Dell Case Analysis
· Three of the most influential factors in home PC ownership were education, income, and children in the household.· Consumers are becoming more computer and component literate.· Companies are investing large amounts of money into network developments.· The low unemployment rate allows more people the opportunity to purchase novelty items. · Top five computer companies in 1999 ranking according to market share: Compaq (19.1%), Dell (10.3%), Packard Bell NEC (8.2%), IBM (8.0%), Hewlett-Packard (7.1%). 1) Compaq sells almost exclusively through retailers. 2) Their greatest market strength is among Fortune 1000 companies. 3) They acquired Digital Equipment Company (DEC) in order to become a global supplier of computer hardware and network 4) Compaq offers a wide range of servers.5) The DEC acquisition gives Compaq an advantage in the computer-networking segment, which will look very appealing to large corporations.1) IBM is the market leader in both entry and midrange servers. 1) H-P is the global leader in printers. 2) Their strong global reputation has hel
Capitalization· There are 2,586,748,000 shares outstanding, with a market value 117,050 ($ Mil). Dell's GPM might appear poorer than the average, but due to their global expansion and their attempts to enter into new PC segments, Dell is pouring profits into its growth, which will payoff in the long-run verses the short. · Dell appears to have more of a top down management structure. · Dell's production build-to-order strategy allows them to keep no inventory on hand. 52 c) Return on Assets: Return on Assets shows how much return management has earned on all assets available to it, from all sources. This partnership allowed Dell to invoke just-in-time component inventories. · There are intensive costs required to remain competitive in the computer industry due to consumer demand for innovations and product developments to meet their changing needs. This would definitely help Dell increase their reputation and market share. dollar, PCs are more expensive to Asian buyers. · Since Dell sells directly to their customers, they must continue to offer a variety of PC models, high and low end, to keep all consumer market segments happy. Dell's current and five-year GPM has been below the industry's average.
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