1. Strategy AuditStrategy Audit
onon
Dell ComputerInc.Dell ComputerInc.
Presented by
Presented To
Dr Sanyia EL Galaly

2. Dell Corporation origination
DELL INC. was founded in 1984 by Michael Dell at
age 19 while he was a student living in a dormitory at
the University of Texas. As a college freshman, he
bought personal computers (PCs) fromthe excess
inventory of local retailers, added features such as
more memory and diskdrives, and sold them out of
the trunkof his car. He withdrew $1,000 in personal
savings, used his caras collateral fora bankloan,
hired a few friends, and placed ads in the local
newspaperoffering computers at 10%–15% below
retail price. Soon he was selling $50,000 worth of PCs
a month to local businesses. Sales during the first
yearreached $600,000 and doubled almost every year
thereafter. Afterhis freshman year, Dell left school to
run the business full time.

3. Company Background
 Dell Inc. established in 1984 by MichaelDell Inc. established in 1984 by Michael
DellDell
 Operational regions : Americas; Europe,Operational regions : Americas; Europe,
Middle East and Africa (EMEA); Asia-Middle East and Africa (EMEA); Asia-
Pacific and Japan (APJ)Pacific and Japan (APJ)
 Employs more than 82,700 peopleEmploys more than 82,700 people
worldwide.worldwide.
 Grew during the 1980s and 1990s toGrew during the 1980s and 1990s to
become an internationally known brand.become an internationally known brand.
 Direct Business Model is the foundationDirect Business Model is the foundation
for Dell’s business.for Dell’s business.
 Dell was the number one supplier ofDell was the number one supplier of
computer systems and became secondcomputer systems and became second
worldwideworldwide

4. Company History
 In 1996, Dell began selling computers via its web site.
 2001, Dell overtookCompaq to become the largest sellerof
personal computers in the US.
 Dell achieves No. 1 ranking in global market share in 2001
 In 2003 , name was changed to "Dell Inc.“
 In 2006, Dell purchased the computerhardware manufacturer
Alienware
 In January 2009, Dell announced that they will withdraw all
manufacturing from Limerickand move it to its new plant in
the Polish city of Lodz by January 2010. Raised theircost-
reduction target to 4$ billion. Cost Cutting methods leaded to
the revenue Generated peremployee 1mio (tripled of IBM,
twice HP’s)
 outsourced some operations (ie component production , express
shipping)
 own assembly line in low laborwages countries Cost pressures
leaded to change manufacturing strategy (closed company’s
desktop plants in Texas and Tennessee in 2008 and 2009 2011)
to outsource (In Europe closed its Ireland plant and sold its

5. Organizational Departments Strategies
 Just on Time Technique
 Mastered process engineering and
supply chain management
 Spent less on R&Dthan did other
Opponents ( 1% of sales on R&D
versus the 5% typically invested by
otherlarge computerfirms)
 Imitatorin New technologies
 95% of Dell’s notebookcomputers
were assembled in Dell’s plants in
Malaysia and China.
 Dell also plans to double its
Enterprise business (server, storage
and networking) from ~18.0 billion
to ~$30.0 billion by 2014. This
expansion activity will be backed by
continued acquisition of scalable
technologies and strong organic
growth.

6. Dell Inc. FourP’s
A technology imitating Product that have the new
Features afterbeing standardized.
Dell machines were made to orderand delivered
directly to the customer. The company had no
distributors orretail stores.
Dell PCs had consistently been listed among the best
PCs on the market by PC World and PC
Magazine.
Competitive Price low cost (not perceived as
providing high-quality Products)

7. Market is Changing
 2006 sales Growth 5%with a
Forecast 7% sales Growth 2010-
2015.
 Between 2006 -2010,HPreplaced
Dell as Market leader, & Dell was
now battling with Acerforsecond
place
 Personal computerbecame a
commodity , consumers were no
longerinterested in paying top dollar
fora computerunless it was
“unique“, what created a market
trend towards Apple Mac Laptops.
 New Tablet Technology Cut 25% of
PC notebooksales since its
introduction in April through
August, 2010.
 Dell countered the iPad with a tablet
computercalled Streakin May 2010,
but failed to generate much
enthusiasm orsales forthis product.

