Global Computer Hardware Manufacturing Industry

With the industry adopting a more expensive and technologically advanced production system, it has created barriers to entry to smaller firms that cannot afford these advancements. This had left opportunities for larger companies to maintain their market share by being able to keep up with production demands.

The PC industry was experiencing tremendous cost pressure and was undergoing a period of consolidation. As profit margins fell, PC makers were launching cost reduction strategies aimed at further improving the efficiency of their supply chains, while lowering the cost of distribution. According to a recent newspaper article: The latest financial results for PC makers show a slow down in both sales and profitability. Both corporations and consumers are holding on to their PCs for a longer period of time to avoid the cost and hassles associated with upgrading their equipment. As a result, purchases are being deferred and PC makers are looking at new markets for growth opportunities. The industry appears to be undergoing a wave of consolidation as cost control and scale become more important than ever before.1 In 2007, a major news magazine ran a cover article entitled “Whither the PC?” The threats reported in their analysis were worldwide and stemmed from a variety of factors including the growing popularity of mobile phones, PDAs and web-based application software. For most people, email is the most important application that they use. For a long period of time, sending and receiving email necessitated having a full-fledged PC. Nowadays, though, businesspeople and consumers want to

For the past three years, Dell has built a strong presence in the market with an IoT strategy and IoT-focused projects such as gateways and embedded PCs and an ecosystem of over 90 technology and services partners that complement their infrastructure offerings. Further through its OEM

The technology industry is one predicated on constant innovation. Products within the field must provide a compelling value proposition for consumers in order to properly maintain both margins and revenue. Technology companies, particularly those who manufacture products are realizing decreasing margins as the competitive environment matures (Bodie, 2004). Competition for foreign competitors has reduced margins and subsequently profit margins. Cost conscious consumers are now purchasing product based primarily on price rather than specifications. Combine this fact with the macroeconomic factors prevailing in the market and the industry has significant headwinds going forward one year from now. This is particularly true of Dell who has seen an erosion of market share due to the influx and demand of tablet computers. Less demand for traditional laptops has also decreased the profit and operating margins of the firm. Even within its own market, Dell has encountered significant competition for rivals such as HP, IBM, and Microsoft who recently announced its own tablet (Scheck, 2008). Below is a chart indicating markets share within the PC market over the last decade. Notice that market share gains after the housing market collapse have deteriorated. This reflects changing consumer sentiments regarding the overall purchase of PCs and heightened demand for alternative products such as tablets and notebooks.

Dell Computer Corporation, the second leading computer manufacturer, began by selling PC's directly to consumers. Their first customers ordered over the phone and Wold Wide Web. To this day Dell still has no brick and mortar retailers and does not distribute its product to resellers. In the business to business market Dell has excelled, but until recently, the profitable company was not so profitable in the home-user segment,(Industry Survey, Apr. 2000). The company's new strategy, to gain market share, has proven very effective. Dell now posts a 62% gain in world wide PC shipments and a 2.6 share-point gain from 8.2% in `98 to 10.8% in `99,(Industry Survey, Apr. 2000). Recently Dell's presence has been felt in the growing PC market. This has forced competitors to be very careful about pricing in this highly elastic industry. Dell's profitability is also notable, since it has minimal distribution costs and does very little advertising Dell is extremely profitable. However, rough times may be on the horizon for Dell. Analysts are worried because profit growth

diseconomies - worker motivation - distance to markets & suppliers Experience - the learning curve Low-cost access to factors of production Technological advantages Dell Relies on Standardization Cost Proprietary Technology Standardizing Professional Services Open Standards Wireless LAN Managed Services Workstations Desktops 8-way Servers 2/4-way Servers Notebooks Volume Dell Architects Monitor and Evaluate Dell Collaborative R&D Drives Adoption Dell’s Operational Efficiency Drives Down Costs Low Cost Leadership Operating Expenses Over Time [% sales] Inventory Advantage Over Time 70 28% 26% 60 24% 50 22% 20% 40 18% 16% 30 14% 20 12% 10 10% 8% CY 00

