Essay on Dell Analysis Case Study

5238 WordsNov 15, 201221 Pages
Case Analysis: Dell Introduction Present CEO and chairman of the board Michael Dell founded Dell in 1984, as a leading technology provider that designs, develops, manufactures, and supports PCs, software and peripherals, storage and servers, and associated services. With operations in four geographic areas and additional business centers and manufacturing sites in more than 20 locations around the world, Dell is able to reach more than 24,000 retail locations worldwide. Dell’s ability to process in-depth customer knowledge and the tailoring of solutions to the specific customer, through a direct customer sales model, catapulted the company in 2008 to the top PC provider in the United States and second worldwide in terms of sales.…show more content…
Economic: The economic segment is an important threat to Dell. Dell faces significant challenges in the midst of the current economic recession. Forrester Research analyst Andrew Bartels predicts “the brunt of the slowdown in IT spending will hit servers and PCs,” which is Dell’s primary market. The worst-case scenario for IT spending in 2009 will be no growth in the United States, and IT expenditures are expected to shrink in Europe (Hitt). Dell’s first quarter Net Revenue fell by 23 percent. In 2009, the Large Enterprise segment, the companies’ largest commercial revenue stream, dropped 31 percent to $3.4 billion and operating margins of 5.7 percent. Also, revenues for the public, SMB, and consumer segments all dropped an average of 19.2 percent in 2009. Publicly traded on the NASDAQ, Dell has been a volatile stock over the past year with a high of $26.04 and a low of $7.84 per share. Dell’s 12-month stock performance is -48.29 percent, which is due in large part to the global recession. Political/Legal: The Political/legal segment is a threat to Dell, but not as important as the economic and technological segments. Changes in U.S. monetary policy as well as economic policies around the world may lead to volatile exchange rates, exposing Dell to currency risks despite its foreign currency hedging program. Sales outside the U.S. accounted for 48 percent of

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