Economic analysis of Dell Desktop Computers Industry Demand, Costs and production, Market Structure, SWOT analysis, Global Strategy, Recommendations

5377 WordsJul 9, 200422 Pages
Economic Analysis of Desktop Computers Table of Contents 1. Introduction 6 2. The Industry Demand 7 3. Costs and Production 15 4. Market Structure 20 5. Strategy 25 6. Recommendations 31 References 33 1. Introduction Michael Dell started the company in 1984 with the revolutionary idea to sell custom built computers directly to the customer. As one of the world's premier providers of computer products and services, Dell now designs and manufactures a comprehensive family of desktop solutions for virtually every computing need. Within the last five years, Dell has grown from $7 billion in revenues to more than $35,4 billion, and the company continues to expand in its current products and regions, and also into new markets. This…show more content…
The US economy began to recover from the recession in early 2002, finishing the year with 2.4% growth. Standard & Poor's currently forecasts real GDP growth of 2.4%for 2003 and 4.4% for 2004. Furthermore, the PC market is disgusted with PC's. A large part of the population owns a PC by now, and people do not need a new one. Their old one is sufficient for their needs. Although computer technology has progressed rapidly in recent years, the performance of the computer for 'the average customer' has not improved significantly. A strong recovery in PC demand does not appear imminent. According to IDC (International Data Corp.), the GDP growth stays like in 2002 at 2.4%. In the first quarter of 2003, worldwide PC shipments rose 2.1% since the consumer spending remained weak and commercial PC demand failed to recover materially. In such a weak demand environment we see an aggressive price competition. To notify is that Toshiba, a manufacturer of Laptop PC's, which is a technical substitute of Desktop PC's, moved up to the five top PC makers in terms of market share, both in the United States and worldwide. This move reflects the continued move in demand favoring note books over desktop computers. The forecast of the consumer market is more optimistic. It dropped 19.6% in 2001 and rose 8.4% in 2002. In 2003 the rise is predicted to advance 11.3%. Dell was #1 in the first quarter of 2003, concerning global PC shipments. The company posted 24,7% unit

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