Introduction
In the current competitive markets, it is imperative for businesses to analyze the situation critically prior to making decisions. In so doing, they will have little chance of making mistakes and coming up with unworkable strategies. As such, businesses have various tools like SWOT analysis at their disposal to help them achieve this purpose (Adams, 2005). With the support of SWOT analysis, companies can determine both the external and internal factors that might affect the business. Under SWOT analysis, the strengths, weaknesses, opportunities and threats that are associated with a particular situation. In that respect, this paper will conduct SWOT analysis of DELL.Inc to examine how it helps managers and marketers to address challenges the business is facing. This article will also provide a recommendation to the firm based on the SWOT analysis.
DELL.Inc SWOT Analysis
STRENGTHS | WEAKNESSES |
Brand positioning: Dell.inc has a remarkable brand position due to the quality of the products it avails to its customers. Apparently, the Dell brand is worth 7.5 billion dollars. Competitive Advantage: Dell provides its clients with a chance to customize their computers (Adams, 2005) . Such merits were only provided with some retailers like Toshiba. Nevertheless, this move has enabled the company to add value to the providers and consumers thereby earning the company a good competitive advantage. Environmental Conservation: Dell is among the organizations that are actively involved in environmental conservation. The company has been awarded on several occasions for its eco-friendly operations. This move is crucial since it helps the firm when it is working with federal agencies. Active in mergers and acquisitions: In recent periods, Dell has been successful in mergers and acquisitions. Notably, for the last five years, the firm has spent over 13 billion dollars on such activities. This has seen the company bringing in the business patents, new skills, and assets. Direct sales: Apparently, Dell does not avail its products to the customers through outlets that are big-box retail oriented. Dell directly sells its products to clients and other enterprises to ensure that it gets maximum revenues from its sales. |
Commodity products: Majority of the revenues generated by Dell comes from computer related products. Notably, such products are commoditized. Such products usually fetch low earnings when they are sold. Poor Customer Satisfaction: In recent periods, poor client services have become typical of Dell.Inc. Poor Research and Development (R&D): Despite a good market positioning, Dell does not invest in R&D. Therefore, the company is losing its innovativeness in the market. Weakened patent portfolio: Since Dell is not spending on R&D, its patent portfolio has become weak. As such, the company cannot compete effectively on profitable products in the market such as tablets and smartphones. Limited Retail Locations: In the modern world, e-commerce has been established as one of the ways in which products can be sold without spending too much money. Besides, it allows for product customization. However, customers will not easily trust a product that they have not hold in their hands. Little Differentiation: Initially, Dell was competitively advantaged in the market owing to the low price of its products. However, the company can no longer guarantee the customers of competitive prices in the market. Besides, most of Dell’s product exhibit little differentiation hence making the company have a competitive disadvantage (Bhasin, 2016) . |
OPPORTUNITIES | THREATS |
Ability to Expand Services: Dell has a significant opportunity to expand its services. Currently, the firm provides different cloud computing services as well as entrepreneurial solutions such as storage, servers, and networking. Apparently, these activities make Dell.Inc to be profitable presently. Nevertheless, the company has the potential to concentrate on increasing these services since they will provide it with an excellent opportunity for growth and increase revenues. divisions Ability to increase patents through mergers and acquisitions: I n order for Dell to diversify, it has to get new technological patents and ideas. Notably, Dell has not created a clear research and development facilities that would enable it to develop innovative technologies. As such, the only way to acquire them is through other companies. Strengthen its Market Position: I n the current global, emerging economies have proved to be the rapidly growing markets for computer related products. Dell has already established its presence in these markets. However, the firm has to strive to strengthen its position in the market since its market share is showing a declining trend. Increase Tablet Market: Notably, it is expected that the tablet market will grow by two-fold in the future (Bhasin, 2016) . In that respect, the firm has a chance to avail new models to the customers. |
Increasing Demand for tablets and Smartphones: Apparently, there is increased demand for unique computer products in the market such as smartphones and tablets (Bhasin, 2016) . Nevertheless, failure to invest in R&D makes it difficult for the firm to meet this demand. The decline in Profit margin on Commoditized Products: Hardware is one of the commoditized products that forms Dell’s primary source of revenue. Studies show that there is a possibility that the prices of raw materials for hardware products are likely to increase in the future. This implies that the company will experience reduced profit margin when this time comes. Slow Growth Rate in Computer Market: In present moments, computer markets are showing reduced growth rate (Bhasin, 2016) . It is also expected that time will come when these markets will become saturated. Stiff Competition: Apparently, Dell faces stiff competition from other established brands like Acer, Toshiba, and Apple among others. The competition is in terms of price, technology, and quality among others. |
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How SWOT analysis help marketing and management teams to solve problems within the company
SWOT analysis the analysis takes into consideration both the external and internal factors that influence business. In that regards, managers and marketers can understand whether a particular situation is favorable for a company to pursue its activities. The use of SWOT has been identified as one of the tools that will help businesses to be successful. SWOT analysis has helped DELL managers and marketers to understand the market better (Bhasin, 2016). They have been able to identify and avoid both the weaknesses and threats to the firm. Of essence, they have been able to maximize the opportunities available to them so that they can strengthen the brand position of the enterprise in the market. For instance, the company is currently striving to invest in R&D so that it can become innovative. On the other hand, the company can take advantage of its strengths to gain a competitive edge in the market.
Recommendations based on Dell. Inc’s SWOT Analysis
DELL’s SWOT analysis shows that the firm has much strength that can be used to address the weaknesses that the company was facing. Dell.Inc can also use its strengths to take advantage of the opportunities at its disposal to expand the services it renders to the customers. Additionally, the company can leverage its brand image and hasten the innovation process so that it can develop and introduce new product lines in the market. Of essence, the company needs to establish a strong patent portfolio and embrace continuous innovation so that it can overcome the threats t is facing in the market.
References
Adams J. (2005). Analyze Your Company Using SWOTs . Supply House Times, 48(7), 26-28
Bhasin, H. (2016). SWOT analysis of DELL. Marketing91 . Retrieved on 17 th December 2016 from http://www.marketing91.com/swot-analysis-of-dell/