8. Market is Changing
 corporate buyers increasingly
purchased theircomputerequipment
as part of a package of services to
address specific problems, service-
oriented rivals like IBM, HP, and
Oracle had an advantage overDell. All
of these competitors had made large
commitments to servers, software, and
consulting—all having highermargins
than personal computers. IBMhad
sold its laptop, hard drive, and printer
businesses to focus on building its
services business
 Hewlett-Packard acquired Electronic
Data Systems in 2008 to boost its
expertise in services.
 By offering customers a package of
servers, software, and storage, HP
dominated the servers business with
32% market share, with IBMclosely
following with 28% share of the
market.
 Oracle’s acquisition of Sun Microsystems
gave it 8% of the servermarket.
 Dell offered x86 open-systemservers. In
orderto bettercompete in the large
enterprise market segment.
 Dell purchased Perot Systems, an IT
services company, in 2009. Even after
this acquisition, however, services
accounted foronly 13% of Dell’s sales.
In 2010, Dell attempted to acquire 2PAR,
a data storage firm, but was outbid by
HP.

9. VISION STATEMENT
Dell’s vision is
“… to lead in all regions we serve. The foundation of our success is the same in the
United Kingdom and France , China and Japan, Canada and other countries.
Customers want technology products that are relevant to them, offer great value
and can be easily purchased and used. That’s what our team around the globe
consistently delivers”). Dell’s vision is quite focused and assumes customer
needs to be somewhat homogenous throughout the world.
Evaluate Vision
Dell provides a classic example of how the principles of strategic
management have been used to translate an innovative vision into a
successful and sustainable enterprise. Their vision statement basically tells
the way they do their business. They want to be successful in the digital
world for this they rely on lates ttechnology. Dell provides quality products
to cater the needs of the people. In intend to build good relationship with
their customers and suppliers.
KEY TOWARDS STRATEGIC PLANING

10. MISSION STATEMENT
 Dell’s mission is to be the most successful Computer Company inthe world at
delivering the best customers experience in markets we serve. In doing so, Dell
will meet customer expectations of:
 Highest quality , Leading technology, Competitive pricing ,Individual and company accountability, Best-
in-class service and support, Flexible customization capability, Superior corporate citizenship, Financial
stability
Evaluate Mission
 The company primarily deals in PC's, servers and software operating on two
scales of business namely B2B and B2C. This customer base includes large
enterprises, small and medium businesses, government and consumers. Dell is a
global company with presence in over world wide
KEY TOWARDS STRATEGIC PLANING

11. Mission Statement Evaluation Matrix
Firm Custom
er
Products
& services
Markets Profit &
Growth
Technolog
y
Self-
Concep
t
Public
Image
Employee
s
Dell
Inc,
Yes Yes Yes Yes Yes Yes Yes No
 Covered most of the elements that should be cover however it neglectedCovered most of the elements that should be cover however it neglected
the employees.the employees.

un-memorable Mission , Too Longun-memorable Mission , Too Long..
VALUESVALUES
first priority is to be a successful business and that means investingfirst priority is to be a successful business and that means investing
for growth and balancing short term and long term.for growth and balancing short term and long term. ´

12.  the Board of Directors of Dell (the "Board") has established a
Governance and Nominating Committee (the "Committee")
 Most Of the Top Management were assembled and integrated of
experienced executives from companies like Motorola, Hewlett-Packard,
and Apple.
 July 2004, Kevin Rollins replaced Michael Dellas Chief Executive Officer,
allowing the founder to focus on being Chairman of the Board. This
situation did not last long.
 Michael Dell owned 11.7% out of the org shares , however all the other
members owned 1% only
Corporate Governance

13. Corporate Governance
Name Designation
Michael S. Dell Chairman & CEO
Donald J. Carty
Laura Conigliaro Finance
William H. Gray, III Governance and Nominating (Chair); Leadership Development and
Compensation
Alex J. Mandl Presiding Director
Audit (Chair), Governance and Nominating
Ross Perot, Jr.
James W. Breyer Finance (Chair)
Janet F. Clark Audit
Kenneth M. Duberstein Governance and Nominating
Gerard J. Kleisterlee Leadership Development and Compensation, Finance
Klaus S. Luft Audit
Shantanu Narayen Leadership Development
and Compensation (Chair)
Board members include:

