Dell Financial Strategy Analysis

Inventory turnover – increase of 634.9% at Dell against 202% at Compaq shows the competitive advantage if Dell in managing and maintaining its stocks

Dell’s acquisition strategy is successful as the company strives to dominate the global market in technology resulting in higher margin offerings and short term profitability. The company’s most recent acquisition is EqualLogic, Compellent storage, and KACE systems management technology has led to Dell growing margin even as it increasingly sheds many of the third party products for which it receives lower margins (Kovar, Joseph F., 2011).

The electronic & computers industry consists of hardware, software, service and an endless array of products, our team chose to narrow the research to PC’s. Including as well computers and computer storage devices such as: DVD drives, and computer peripheral equipment, such as printers and scanners; communications equipment (wireless telephones and telephone switching equipment) and some others.

The proposal presented herein gives the background information of Dell Computers Corporation highlighting the current operation for the manufacture of computers. The proposal highlights the potential of the company to increase its market share and profitability through change of its culture from order based to inventory base.

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

goods sold compared to sales from 82.27% in 2006 to 82.49% in 2010. Dell’s five year average

Dell Company has a successful business strategy. As it is following cost leadership strategy. Its success story is hidden in cost proposition, delivery, and unique customization. In response to the high performance and better chances for growth Dell is applying two way strategy parallel to one another.

From the Financial performance of Dell Computer Corporation we find that Net Sales has been consistently increasing at $6 Billion. However employees of Dell towards the end of case are not confident of continuing to achieve 30% growth rates of the past. To continue the growth in similar pattern calls for new measures & initiatives at organization level.

Apple Inc. (Apple), incorporated on January 3, 1977, Apple 's headquarter is based on Cupertino, California. Apple 's mechanism is to innovative products and a user-friendly interface. Apple provides products and services internationally to nearly 400 stores in 14 countries. Moreover, Apple designs, manufactures and

Look at the Core Competence of Dell What part has the Ecosystem played in Dell’s growth? What is happening now? KPI’s Conclusion

Dell has always been one of the largest PC makers in the United States. Recently, though its share of the PC industry has been declining. It went from the number one low cost provider of PCs in the world to number 3. Its inability to adapt to the new markets that have emerged has caused the company to fall behind other hi-tech companies such as IBM, Apple, and even HP. I feel this is an important topic because it is an example of a large company that has lost touch with what consumers want and is currently trying to restructure itself in order to gain back the dominance they once had. Consequently, Michael Dell has announced his decision to attempt a leverage buyout in order to retain control of his company. Furthermore,

The business model of dell which concentrates on a built to order framework where the middleman is removed and PCs are sold directly to the end buyer

Dell has achieved low working capital by keeping its work-in-process and finished goods inventory very low. The competitive advantage Dell achieves from this is that its inventory is significantly lower than its competitors, it does not require large warehouses for stocking the inventories and Dell is also able to adapt the fastest to technology changes in the components. The competitors would find it difficult to adapt to technology changes in a short time because they have larger inventories than Dell does.

Based on the APV and comparable multiples valuation, it can be seen that the future of Dell looks bleak as it stands today. The Personal Computers (PC) industry is not a great industry to invest in unless you are ready to innovate and adapt to the changing demands of consumers. Adding this to the fact that consumers are slowing moving away from PCs to smartphones and tablets makes it a no-brainer for Dell to make significant changes to its business model as soon as possible

In this report, I will review the internal and external environment of Dell Computer which enabled them to compete with other PC competitor. A case study from the instructor about Dell was provided to help with the internal and external analysis of the company in relation with the non price attributes with their PC product. This report will also look on how Dell should implement their strategy to retain their market share and to out position other competitor in the future.