Analysls of Lhe currenL slLuaLlon

1he LnvlronmenL

Lconomy SLaLe
Cver Lhe decade of 1980 Llll 1990 Lhe personal compuLer lndusLry ln Lhe unlLed SLaLes has grown Lo a
$40 bllllon dollar lndusLry fueled by remarkable advancemenLs ln Lhe Lechnologles of boLh sLorage and
daLa processlng
Powever Lhese breakLhroughs have caused Lhls rapld growLh Lo come Lo an end As Lhe vasL spread of
Lhese Lechnologles made personal compuLers become a commodlLy where cusLomers are looklng for
Lhe besL bargalns ln Lerms of prlce from mass dealers raLher Lhan looklng for professlonal advlce on
whaL's besL for Lhem from a cerLlfled compuLer dealer

CulLural and Soclal values
uell belleves LhaL malnLalnlng dlrecL and LrusLy relaLlonshlps wlLh cusLomers ls essenLlal for Lhe
company's success
1he company also conducLs buslness wlLh dlverse parLners whlch helps uell ln servlng cusLomers wlLh
dlfferenL culLures

key ALLrlbuLes of Cur CulLure
MerlLocracy
AL uell we reward for a [ob well donelL's LhaL slmple Lvery professlonal here funcLlons as an essenLlal
parL of Lhe Leam and succeeds by meeLlng measurable ob[ecLlves
ulrecL 8elaLlonshlps
We've culLlvaLed an envlronmenL founded on candld Lwoway communlcaLlon Clobal Leam member
surveys such as 1ell uell help exLend our buslness phllosophy lnLo all we do
LmpowermenL
AcLlng wlLh convlcLlon ursulng your own success 8ulldlng your fuLure and ours Cur commlLmenL Lo
merlLocracy means LhaL your conLrlbuLlons are valued
1he Soul of uell
We've bullL our success on Lhls powerful sLaLemenL of our values bellefs and asplraLlons AL lLs core are
our people who every day all over Lhe world demonsLraLe our commlLmenL Lo cusLomers Lhe uell
Leam dlrecL relaLlonshlps global clLlzenshlp and wlnnlng
1ell uell
AL uell our employee survey program funcLlons as a crlLlcal analyLlc and dlagnosLlc Lool 1hrough 1ell
uell we keep our flnger on Lhe pulse of Lhe company Cur flndlngs enable us Lo make smarLer declslons
and furLher enhance our envlronmenL Lo ensure our conLlnued success







(wwwdellcom)



ollLlcal values
1here are no pollLlcal values affecLlng Lhe personal compuLer lndusLry

Legal LnvlronmenL
Some counLrles where dell operaLes mlghL have some llmlLaLlons on Lhe Lransfer of daLa vla lnformaLlon
Lechnology (for example lnLerneL)

CpporLunlLles
1here ls an lncreaslng demand on lapLops So uell can focus some more on maklng more lapLop
model avallable for cusLomers
AdvancemenLs ln lnLerneL Lechnology LhaL allows cusLomers Lo go onllne and buy uell
compuLers from dellcom

1hreaLs
8apld advancemenLs ln compuLer sofLware and hardware
rlce dlfference beLween uell and oLher brands ls geLLlng smaller
CrowLh raLe of Lhe compuLer lndusLry ls sLarLlng Lo slow down whlch wlll resulL ln more lnLense
compeLlLlon for Lhe survlval of Lhe companles

1he lndusLry

8lvalry among compeLlLors

Apple
A leader ln Lechnology slnce 1977 by offerlng Lhe flrsL operaLlng sysLem LhaL enabled appllcaLlons Lo be
drlven by a slmple polnL cllck
Apple relned supreme ln Lhe home and educaLlon markeLs unLll MlcrosofL launched wlndows ln 1990
whlch was a breakLhrough ln user frlendly lnLerfaces
AlLhough Lhe vasL use on MlcrosofL wlndows apple sLlll holds a subsLanLlal share of 24 of Lhe branded
deskLops used by Lhe forLune 1000 companles ln addlLlon Lo 23 of Lhe reLall personal compuLers

l8M
LnLered Lhe markeL wlLh a share of 3 Lhls share lncrease Lo be 42 over Lhe perlod of 1981 Lo 1984
and lL's one of Lhe blggesL compeLlLors Lo uell compuLers
l8M decreased lLs cosLs by compleLely ouLsourclng Lhelr supply of hardware and sofLware componenLs
ln addlLlon Lo adopLlng an ''open archlLecLure'' compuLer sysLem ln whlch all Lhe speclflcaLlons used are
made publlc so oLher more speclallzed companles can develop sysLem exLenslons and perlpherals 1hls
resulLed ln developlng much hlgher performance sofLware for l8M compuLers
l8M malnly LargeLs buslness segmenLs and owns a 77 of Lhe share of branded deskLops used by
forLune 1000 companles And 11 of Lhe reLalls personal compuLers whlch are malnly used by small Lo
medlum buslnesses