14. EXTERNAL ANALYSES - PEST ANALYSES
External Environment A scan of the external macro-environment in
which the firm operates can be expressed in terms of the following
factors
External Environment A scan of the external macro-environment in
which the firm operates can be expressed in terms of the following
factors
Political Factors
Issues of environment policies has affected Dell
as Dell came under significant pressure from environmental
groups across the US to assume responsibility for its old
products and this experience sensitized company officials to
the risks and opportunities of state and federal e-waste
regulations and the need to take proactive steps against them.
Economic Factors
High tariffs on IT products makes Dell difficult to enter
other markets apart from USA
dell aimed to manufacture its products which are more
user friendly and can be afforded by young
professionals, because purchasing power of working
population saw an increase over the past few decades.
Social Factors
Increase of younger population and working population have
led to the increase of the use of computers. A technological
revolution has been around the corner, people have become
techsavy ,that have resulted in the increase in the demand
for computers .These days people have time constrains and as
a result of it they prefer to buy the product online ,which has
given Dell an advantage over others because of dell.com.
IT Factors
Technological changes are happening at a very
fast rate due to which Dell is able to provide advanced
technology products to the customers. As a result of
technological changes Dell has also increased their
product line. It is adopting to the technological changes
as he old technology is becoming obsolete. One of the
most important affets of technological changes that
have led to the increase of the demand of Dell
computers is their Direct Business Model. They have
excellent ecommerce capabilities, which can be seen
with the success of the dell. The recent technological
changes can be seen in their recent products like New
Power Edge Servers
the network-internet,extranet to reach the corners of
the world.

15. Ecological Factors
The dot com bubble was in between1997-2000 ,
which was in the boom of the Company growth,
however it didn’t affect the company growth
rates.
.
Legal Factors
Operating in USA that depends on the Private
sector in the economy offered Dell a big
opportunity to grow with no legal issues
HIGH
Moderate
INTENSE
HIGH
HIGH
External Analysis:
Porter’s Five Forces

16. External Analysis: - Porter’s Five Forces
Threat of New Entrants – High
 IBM, Compaq and HP also entered to Market
 The entry of new comers is quite difficult because of the entry
barriers that are caused by:· Buyer loyalty· Brand name· Low price·
Award winning customer service· Customization Decreasing
profitability shows that there is a threat of new entrants. HP
overtook dell few yrs back .
Substitutes – High
 Strong presence of PC’s throughout society·
 One computer for every three people in the U.S.
 Customer service·
 Direct Business Model
However, high price, and lack of software support prevent people from
switching to Apple system.

17. External Analysis - Porter’s Five Forces
Threat of Rivalry: Moderate
 Price War ·
 Decreasing profitability·
 Low differentiation however, in the midst of sever competition, Dell
can still gain market share from other competitors. That proves
Dell’s business strategies have been successful
Bargaining Powerof Buyer: High
 Highly price sensitive·
 The cost leader has high market share which leads to high
bargaining power relative to its suppliers·
 Reliability and customer service become important factors.·
 Dell’s products are very reliable and customer service is
outstanding.
These two factors help Dell to create certain brand loyalt. But that’s
given the fact that the Company set the prices very low. If the prices
are raised too high, customers will not hesitate to switch.

18. External Analysis - Porter’s Five Forces
Bargaining Powerof Supplier: High
 Dell has to rely on many suppliers as a PC requires assembling of
thousands of independent parts. Some parts are manufactured by
dell or other low power suppliers. But there are some components
manufactured by monopolies which are standard for all PC in the
globe. Microsoft and Intel products are standard for PC products
and these suppliers do have high power over their buyers.

19. External Analysis – SWOT Analysis
STRENGTHS
Production Adaptability
Financial Position
Product Reliability
Competitive Prices
WEAKNESSES
 Rapid I.T. Advancement
 Price Wars
Strong Brands in The Market (IBM)
OPPORTUNITIES
 Global Markets
Internet Usage
Outsourcing
Ecommerce
Maintaining Low Price Leadership
Global Presence
THREATS
 I.T. Advancement
 Price Wars
Strong Brands in The Market (IBM)
Changing Consumer Needs
HP / Compaq Merger
Emerging Markets
.

20. Fromthe SWOT Analysis it is clearthat:
- firms very strong in the market and major weaknesses
are
keeping up with the I.T. advancement, and ensuring to
catch with industry leader HP.
Dell’s global presence creates opportunities forexpansion in
the overseas markets. Its awareness about the
environment makes it a responsible investor. Its user
friendly web site makes it easy for those who are not
computer expert to go online and do the shopping in a
very safe environment.
External Analysis – SWOT Analysis

