The paper "Dell Pursues Growth in a Challenging Environment" is a great example of a business case study. Competition is a major concern for Dell since new entrants and existing players continuously introduce new technologies and provide services that are exemplary. Moreover, the products that are offered by competitors are diversified which means that the market share is continuously increasing making Dell introduce measures to counter the effects of the new and existing players. Moreover, technological innovation and development have reduced the chances for Dell to explore substitute products meaning that their competitiveness position is continuously been threatened. Furthermore, Dell competitive position is affected by the consolidation of numerous computer producers.
This consolidation can be seen in the approach that HP and Compaq came together while Acer acquired Gateway. It meant that the consolidated companies had enough resources and influence resulting in a decrease in Dell’ s competitive advantage. Leadership Leadership under Michael Dell was productive but after he left for a short period that the company started experiencing hard times. Some of the leadership issues that were reported included product quality, customer service and effectiveness of the direct sales model.
However, these issues were solved when Michael Dell returned to leadership. Generally, the position of leadership and management is exemplary meaning that issues associated with management have been minimized. 2.0 Identification of the Key Issues facing Dell Inc. It is important to understand the environment in which an organization operates in so that strategies can be developed to ensure that the organization is successful. The environmental factors bring into consideration internal and external factors and these can be unders6t9oood through utilizing factors such as PESTEL’ s Analysis, Porter’ s Five Forces and SWOT Analysis.
External Analysis Dell’ s PESTEL Analysis Political – it brings into consideration trade restrictions, tax policies and tariffs. The tariffs and policies that are in place supports the operations of Dell, and ensure that plans can be formulated since the policies are predictable. Economic – it brings into consideration interest rates, economic growth, and inflation rates. The interest rates are constant for long times, which means that Dell can operate efficiently for long times. Sociological – it includes factors such as health consciousness, culture and age distribution.
Many people are coming computer savvy, which means that the utilization of computers could continue to improve, and a thus better appreciation of Dell products. Technological – the rate of technological change, and changes that are associated with research and development. Technological advancement in the computer industry is growing fast in which many consumers prefer the latest technologies and thus it is important for Dell to continually update their products. Legal – regulations and consumer laws. The laws and regulations that are in place support operations and hence it can easily make the organization to succeed. Environment – pollution and fundamentals associated with environmental conservancy.
Dells’ Porter’ s 5 Forces Force Severity Discussion Competitive firms High This is the major component that is associated with the five forces analysis. The computer market segment is competitive and this has resulted in Dell offering high-quality products at lower prices compared to its competitors. The entry of new competitors Low The computer industry requires huge investments, which means it is tricky for new entrants. Other factors that entrants are supposed to face include brand recognition, distribution channels, and merging with the right partners. Substitute products Medium Substitutes in the computer industry are small because it is a similar product with similar functionality that is offered to the consumer.
This means that substitute issue does not exist in the computer industry apart from substitute in terms of brands. Bargaining supplier power High In many manufacturing industries, producer and supplier relationships should be maintained and productive. Dell computer is an organization that has developed its reputation in terms of high quality and cheaper products. The main issue behind this success is maintaining collaboration and good relationship with suppliers of software and hardware. Power of consumers High Consumers are the final person in most chains, which means that the perception and information availed to these consumers determines, the success of an organization or brand.
Dell brand is well-developed meaning that consumers are likely to purchase Dell products when compared to other computer manufacturing organizations. Internal AnalysisDell’ s Strategic Capability: SWOT Analysis A SWOT analysis brings into consideration strengths, weaknesses, opportunities and threats that a company faces in its environment. SWOT analysis of dell indicates: Strengths Price for performance – Dell’ s products are competitive in terms of prices because it has efficient distribution and manufacturing processes that allow for reduction in product prices.
Moreover, this benefit is ensured by the efficient procurement team of the organization. Dell products are customer focused in which they ensure customization is championed Dell has a clear and defined service, reliability and support that are offered by its competent and motivated staff. The company is continuously innovating, which means that the technology that they utilize is latest and thus frequently updates the position of the organization repetitive to competitors.
Griffith, G., Johnson, T., Sebald, R., Cowan, T., Trotter, N. & Wong, A. Dell Pursues Growth in a Challenging Environment.