Dell Corporation Essay Example | Topics and Well Written Essays - 750 words

Dell Corporation - Essay Example However the company needs to take action fast. The main business is generated from PC sales. Most of Dell’s revenue stream is generated from sales of personal computers. The global economic downturn is having the greatest effect on PC sales as companies are reducing their spending on personal computers. Their spending may be going up in other product categories, but investments in PC are being reduced industry-wide. Because Dell’s main business is in PC sales, it is a strategic imperative for the company to craft a new strategic direction. The company does have diverse product offerings but the most important part of its resource base is dedicated to manufacturing personal computers such as desktops and laptops. Dell’s main competitors are HP, Acer and Apple. Dell faces rising competitive threat from these companies because they have invested in a wide variety of products and services. For example, Apple is generating profitability at the same level despite the e conomic downturn. This is because Apple maintains diverse product offerings based upon continuous innovation. HP is diversifying into service business. Because the western market is saturated, Dell has to focus on the fast growing markets of China and India. However in China Dell faces a major competitive threat from Lenovo. Therefore Dell Inc. ... Therefore the company has a skill in retaining large corporate accounts which will enable the company to face the competitive rivalry from HP. Dell also has core competencies in transferring knowledge across divisions in order to facilitate the highest level of quality in all the product categories. The company has shown great success in product diversification. These capabilities and resources form the core competencies of Dell Inc. The company’s strength is in the market leadership position that it holds in the industry with a loyal customer base of large commercial and institutional investors. The company has also been successful in diversifying into additional product categories. The company’s weakness may be its over-reliance upon PC sales which are being affected by the economic downturn. The opportunity is provided by the large corporate accounts which will enable the company to invest in additional product and service categories to strengthen the revenue base. T he threat is the rising level of competitive rivalry in the industry. Although Dell might reduce the competitive threat to some extent by expanding to growing markets these markets also have their share of competitors, two examples being Acer and Lenovo. Dell is customizing its products by providing value-added services in the enterprise market. This market has been growing steadily because corporate customers are looking for ways to cut IT costs. Therefore, by customizing its products for the enterprise market, Dell will be able to make up for the loss of revenue from decreasing PC sales. However the disadvantage is the possibility of over-diversification. In that case the company might lose money in areas which are not its