Business Communication

DELL ANALYSIS

SWOT:

- Strengths:

• It is a company that has a great experience in the technological market because it has been working for more than 20 years in this sector.

• It is a company that has a great market power. It is one of the most important technological IT companies, it is known all over the world. Moreover it holds substantial portfolio of customers.

• Sell its products for a lower price than other competitor companies.

• Direct sale to the customer. Then it decreases costs and improves the communication with all its customers.

• Excellent Customer Support.

• It introduces latest technology in its products.

- Weaknesses:

• The enterprise competition is significantly increasing. Nowadays, the main competitors are Hewlett Packard and Apple.

• There is no investment in Research and Development. (I+D)

- Opportunities:

• It has a great market share in a lot of its products. (13% in the world and 23% in U.S.A)

• High interest for the latest technological products such us laptops, printers and others.

- Threats:

• A lot of companies are coming onto this market.

• Many companies are imitating similar products for very low prices.

• Saturated market.

PORTER:

- Threat of new entrants:

Entry barriers:

Applying a survey of Entry Barriers Industrial Sector, we conclude that the Entry Barriers are high, given the following arguments:

▪ Economies of Scale: In the industrial sector we can find economies of scale associated with face to face selling Computer, purchase orders based end consumer direct (without intermediaries). Producing savings in distribution channels.

▪ Product Differentiation: The market is poorly differentiated PCs and components are the same, the difference are in the brand, warranty and technical support associated with the product. And mainly immediately meet the needs of consumers.

▪ Capital Requirements: For the industrial sector, capital requirements are intended to Plan Marketing, Advertising, R & D, Sales, After Sales and Customer Service.

▪ Access to distribution channels: the non-use of resellers and direct sales (face to face) is not necessary to have distribution channels for products.

▪ Advantage independent cost: in industry positioned companies has a strong learning curve, preferential access to inputs, through strategic alliances with suppliers.

▪ Firms set their own resources to fight, established firms with assets of difficult disposition.

▪ Entrance fee: incoming companies should be able to match the cost structure of the companies positioned in order to sell at market prices. The companies have the ability to reduce the entry of a new competitor given to the efficient management of selling prices.

- Threat of substitute products or services:

The computer industry it is now almost impossible to find substitute products that have the same efficiency, effectiveness and profits. If you look under a more traditional approach would substitute products based on the various utilities that has a computer. For example the application of forms of calculation would be the calculator, documents, would the typewriter. Pressure from substitute products in this sector are low, due to the cost of change associated with a substitute who may have a lower price but lower efficiency and speed.

- Bargaining power of customers:

Between 1995 and 1997 Dell Computer applied a expansion targets customer segments. During this period, he realized it was necessary to segment customers in a specific way to meet the needs of each customer segment. The companies in the industrial sector as a whole cover all segments. Buyers have little importance to fix the price of products, but its power is high in terms of trends, tastes, preferences and requirements of efficiency and quality. Therefore, we conclude that the bargaining power of suppliers is medium.

▪ Percentage of purchases buyer's expenses: investment in technology is always strong in any type of consumer and in the case of Pcs are no exception.

▪ Percentage of shopping on vendor sales: a whole group of buyers represent a significant percentage of industry sales.

▪ Product differentiation purchased: is low because the product is almost a commodity, differentiation lies in the support, branding, after-sales service, warranty, etc..

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