By being in direct contact with the changing market, Dell is able to sense the altering customer demands and synchronize its operations through internal collaboration to meet these demands before its competitors. The market demands keep changing quickly which makes it difficult to foresee them. It is a challenge to meet these demands and hence Dell focuses on managing them by continuously rebalancing the demand and supply. If the demand exceeds supply, the company works with its suppliers and looks out for external options to meet the exceeding demands. It also focuses on demand shift through product promotion on its web portal in no time (Brian, 2004)

The biggest area of expansion for Dell is the consumer market. In order to develop more sales in this market Dell needs to focus more advertising on the needs and wants of the consumer. Currently Dell promotes its direct model, which is a key factor Dell needs to create a better position for itself in the consumer market. With all of the PCs in the market being more or less equal, Dell needs to focus on what differentiates its products from the competition, namely service and support.

The cloud computing is defined as a process where data and programs are stored and accessed over the internet. It does not use computer’s hard drive to store data and files. People use cloud computing knowingly and unknowingly. It helps to store, manage, backup and recover a large number of data. It is useful to create new apps and services and also hosts websites and blogs. People use this for streaming audio and video and delivers software that is on demand (Microsoft, 2017). The companies using cloud computing do not need to invest a significant amount of money in buying hardware and managing it. They can use the right type of cloud services to fulfill

Dell responded to changes in the market by determining how different segments of customers derive value from its products and services. The company 's analytics showed customer demand had become quite complex. The B2B market demands predictability, speed, customization, services and precision delivery. Consumers want multiple channel options, the ability to personalize for niche products, low-price options and devices that deliver content. This complexity will only increase as content and virtualization begin to drive the market. To address

Dell Inc. is one of the world’s largest information technology firms, serving individual consumers as well as small businesses and large enterprises. The company manufactures and sells PCs and related equipment, including network servers, printers, displays, projectors, and storage systems. Founded from Michael Dell’s dorm at the University of Texas in 1984 with a mere $1,000, Dell’s revenues have grown to approximately $61 billion in 2009. This stemmed primarily from a direct-sales model and a well-managed supply chain, which provided Dell with significant operating margin advantages over competitors. Despite its historic success and legacy, in recent years Dell experienced difficulties in an evolving marketplace, which

Recent years saw the worldwide PC market growth rate undergoing a drastic plummet (Arthur 2013). The latest statistics from market research firm Gartner, showed an 8.6 percent decline in PC sales in the third quarter of 2013, with shipments dipping for sixth consecutive quarters (Hachman 2013). This trend underscored challenges confronting PC manufacturers as customers favour mobile devices such as tablet computers and smartphones.

Consumers could go to a competitor that will outfit the new business with PCs, but not provide the B2B support Dell does. Michael Dell mentions that his salesmen actually install the computers for their customers, claiming that it enables his employees to know the product better.

Dell’s computers, workstations, and servers are built-to-order and none are produced for inventory purposes which clearly cuts Dell’s cost on inventory. Dell customers could order through their website or even via phone, custom-made servers and workstations based on the needs of their applications. For desktop and laptop, customers are able to order whatever configuration of microprocessor speed, random access memory (RAM), hard-disk capacity, CD-ROM drive, fax/modem, monitor size, speakers, and other accessories they favored. The orders will then be directed to the nearest factory. Dell has proven to be successful in minimizing inventory and bringing new products in the market quickly enabling them

As this industry touching new statures in the field of advancement and its growing step by step. This will prompts solace capacity zone for their customers. As this industry needs to move forward their R&D division which helps them to support their benefit with new highlights. The Business sector size of equipment (PC and IT) industry is US $1.45 trillion in 2012 which will be twofold by 2025 (BBC, 2013). Enormous players in this industry are HCL, HP, Lenovo, Apple, IBM and Dell. In this industry clients can arrange to any costs as a result of extreme rivalry in the business sector. Contenders give offers like 3 year free administrations, free frill and numerous more rebates. On the other side dangers