21. External FactorEvaluation Matrix
4 = Superior Response; 3 = Above Average Response; 2 = Average Response and 1 = Poor Response
No. Weight Rating
Weight
score Comments
OPPORTUNITIES
The 3.50 WEIGHTED SCORE in Dell’s EFE
Matrix represents that Dell is responding
in an excellent way to it’s opportunities
and threats in the I.T. industry.
In other words we can conclude that
Dell’s strategies efficiently and effectively
take advantage of its opportunities and
take serious steps to minimize the
potential threats.
The WEIGHTS are industry based and
RATINGS represent the effectiveness of
firm’s strategy. Or we can conclude how
effectively Dell’s strategy is responding to
the factors.
1 Global Markets 0.1 3 0.3
2 Internet Usage 0.1 3 0.3
3 Outsourcing 0.1 4 0.4
4 Ecommerce 0.2 4 0.8
5
Maintaining Low Price
Leadership 0.05 3 0.15
6 Global Presence 0.05 2 0.1
7 EMS 0.1 4 0.4
THREATS
1 I.T. Advancement 0.05 4 0.2
2 Price Wars 0.05 4 0.2
3 Strong Brands in The Market
(IBM)
0.1 3 0.3
4 Changing Consumer Needs 0.05 4 0.2
5 HP / Compaq Merger 0.05 3 0.15
Total Price ($ ) 1 3.5

22. External FactorEvaluation Matrix
In CPM ratings represents Strengths and Weaknesses. 4 = Major Strength; 3 = Minor Strength; 2 = Minor Weaknesses
and 1 = Major Weakness.
DELL IBM HP
No. Critical Success factor Weight RTG SCR RTG SCR RTG SCR Comments
1 Ecommerce 0.15 4 0.6 4 0.6 4 0.6
Dell’s 3.65 score represent that it is
competing fiercely with its
competitors in the domestic and
global markets.
2 Leader Ship 0.15 4 0.6 4 0.6 4 0.6
3 Global Expansion 0.1 3 0.3 4 0.4 3 0.3
4 Competitive Prices 0.05 3 0.15 4 0.2 4 0.2
5 Service/Repair 0.1 3 0.3 4 0.4 3 0.3
6 Direct to Customers 0.05 4 0.2 3 0.15 4 0.2
7 Adaptability 0.1 3 0.3 4 0.4 3 0.3
8
Understanding Customers
0.1 4 0.4 4 0.4 3 0.3
9
EMS
0.05 4 0.2 3 0.15 3 0.15
10
World’s Leading Web Site
0.05 4 0.2 4 0.2 3 0.15
11
Quality Control
0.1 4 0.4 4 0.4 3 0.3
Total 1 3.65 3.9 3.4

23. Internal FactorEvaluation Matrix
4 = Superior Response; 3 = Above Average Response; 2 = Average Response and 1 = Poor Response
No. Internal Factors Weight Rating
Weight
score Comments
Strength
Dell’s WEIGHTED SCORE of 3.50
represent that it is excellent in its overall
internal strategies when it come to
explore strengths and weaknesses.
The WEIGHTS are industry based and
RATINGS represent the effectiveness of
firm’s strategy. Or we can conclude how
effectively Dell’s strategy is responding
to the factors.
1 Production Adaptability 0.1 4 0.4
2 Financial Ratio 0.1 4 0.4
3 Product Reliability 0.1 4 0.4
4 C. Relationship 0.1 4 0.4
5 Build To Order 0.1 3 0.3
6 Comp Prices 0.1 3 0.3
7 Leading tech 0.1 3 0.3
8 Distribution channel 0.1 4 0.4
Weakeness
1 Little Product Diversification
0.05 3 0.15
2 No Business Diversification
0.1 3 0.3
3 One Man Show
0.05 2 0.1
Total Price ($ ) 1 3.45

24. Strategic Factors Analysis Summary (SFAS) Matrix
4 = Superior Response; 3 = Above Average Response; 2 = Average Response and 1 =
Poor Response
No. Internal Factors Weight Rating
Weight
score Duration Comments
Short Med Long
S1 Products Adaptability 0.11 4 0.44 x Key Factor of success
S2 Build To Order (JIT) 0.05 3 0.15 x x
Increase the window for dircect
customer
S3 Competitve Prices 0.08 3 0.24 x x
improve its position against
market leader
S4 Distrubution Channels 0.05 2 0.1 x x Increase the distribuor channels
Weakeness
W1
Narraw Product Diversification
0.05 3 0.15 x x
Dell to increase the diversity of
products
W2 CRM 0.08 3 0.24 x
W3 One Man Show 0.07 3 0.21 x
Opportunities
O1 Global Markets 0.1 3 0.3 x
O2 Ecommerce 0.08 4 0.32 x
O3 Outsourcing 0.03 4 0.12 x
THREATS
T1 New technologies 0.05 4 0.2 x
T2 Strong Brands in The Market
(IBM) 0.1 3 0.3 x x
T3 Changing Consumer Needs 0.1 4 0.4 x x
T4 New Market Mergers (HP /
Compaq )
0.05 3 0.15 x
Total 1 3.32

