Introduction
Dell is one of the popular corporations in the industry of electronics. It provides a variety of consumer electronics such as laptops, cell phones, computers as well as music devices. This paper is going to address Dell`s strengths and weaknesses, determine Dell`s core competencies, core capabilities, and resources, discuss the segments of general environment that influence the corporation, discuss the most significant forces of competition and identify greatest external threats and opportunities of Dell.
General Environment
The political segment influences Dell in that it governs the relations of the company with its consumers, employees, investors, competitors, and partners. This segment specifically deals with legal laws and issues that may be faced by a company in the process of doing business. Taxation laws, anti-laws, labor training laws, educational philosophies, deregulation philosophies, and policies are the main elements of the political segment. Anti-trust laws are laws set forth to protect consumers and certain individuals from businesses who carry out predatory business practices. Preservation of free and unfettered competition as indicated by the Federal Trade Commission is a rule of trade (Federal Trade Commission, 2016). It is vital for the electronic industry, like Dell to avoid violating antitrust laws.
The technological segment has the highest influence on Dell. Product innovation is the most important element of the technological segment. This is because for a company to compete with its rivals, it is important for it to create innovated products. When a company is competing in an industry related to technology, it must have innovated products since consumers are always willing and able to spend their money on what the best gives them. When consumers are not willing to spend on products the company gets a loss of revenue as well as a greater loss percentage of market shares.
Two Forces of Competition
· The threat of substitute products
Dell has offered similar products and services with the Microsoft Corporation. Both of these companies offer products such as web browsers, handheld computers, and operating systems. For instance, consumers are offered with tablets by the Microsoft Corporation while on the other hand, Dell offers iPads. These two devices perform the same function but offer clients with other services which are not included in the rivalry`s product. Price is the common dimension in which the Microsoft Corporation rivalry is based. Most of Dell`s products are very expensive. As a result, most consumers have moved to Microsoft Corporation`s products. For example, one can buy a Microsoft operating system computer for around $ 800 to $ 900. Whereas, it has been found that the average price for Dell`s operating system and computer ranges between $1,300 to $2,100.
· Rivalry among competing firms
Many existing companies have competed with Dell by offering substitute products. This has led to widening rivalry. Needless to say, consumers go for the cheaper products that share the same similarities with Dell products. For example, if a customer wants to purchase a touch screen phone which is similar to an iPhone, he/she can get it from Wal-Mart at a price of as little $90 bucks. If the consumer wants something with similar characteristics, he/she can buy a tablet. Evaluation
Dell has addressed the issue of substitute products by providing consumers with a more robust operating system. This system has more security services than the operating system of Windows. Dell has also put more innovations on their products for their clients to get more bangs. Dell has dealt with rivalry from its competitors by taking legal actions against them with an attempt of collecting some of its loss damages and revenue. It has also had a history of filing lawsuits against its competitors when they try to provide similar services and products as Dell.
Future Improvements
To deal with rivalry, Dell can choose to lower its products and services price. It can also choose to create better products and services. Lowering the prices of its services and products will be a good strategy. Dell has the opportunity of forming partnerships with small companies and organizations to create substitute products. This will prevent major companies from getting a chance to substitute Dell`s new products. Dell can also strategize on making new innovated products which are cheaper right from the beginning (Hitt et al., 2012)
External Threats and Opportunities
Competitor mergers and acquisition of other competing companies is the greatest external and serious threat affecting Dell. In the assessment of Dell`s opportunities, the greatest opportunity for Dell has arisen from its cell phones. Every individual needs a cell phone to communicate and almost everyone has one.
Threats and Opportunities Strategies
Dell should legally block competitor companies from merging to curb this external threat. It can also interrupt acquisitions by placing higher bids than its competitors. This will be a better deal in terms of the buyout. It can use terms like retention of own shares for the original company founders. Dell should address the opportunity of the cell phones by providing cell phones which are easier to operate than other existing smartphones.
Strengths and Weaknesses
Creation of innovated products is the greatest strength for Dell. The most innovated product for the company is the iPhone. When it was first introduced in the market in never required a pointing pen as other smartphones did. Instead, clients used their thumbs as the pointing device. The iPhone contained a Graphical User Interface (GUI) and had an operating system that resembled that of a laptop. Product pricing is one of the greatest weaknesses of Dell Corporation. Most of Dell`s products are expensive as compared to the other companies. Strengths and weaknesses strategies
To maximize the strength of creating innovated products, the company should promote innovation to its workers and encourage them to come up with new ideas. To complete this weakness of product pricing, Dell should decrease the expenses and costs in making their goods and deliver the savings to its clients by reducing the products` prices (Yunker, 2002).
Resources, Capabilities, and Core Competencies
One of the resources of Dell is its name together with its reputation in the creation of innovated products. These resources cannot be purchased with cash. Dell has the capability of creating products in big quantities. It also has enough capital to spend on developing new products and research. Dell is also able to create products outside the industry of computers. The company has also revealed its ability to tap revenue from both the cell phone industry and the music industry. The core competencies for Dell are its development and research activities. It spends much money on the development and research of new products. It has a high level of knowledge and competence in networking, computer, and communication.
References
Federal Trade Commission, (2016). Guide to Antitrust laws/The Antitrust Laws. Washington, D.C. Retrieved from https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/antitrust-laws
Hitt, Michael A., R. Ireland, Robert Hoskisson (2012) Strategic Management: Concepts and Cases: Competitiveness and Globalization, 10e, 10th Edition. Cengage Learning, 01/2012. VitalSource Bookshelf Online. Retrieved from course text.
Yunker, J. (2002). Beyond borders: Web globalization strategies. New Riders.
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