Environmental Analysis of Dell Organization Essay

dingles external environment identifies each the current conditions and forces that affect its strategic options and define its competitive situation. It consists of three main sectors the Remote Environment, the Industry Environment, and the in operation(p) Environment. All of these environmental sectors affect the firms operations both on an international and national level.Remote EnvironmentIn recent years the computer hardware industry has experienced a slight decrease in profits. Most of this is due to the recent downturn in the economy and a decrease in consumer confidence and spending because of inflation. Many consumers hesitate to upgrade their computers. As a result, dingle must explore new markets and introduce attractive products at a lower-cost to attract its nodes. The use of ain computers in international markets is growing rapidly. dell Computer can take this opportunity as an vantage to provide lower cost computer for consumers.Since dell has the equipment and capital they can produce highschooler quantities of workstations or servers at a low operating cost and then sell it a little in a higher place cost of goods to mainland China, India, Vietnam and third world countries to increase their global market share. The internet market has been expanding and exploding across the globe. It has change by market segment and already has been a big hit in the U.S. dingle knows that the panache to globalize the company successfully is with e-business.Dell is gearing up in China. The key to its outline is a loc every last(predicate)y designed PC c entirelyed Su Ma (Speedy Horse) which it hopes will draw sales away from the homegrown powerhouse, Legend. Dell has already built a factory in Xiamen, which is on the southeastern coast of China in order to promote its next day delivery to 400 cities which is one of the company interchange marks. As a result, Dells China market share has grown from near zero in 1998, to 4.4%. This runs prognostic ate to the general wisdom that Chinese consumers must feel andtouch a product before they buy. more than business and more production facilities will be opened world wide to adopt the globalisation system and the global demand in the next decade.Industry EnvironmentRivalry is high in the computer industry because thither is a lot of competition among a number of market leaders, magical spell there is lack of differentiation and low switching costs for customers. Barriers to entry are also high due to a large part of the market is controlled by the market leaders of the industry, in extension to high start up costs. The bargaining power of suppliers is also high because suppliers are few and there is a heavy reliance on them. The bargaining power of customers is also high because of the availability of numerous high quality computer companies, all products are perceived as similar and well as the ease of switching. The threat of substitutes is low because they are virtually non- existent. Furthermore, there is a high availability of supplemental products available.Dell Computer Corporation is more successful than its competitors because they look at been able to cut out the tangency with its Direct Marketing strategy. Dell entered the computer industry at an opportune time with competitive prices and a production strategy which does non build units until units are ordered, which minimizes inventory and allows customers to customize their units. The direct sales theoretical account has helped in cutting down inventory costs and also reduces the lead time in portion customer order. The biggest entry barrier that Dell has to face when expanding into other areas of the engineering science industry is having customers gain the institutionalize of company over the more popular veteran computer companies.Operating EnvironmentConsumers view Dell as a quality brand at a good price. Some consumers find that Dells competitors may be a little more expensive pr ovided fluid poke out a quality brand. Dells main competitors are IBM, Compaq, Hewlett-Packard andGateway. Dells competitors have all tried to replicate Dells direct marketing strategy. However Dells competitors were and still are unable to replicate Dells direct marketing success. Historically Compaq and IBM sold through resellers and distributors. When IBM and Compaq announced their new initiative to sell directly to their customers, they angered the resellers, who in turn promoted HP products. HP is able to fulfill the needs of customers who want to see and touch the computer before purchasing it, which is not possible in the direct marketing strategy. But HPs growth is declining with this strategy and they have been unable to lure major accounts. Gateway has been somewhat successful in implementing the direct marketing strategy, but Gateway does not have a strong hold in the lucrative large customer accounts.Dell ranks high with customers because the company offers free techni cal support if needed. The purchasing process has changed for the consumers with Dell because all the ordering is done online which offers convenience to its customers and minimize inventory. The flow of materials from suppliers into Dell starts by the company putting in orders to factories that are based on two categories product example and geography. When putting in orders for product type Dell wants to select the right factory that specializes or deals with a certain product. Geographic orders mainly counseling on the where the order is coming from to minimize the transportation expense. Dell has superb relationships with their suppliers they maintain those superb relationships, by ensuring that the suppliers win every time Dell wins.Dell will need to implement several changes in the next couple years to develop its system, improve customer service, reduce cost, and improve supplier control. Dell will lead the technology industry and be a good example to the competitors. More technology of software and hardware will be available in the futurw with less cost.Long Term ObjectivesDells objective should be continue providing customers the most recent technologies at competitively lower prices, at lower costs and faster thantheir competitors. This could be established in the long run as they1. profit global market share by focusing on Asian markets.2. Increased revenues by lancinating the Chinese market benefiting from low costs.3. Continue expansion of server and storage products.4. Continue to maintain the lowest costs in the industry5. Establish global brand recognition.6. Increase diversity in portfolio by expanding product offering and investing in a new industry within the technological sector.7. industriousness some of its supplies, decreasing reliance on suppliers.8. Use the Internet to improve the efficiency of Dells procurement, manufacturing and distribution process and further expanding an already broad range of value-added services.ReferencesA braham, H. Getting in touch with Dells purification Youve got the soul in EnterpriseInnovator.com. Retrieved February 17th, 2006, from http//enterpriseinnovator.com/index.php?articleID=3844&ionID=4Dell. Dells Mission Statement. Retrieved on February 17th, 2006, from http//www2.xmrc.com.cn/jobads/dell2/mission.aspDell, Inc. SWOT Analysis. Dell, Inc. SWOT Analysis, April 2005, p1-10, 10p. Retrieved February 18th,2006 from Ebscohost Database cable Source Premier http//search.epnet.com/login.aspx?direct=true&AuthType=url&db=buh&an=16895029Lee, L., Burrows, P., and Einhorn, B. (2005) Dell May Have To conjure In China. Business Week, 00077135, Issue 3958. Database Academic Search Premier.Tough, M. ( 2006). Creating a Mission and Vision Statement. In the Sideroad. Retrieved February 17th, 2006, from Http//www.sideroad.com/business_communications/mission-and-vision-statement.html