Pestle analysis of Dell Inc. Dell Technologies is a computer producing American multinational company and it offers customer support, sales, repairing, and many product-related services. Michael Dell established Dell Inc on Feb 01, 1984. Its headquarter is situated in Round Rock, Texas, USA.
Some of the main products and services of Dell are peripherals, smartphones, televisions, software, computers, data centers, computer hardware, IT consulting, laptops, and IT consulting.
Dell has employed roundabout 165,000 employees to manage the various operation of the brand at different location points worldwide. It’s one of the top computer manufacturing companies.
According to a financial estimate, Dell’s annual revenue was 92.144 billion dollars in 2020 and it increased by 0.2%. Out of which company’s net income was 2.43 billion dollars and it reduced by 37.81%.
Today, we’ll study the pestle analysis of Dell. It will examine the macro-environmental factors of the computer manufacturing company. For internal factors, check out the swot analysis of Dell. Here’s the pestle analysis of Dell as follows;
Political factors impacting Dell
The government and political regulations of different countries are different. Dell is a multinational brand and operating its business in different countries. The company has to keep in mind the taxation regulation, trade tariff, currency exchange rate, and political environment. They all can impact the company’s growth.
US & China
China and Europe are the two major markets of Dell. The former Trump administration had a very deep conflict with the Chinese government. Both of these countries have increased imports and exports taxes on each other. The retail price of Dell products increased a lot during the tenure of the Trump administration.
Hopefully, things would calm down during the presidency of Joe Biden between China and the USA. Political stability is very important for the growth of businesses.
The political conflict among neighboring countries like India and Pakistan could directly impact Dell. For instance, India and Pakistan are neighbors and they have got a fierce conflict on all levels. The conflict makes it difficult for the company to import and export products from one country to another. It badly impacts the sale of computers.
Dell Inc operates its business in the US and the country is very well with the political and administration of the democratic systems. The political system of different countries is different like democratic, socialist, communist, and dictatorial. Dell may have to bends its laws and running system according to the country’s political system.
Economical factors impacting Dell
The pandemic of covid-19, lockdown, and shutdown of businesses have pushed the global economy into economic recession. The net income and profitability of Dell have declined by approximately 37.81% in 2020. The real havoc of the post-pandemic world is yet to come when the thing would get back to normal after the pandemic. Hundreds of thousands of people lost their jobs and many more will, it has decreased their profitability.
Taxation plays a very important role in setting the price of the product. The higher taxes would increase the retail price of computers. The purchasing power of people is already low due to the pandemic. It would reduce the company’s sales.
Import & Export Cost
Dell is a multinational computer manufacturing brand and operating its business worldwide. The import, export, and shipment costs increase the over price of the final product. PCs and laptops are luxury items. A slight increase in price makes it unaffordable to many customers. Dell would lose the customer market share and profitability.
StatSoft, AppAssure Software, and Alienware are some of the acquisitions of Dell. It has helped the computer manufacturing company to diversify its product portfolio and revenue streams. At the same time, it increases the legal and management cost. The brand should find a balance.
Social factors impacting Dell
In the beginning, laptop usage was limited to office work and adults only. Nowadays, people of all different ages use laptops and PCs. They can use it at any time for different purposes. The usage growth has increased the market of Dell.
The brand offers different types of computer products for kids, business professionals, tech savvy people, gamers, and many others. Dell is facing huge competition from brands like Asus, Lenovo, Apple, and HP. It’s because they’re offering the same products.
Gaming Laptop & E-Sports
The trend of online gaming and e-sports has increased a lot among teenagers in recent years. Dell also offers gaming laptops for online gamers. Playing video games isn’t a hobby anymore. It’s become a profession, adults, kids, and teenagers play online games and live stream the event, and earn millions of dollars.
The gaming laptops have specific requirements like high VGA and graphic cards, high RAM, and speed drive. Dell is facing fierce competition from MSI, professional gaming devices manufacturing brand.
Study the Demographic
As we know that people use laptops and PCs for various purposes like education, gaming, work, entertainment, and many other usages. Dell should keep in mind the needs and requirements of different demographics and offer them the products accordingly. The company should also know the income level of the target market.
Technological factors affecting Dell
We’re living in a fast world of changing technology. Many tech companies like Huawei, Apple, Google, Samsung, Amazon, Facebook, Microsoft, and many others are competing with one another technologically. Every new latest tech development makes the previous technology obsolete.
The demand of the customer markets is also changing. For instance, keyboards and a mouse were in great demand once. The arrival of laptops reduced their market. Now, we’re going through a phase of touch screen technology. Next, there’ll be hollow screen technology and something else.
As we know Dell has been manufacturing and offering gaming laptops. The brand has recently acquired Alienware, a gaming laptop brand. It has upgraded the graphics card with high capacity and they play the heavy graphics of the games smoothly. The demand of the customer market is growing along with competition. It has become very difficult for the company to keep up with the competition and growing technology.
Legal factors impacting Dell
Dell is running its computer manufacturing business in different countries worldwide. The company has to keep in mind the minimum wage laws, labor laws, working hours, employees’ welfare, and working conditions.
The brand faced a child labor lawsuit in Dec 2019 on the allegation that the company was using a child in some of its manufacturing facilities in Congo. Dell should be aware and try to stop such practices if any of its production units are using them.
Rules & Regulations
The government rules and regulations of different countries are different. For instance, the Indian government follows the GST laws. If Dell hasn’t changed its operations and policies accordingly, then it would have been a great loss to the company.
Dell should also keep in mind the environmental laws of different countries. It’s because the world is getting cautious about environmental changes. Dell had to pay huge taxes in China for not following the environmental laws.
Environmental factors affecting Dell
The government and environmental movement are pressurizing the tech companies like Dell to reduce the carbon emission and carbon footprint. The increasing electronic waste is a serious problem. The brand should start manufacturing its product with biodegradable plastic. The production of recyclables would provide the brand a competitive. It would certainly attract a lot of eco-friendly customers market. Most importantly, it would reduce environmental pollution.
After a careful study of the pestle analysis of Dell, we’ve concluded that Dell is indeed the world’s top manufacturing company. The carbon/electronic waste and lawsuits are serious threats. Dell should exploit the gaming trend and increase its market share.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.