25. Tows Matrix
External Opportunities
(O)
O1. Global Markets
O2. Ecommerce
O3. Outsourcing
External Threats
(T)
T1. New technologies
T2. Strong Brands in The Market (IBM)
T3. Changing Consumer Needs
T4. New Market Mergers (HP /
Compaq )
Internal Strengths
(S)
S1. Products Adaptability
S2. Build To Order (JIT)
S3. Competitive Prices
S4. Distribution Channels
SO
1. Using Competitive prices to
lead the law income Markets
through E Commerce and Global
Markets.(S3 O1,O2)
2.New Distribution Channels for
the new global markets .(S4-O1)
3. Can adopt new product to
satisfy global markets needs.(S1-
O1)
ST
1.being a flower in the New tech. , that
will minimize the threat of the new
technologies(S1-T1)
2.Competitive Prices and easy
distribution channels will compete with
Strong competitor Brands and new
Collations
(S3,S4T2,T4)-
Internal Weaknesses (W)
W1. Narrow Product
Diversification
W2. CRM
W3. One Man Show
WO
1. Marketing the existing products
in naïve markets.(O1,O2- W1)
2.Outsourcing new Customer
Care Teams to enhance CRM
(O1-W2)
WT
1. develop new products with imitating
technologies.(T1-W1)
2. Enhance the CRM system to
compete with competitors (T4,T2-W2)

26. COMPETITVE STARTEGY EVALUATION
 Dell's major competitors include: Hewlett-Packard(HP), Acer, IBM, Apple
 Dell's business strategy is a successful cost leadership strategy. The company's
formula for success has been based upon its unique customization, delivery, and
cost proposition.
 First, Dell must integrate its cost leadership skills with differentiated product
features and related services to create value for its customers and achieve
the benefits of an integrated cost leadership/differentiation strategy.
 Secondly, becoming a diversified IT company opens up opportunities in related
businesses, where similar products, buying processes, target customers, or other
operationally-related activities can produce synergies.
 This business-level and corporate-levels trategy combination offers Dell a method
of dealing with the company's competitive realities. Both strategies are
discussed below.
BUSSINESS STRATEGY

27. BUSSINESS STRATEGY
CORPORATE STARTEGY EVALUATION
Measure the Relative Product
Share
Products/Services of the Business Saels of 200
Relative Average
Sales
DESKTOP PC's 19573 1.70
SERVER AND NETWORKING 6474 0.56
LAPTOPS 17423 1.51
STORAGE&PRINTERS 2435 0.21
Total 43470
-Cash Cow -Dell's PC division including
Laptops segment (running position and
ownership of over 18% of the world
market )
-STAR- Servers Networking Business
Dell's market share has increased
substantially over the last several years to
almost 11%,overtaking Sun to rank as the
#3 producer of servers
-QUESTION includes printers, digital
cameras, monitors, storage, HDTV's and
many other products. These products
together make up 16% percent of Dell's
overall revenue and have shown more
Enterprise
PC& Laptop
Storage

28. Recommended Strategy

29. Strategic Alternatives & Recommended Strategy
Dell Should adopt the following strategic in order to go with the change in
markets :
Corporate StrategiesCorporate Strategies
Growth Strategy
•Dell adopts the Product Development Strategy, by taking the existing products to
the new markets; and Dell can benefit the E-Commerce expansion and
globalization in implementing this strategy.
The top Management team can implement another Strategies that concerned with
the Growth Rates of the Sales:
•Invest more in the R& D department to come up with new technologies to coup
with the market
Invest in acquiring new organizations the services, systems & Networking to coup
with the changes in the B2B field

30. Implementation
• On the Business level , Dell
Should Steer it’s Strategy to
Keep on Cost leadership as
competitive strategy, as they
are know as a low cost
product with imitating
products , what will make it
harder to reposition this
image in the mind of the
audience with the same
Brand
• On the functional strategies ,
Dell should re- engineer the
R&D dpt. And invest more to
be able to come up with new
competitive technologies .
• Should also concentrate on
CRM and increase the Staff
of the customer service and
review the policies as the
number of the customer
complaints is increasing lately
 Business StrategiesBusiness Strategies
 Functional StrategiesFunctional Strategies

32. Appendix
http://www.theofficialboard.com/org-chart/dell