Compaq
A clone manufacLurer of l8M who enLered Lhe markeL ln 1982
l8M concenLraLed lLs efforLs on maklng Lhelr personal compuLers Lhe rlghLful opLlon for corporaLlons
whlch resulLed ln a rapld lncrease ln Lhe demand LhaL l8M couldn'L saLlsfy
1hls was a greaL opporLunlLy for Compaq Lo enLer Lhe markeL and prosper uslng reLall dealers Lo reach
cusLomers ln 1987 Compaq was wlLnesslng Lremendous growLh ln sales whlch led Compaq Lo be
recognlzed as an lmporLanL player ln Lhe personal compuLer markeL And slnce Lhen lL ls one of Lhe
flrmly esLabllshed companles ln Lhe compuLer lndusLry Compaq holds 71 of Lhe branded deskLops
used by Lhe forLune 1000 companles (slnce lL's a clone of l8M so naLurally Lhey would LargeL Lhe same
segmenL) And only 19 of Lhe reLall personal compuLers
ln addlLlon Lo oLher compeLlLors who lmlLaLed uell ln Lhelr successful dlrecL dlsLrlbuLlon sLraLegy such as
CaLeway2000 and CompuAdd companles

1hreaL of new enLranLs
8apld advancemenLs ln Lechnology have creaLed a low enLry barrler for new compeLlLors Lo enLer Lhe
markeL as long as Lhey know how Lo markeL Lhelr compuLers

1hreaL of subsLlLuLe producLs
1here lsn'L any subsLlLuLe for personal compuLers so Lhe LhreaL of subsLlLuLe producLs doesn'L really
exlsL

8argalnlng ower of Suppllers
1echnologlcal advancemenLs made lL much easler for many suppllers Lo manufacLure parLs requlred As
a resulL Lhe swlLchlng cosL beLween a suppller and Lhe oLher ls relaLlvely low and Lhls lead Lo a low
bargalnlng power of suppllers

8argalnlng ower of 8uyers
ersonal compuLers are consldered by buyers as a commodlLy Lhe declslon Lo buy a personal compuLer
ls much slmllar Lo LhaL of a 1v or any home appllance 8uyers are looklng for Lhe besL bargalns and also
Lhe swlLchlng cosLs are very low beLween a brand and Lhe oLher So Lhe bargalnlng power of buyers ls
consldered hlgh

1he llrm

Cb[ecLlves
1o Lake advanLage of changes ln Lhe markeL and noL allow changes Lo affecL Lhe company
negaLlvely
rovldlng cusLomlzed Lo cusLomers who have needs and wanLs LhaL can'L be dellvered by Lhe
LradlLlonal reLall channel and aL a reasonable prlce
1o susLaln growLh and proflLablllLy Lhrough havlng a broad range of well done buslnesses

SLrengLhs
uell's dlrecL model LhaL allows whlch allows cusLomers Lo fully cusLomlze Lhelr producLs Lo Lhelr
speclfled needs and wanLs
uell has creaLed long Lerm relaLlonshlps wlLh large corporaLlons and became Lhelr favorlLe
suppller
1op level cusLomer servlce

Weaknesses
1he lack of relaLlonshlps wlLh educaLlon segmenLs
AlLhough dell's dlrecL model ls consldered as sLrengLh lL also has Lhe drawback of cusLomers noL
able Lo see or Louch Lhe acLual compuLer

MarkeL sLrucLure
erfecL compeLlLlon where Lhere are a large number of suppllers and buyers ln addlLlon Lo relaLlvely
low enLry barrlers

1he markeLlng sLraLegy

SLraLegy ob[ecLlve
1o galn conLrol over more markeL share and ln Lhe same Llme provldlng superlor value for cusLomers Lo
reLaln Lhem

ConcepLs
roducLlon concepL
When Mlchael uell flrsL sLarLed buylng surplus compuLers from reLallers upgradlng Lhem and Lhen
reselllng Lhem for a cheaper prlce
roducL concepL
uell sLarLed Lo provlde cusLomers wlLh 24hr supporL servlces a 24 Lo 48 hr guaranLeed shlpmenL of
replacemenL parLs and a supply of replacemenL sysLems ln addlLlon Lo lncorporaLlng Lhe laLesL
Lechnologles ln mlcroprocessors and perlpherals aL a much lower cosL Lhan compeLlLors
Selllng concepL
uell makes offers and dlscounLs on surplus compuLers As well as offerlng deals on Lhelr besL selllng
compuLers
MarkeLlng concepL
uell offers cusLomlzed compuLers Lo people's speclflc needs and wanLs ln addlLlon Lo 24 hr cusLomer
supporL LhaL saLlsfles all cusLomers' lnqulrles and reacLs Lo Lhelr complalnLs

1argeL markeL sLraLegy
uell's conducLs a cosL leadershlp sLraLegy ln whlch lL promoLes lL's lower prlce Lo quallLy edge whlch
makes lL very dlfferenL Lhan oLher compeLlLors

roducLs belng sold
LapLops deskLops servers and sofLware supporL for uell producLs for governmenL
enLerprlsescorporaLlons small buslnesses and lndlvldual cusLomers

romoLlonal mlx used
AdverLlslng ln speclallzed magazlnes
uell compuLers come ln hlgh quallLy packages
ulrecL markeLlng Lhrough dellcom
Sales promoLlons
lnLeracLlve/lnLerneL by enabllng onllne orderlng

Channels of dlsLrlbuLlon
ulrecLly from uell Lo LargeL cusLomers and Lhrough cerLlfled dealers and reLallers

rlclng sLraLegles used
uell uses cosL plus sLraLegy as lL bases Lhe prlce on Lhe cosL pald ln Lhe sofLware and hardware parLs