked # 1 by Technology Business because of its IntelMatrix's based server satisfaction for 27 of the past 29 quarters. 8. CPM
Dell 9. Grand Strategy divides its sales and marketing force among the various customer groups in order to meet each groups specific 10. QSPM needs. Dell advertises its products on the Internet, TV, and by mailing

0.050

3.0

0.150

2.0

0.100

0.050

---

---

---

---

0.050

---

---

---

---

0.050

4.0

0.200

3.0

0.150

0.050

---

---

---

---

0.025

---

---

---

---

0.025

---

---

---

---

End Show 5-18

a broad range of marketing publications.

QSPM
Weaknesses

strengths and weakness (cont.)

1. Income Dell has only two manufacturing plants and one Statement regional office in the United States. 2. Balance Sheet Dell computers cannot be purchased in retail 3. Ratio Analysis stores. 4. Space Dell has over 40 locations globally yet Dell is not Matrix's 5. BCG Matrix's the #1 supplier in Asia Pacific, European, Middle East, or African segments. 6. Internal External Dell rebrands printers purchased from Lexmark, Matrix's IFE which is a major production cost for Dell. 7. External Factors evaluation Matrix's Dell is too reliant on foreign suppliers, because of 8. CPM this a disruption of fuel supply could make the 9. Grand Strategyprice of shipping go up. 10. QSPM
grow at the same pace.

0.025

4.0

0.050

2.0

0.050

0.025

---

---

---

---

0.050

1.0

0.050

4.0

0.200

0.025

---

---

---

---

0.050

3.0

0.150

1.0

0.050

Dell is so large now that it might not be able to

0.025

1.0

0.025

2.0

0.050

End Show
SUBTOTAL 1.00 1.20 1.20

5-19

QSPM
Key External Factors

strengths and weakness (cont.)

Weight Build another manufacturing Expand marketing efforts in Asia and Europe

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM

plant in the US.

Opportunities Demand for personal computers continues to grow. 0.100

AS 2.0

TAS 0.200

AS 4.0

TAS 0.400

Many consumers switching from desktops to notebooks.

0.050

---

---

---

---

Microsoft desires to partner with Dell. Consumer electronics is a profitable business.

0.100 0.050

--3.00

--0.150

--1.0

--0.050

9. Grand Strategy Higher consumer spending in the US. 10. QSPM

Incorporated managed and professional services.

0.025 0.025

3.00 ---

0.075 ---

1.0 ---

0.025 ---

End Show 5-20

QSPM
Global enterprise systems.

strengths and weakness (cont.)

0.050 0.025 0.025 0.025 2.0 ------0.100 ------4.0 ------0.200 -------

Training and certification program.

1. Income Statement 2. Balance Sheet 3. Ratio Analysis 4. Space Matrix's 5. BCG Matrix's 6. Internal External Matrix's IFE 7. External Factors evaluation Matrix's 8. CPM

Financial services offered. Growth in the color printer market. Threats Alliance in the PC industry Higher oil prices. Commercial demand fails to accelerate. Competitors are strong. Slow growth in the PC market. Component price fluctuation Price for computing power has decreased. Computer market has broadened. Currency fluctuations in the international markets.

0.050 0.050 0.025 0.150 0.100 0.025 0.025 0.050 0.050

2.0 ----2.0 --------1.0

0.100 ----0.300 --------0.050

4.0 ----3.0 --------3.0

0.200 ----0.450 --------0.150

SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE

1.00

0.98 2.18

1.48 2.68

9. Grand Strategy Add two new manufacturing plants in the United States has the 10. QSPM
End Show 5-21

attractive score of 2.18 in comparison of the expending the business into Europe and Asia which has total attractive score of 2.68. Expand into Europe and Asia building new manufacturing plants and retail stores is therefore that the company should introduce