DellInc Performance Analysis
DellInc Performance Analysis
Dell Inc is a telecommunications company that deals in themanufacture of computers. The company has established itself as astrong player in the information technology and communication. Ananalysis of the company’s performance is vital in understanding itsability to cope with the competitors in the industry.
Porter’s Model for Industry
Threat of NewEntrants
Entry of new participants into the industry is not a significantissue because of the cost involved. The ability of different firms tojoin the industry is dictated by how much a particular firm caninvest. Further, there is the aspect of technological barriers thatserves as a challenge since the acquisition of such material may notbe possible for small firms to invest in the technology needed tomanufacture computers and related accessories. Before a given companydecides to join the industry, it may have to ensure that it has allthat is needed to start of business in a similar firm (White, 2015).Because of the same, threat of new entrants does not present asignificant challenge to the organization. Nevertheless, it isessential to note that there could be firms with the needed financialand technological ability to venture into the same business. If thecompanies decide to invest in a similar field, Dell Inc, may face asignificant challenge in dealing with the new competitors. Currently,established organizations such as Apple, Samsung, Acer and HP andDell get extensive benefits from economies of scale. Through this,entry of additional firms into the electronics industry is barred.
Competition inthe Industry
Dell Inc operates in an industry that is defined by widespreadcompetition. Currently, the primary competitors include corporationssuch as Apple, Samsung, Acer, Microsoft, HP, and Sony (Kang, 2013).Each of the identified firms manufactures products released by Dellinto the market. Because of the same, it could be essential for theorganization to ensure that it makes products that are appealing tothe customers. Rivalry among the competing firms could be identifiedas a crucial factor since each of the companies has its uniquestrengths. Dell competes with different companies each of whichstruggles to gain a larger customer share. The goal of suchcompetition is to ensure that they gain high profits increasing theiroverall revenues. Each of the firms is coming up with strategies thatseek to endow them with a competitive advantage. Because of the same,Dell has to ensure that it develops plans that are unique and givesit a competitive advantage over the rest of the organizations(Subedi, 2013). Moreover, in introducing the new strategies, it isessential that the organization considers the countermeasures broughtin by other firms. Since each firm is focused on increasing itsrevenues, a significant amount of efforts is directed toward ensuringthat strategies are introduced that puts one company at the edge overthe rest. Of significance is the need by Dell Inc to ensure that itcontinually comes up with strategies that endow it with the abilityto withstand competition from other firms. Competition is an issuethat Dell has to make sure that it addresses if it has to remainrelevant in the electronics industry (Subedi, 2013). Some of thestrategies employed by firms include lowering of prices charged fortheir products in a bid to attract many customers.
The providers play a crucial role in the execution of activities atDell Inc. The company is extensively dependent on suppliers since itfocused on the assembling of products from parts that have beendelivered by the external vendors. Multiple suppliers exist who cansupply the raw materials needed by Dell to facilitate theirassembling activities (Subedi, 2013). However, not all of thosesupplying the parts are reliable. Because of the same, Dell has toensure that it transacts with the most trusted supply. The suppliersDell Inc conducts business with have a bargaining power since theyhave a reputation for delivering quality products. If Dell has toswitch its suppliers, it could be faced with significant challengessince it amounts to extra costs. Further, the new suppliers couldincrease the cost of raw materials supplied to Dell. Because of thesame, it is essential that Dell considers the aspect of suppliers andthe role they play in smooth operations of the business.
The bargaining power of clients is critical since they can getsimilar products from other firms. Further, the majority of thecustomers have knowledge regarding the kind of products they desire.Because of the same, they have the power to bargain on how they wouldwish to be served by the company. Price is the other factor that isof significance when it comes to the overall performance of theorganization. If customers gain the perception that the company ischarging high prices for its products, it could resort to gettingthem from other companies. Dell has to ensure that it meets theindividual customer needs.
Threat ofSubstitute Products
Different firms manufacture commodities that have similar featuresand act as substitutes. For example, currently, customers prefer theuse of tablets compared to laptops. Because of the same, thecustomers would opt to purchase the tablets because they areportable. Dell has to ensure it develops products that are appealingto customers.
The primary factor to be considered is competition from rival firms.Dell has to make sure that it develops a strategy that confers itwith a competitive advantage over the rest of the firms. Currently,firms such as Apple, Samsung, HP and Acer are actively engaged in therelease of products to the market. Each of the companies has investedheavily in technology in the assembling of their products. It is afactor that Dell has to ensure it has the capability of dealing withas a way of competing favorably with the rest of the players in theindustry (Kumar, Dass, & Kumar, 2015). Further, each of theprimary players in the industry has the financial strength to ensurethey come up with strategies that give them a competitive advantage.Competitive rivalry is a crucial factor that Dell has to consider inmaking their strategic decisions.
Attractivenessof Computer Industry
Dell finds the computer industry attractive for the dynamics it isassociated with. Notably, the technological advances in the industrymake it interesting. The company finds it fascinating in assemblingthe parts to come up with computer products that are appealing to thecustomers. Further, the industry has been determined to havesignificant profits. Dell has ventured into the industry since itconfers to its multiple advantages especially because of the need tokeep pace with the technological advances while at the same timemeeting the individual customer needs.
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Kang, H. (2013). To Be A True Industry Leader: Apple Inc. andMicrosoft Corporation in Consumer Electronics Industry. Leadership& Organizational Management Journal, 2013(3).
Kumar, P., Dass, M., & Kumar, S. (2015). From competitiveadvantage to nodal advantage: Ecosystem structure and the new fiveforces that affect prosperity. Business Horizons, 58(4),469-481.
White, B. A. (2015). Up from the Ashes: The TippingPoint TechnologyCase. Communications of the IIMA, 6(2), 5.