This case analysis report focuses on the declining market share faced by Dell, Inc. (“Dell”, the “Company”) and recommendations are given as to where the Company needs to alter its strategy at a business level as well as a corporate level. Broad recommendations include foraying into the retail space at a more aggressive pace, laying greater impetus in fast emerging markets such as China and India, and focusing more on R&D efforts in order to ensure that higher levels of innovation are achieved by the Company.
Dell, Inc. (“Dell”, the “Company”) is a multinational company that specializes in the development, manufacture, marketing and servicing of ...view middle of the document...
Dell’s strategy has not changed in tandem with the external environment, and as a result, the Company has been losing market share in the last few years. The computer industry is characterized by standard cycle to fast cycle markets, and constant innovation is required to ensure that firms continue to earn above average returns.
This case study analysis report will outline Dell’s existing strategy and will then explore the new strategic options that are desirable for the Company. As Dell is a global player and has operations all over the world, specific strategies will be formulated from a region wise perspective. The product categories that are proving to be winners for the Company will also be considered and analysed in depth. Specifically, this report will be presented in the following format:
• Dell will be analysed in relation to its two biggest competitors i.e. Hewlett-Packard (HP) and Lenovo, and suggestions will be given as to where Dell will need to place strategic thrust in the future.
• The three major geographic segments in which the Company is present viz. The Americas; Europe, Middle East and Africa (EMEA); and Asia Pacific Japan (APJ) will be analysed in depth and relevant business strategies and diversification strategies will be expounded upon. The future course of action the Company should undertake will be presented.
• The report will use the above analyses to provide recommendations to the Company in terms of product categories that are most desirable, regions that need to be focused on in the future, what new core competencies the Company should develop, and the overall direction that strategic leadership needs to take in the future.
Dell’s major competition comes from two other computer related behemoths i.e. HP and Lenovo. Dell is no longer the market leader as it had once been. HP has overtaken Dell as the largest PC manufacturer in the world. HP achieved this distinction from Q3 2006, and in 2007 had 18.8 percent global shipments for that year. All three Companies have a market share in similar regions and competitive rivalry and dynamics are based on the actions and responses initiated by each other. The following table presents a snapshot of product categories, market share, main customer segments, and product innovations of the world’s major players in the computer industry:
Table 1: Competitor Analysis of Dell, HP, IBM, Lenovo and Others
Category Dell HP IBM Lenovo Others
Product Categories Dell is present in all the computer related categories from desktops to PC’s and servers. The original leader in printers and scanners, HP is the world’s largest computer manufacturer After its sale of its Laptop and PC division IBM, concentrates on its server market and providing IT solutions After its purchase of IBM, Lenovo has become one of the world largest PC manufacturers. This compromises of Acer who is a large player and other large as well as smaller companies within similar...