Swot analysis of Dell Inc. Dell is a US computer manufacturing multinational company. It also provides product-related services like repairing, sale, and customer support service. Michael Dell is the founder of Dell Inc. and he laid the foundation of the company on Feb 01, 1984. The headquarter of the company is in Round Rock, Texas, USA.
Dell is the world’s leading computer technology company. Approximately 165,000 people are working for the company across the world.
IT services, personal computers, IT consulting, computer hardware, data centers, computer software, television, smartphones, and peripherals are some of the major products and services of Dell.
According to an estimate, the annual revenue of Dell in 2020 was 92.144 billion dollars and it has amplified by 0.2%. Out of which the net profit of the company was 2.431 billion dollars and it has decreased by 37.81%.
Today, we’ll discuss the swot analysis of Dell. It would provide you an insight into the world’s top computer technology company. For external factors, check out the pestle analysis of Dell. Here’s the swot analysis of Dell as follows;
Strengths of Dell
Dell is one of the few companies that offer VIP treatment to its customers. The brand allows them to have a customized laptop and computer according to their requirements. Such personal customized service is one of the strong suits of Dell.
Dell has established a reputation in the market for providing quality products. Dell Latitude Rugged Expressed turned out to be the most practical and durable product in the customer market.
Innovation and creativity are the key elements behind the success of Dell computers. According to the ranking of Forbes, Dell ranks at 20th position of the world’s most innovative companies in 2020.
Research & Development
According to an estimate, Dell has amplified the research and development budget by more than 20 billion dollars for the past 5 years. It’s because the computer manufacturing company knows the significance of research and development in the tech industry.
Diversified Product Portfolio
Dell has a diversified product portfolio and the company offers a variety of products and services. Like networking, data centers, cloud services, software, TVs, smartphones, tablets, notebooks, laptops, and desktop computers. The rich and diverse product portfolio stabilizes the company’s offering.
Dell has established a strong market position in the market consistently over the years. According to an estimate, Dell ranked at 12th position of world’s best employer, 90th position of the most valuable brand worldwide, and 137th position of world’s top company.
The annual revenue of Dell has increased by 0.2% during the pandemic of covid-19 when many other businesses were on their hands and knees. The lockdown and shutdown have reduced have decreased the company’s net income. Overall the financial health of the company is very good.
The global market share of Dell is 16.6% in the computer manufacturing industry. The company has got more than 363 brand offices in different countries across the world. Dell is the world’s 3rd largest computer manufacturer after Lenovo and HP.
Dell directly sells its products to the customers at brand stores rather than at the retail shops of other brands stores. It helps the company to decrease the share of the middleman and increase the company’s profitability.
Weaknesses of Dell
Poor Customer Support Service
Dell and many other companies have moved their customer support call centers in India and other emerging economies. It has helped the company to decrease the cost. But it has very badly impacted the quality of the customer support service.
Limited Retail Location Points
As we know that Dell prefers to sell its products directly to the customers. The company is the world’s 3rd largest manufacturer. But the company has very limited retail location points in different countries. The customers should have easy access to the company.
PCs and laptops are the major contributors to the company’s revenue. Dell heavily relies on their sale. If the sale of PC decreases, it would negatively impact the company’s profitability.
Rely on Technology
Dell runs its business in the tech industry and completely relies on technology. If the tech industry faces any market fluctuation, it would greatly jeopardize the company.
No Competitive Edge
Dell used to offer its products at a lower price. Now the computer manufacturing company doesn’t provide discounts because of the competition. In other words, the brand has taken away the only competitive advantage that was differentiating the company. It would difficult for Dell to sell its product without it.
Opportunities available to Dell
For efficient business operations and data management, many businesses and companies use data networking services. Dell is already operating its business in the tech industry, all it has to is maximize networking services.
Many tech companies like Google, Facebook, Microsoft, Apple, and Amazon have acquired many other small startups to increase their market position. Dell has the financial resources and the brand should also make some tech startup acquisitions to strengthen its market position.
As we know that Dell has recently entered the smartphone market. The usage of the smartphone market is increasing across the world. Now the company should exploit this growing market trend and start offering new models of smartphones.
The tech market in developing countries like Africa is growing and holds great potential unlike the mature market of the developed countries. Dell should provide cloud computing and other services in those markets to capitalize on the opportunity.
The product portfolio of Dell comprised of tech hardware products and cloud computing and security services. Businesses and companies also need services like digital storage and networking. Dell should shift its focus on the software and service areas to increase its service portfolio.
Threats Dell has to face
Dell and many other companies faced a lawsuit in Dec 2019. It claimed that the company was employing child labor in Congo. Such lawsuits and news tarnish the company’s reputation and brand image.
Dell rejected the high taxes on electronic products proposal in 2019. If such proposals are passed, it would reduce the company’s profitability.
The pandemic of covid-19 had shutdown many businesses for months. A lot of people have lost their jobs as a result. The economic recession has decreased the purchasing power of people and it would impact Dell.
Microsoft, Sony, Acer, Toshiba, Lenovo, HP, and others are some of the prominent competitors of Dell in the computer manufacturing company. Their increasing market share threatens the company’s position.
Declining PC Market
PCs are the main source of Dell’s revenue. The market sale of PCs has been decreasing since the arrival of smartphones and laptops. Any sudden market shift would dwindle the brand’s sustainable position.
The material cost of computer manufacturing has been increasing and it’s amplifying the retail price. The expensive product of Dell makes it difficult to sell in the market.
After a careful study of the swot analysis of Dell, we’ve realized that Dell is indeed one of the world’s leading manufacturing companies. The pandemic of covid-19, increasing cost, and lawsuits are serious threats the company has to face. Dell should expand the software, smartphone, and developing market to reduce the threats.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.