Dell's Strengths: Brand Reputation, Quality Commodities, Mergers, and Acquisitions - Essay Sample

Introduction

The strength of Dell's organization is that it has an excellent brand reputation. The company offers quality commodities valued at almost 7.5 billion dollars, which enables the clients to customize their laptops (Passemard and Kleiner 2000, p. 113). These services were not available to other corporations dealing with computers like Toshiba and Sony, making the company withstand competition. Also, Dell has spent around $ 13 billion for successful acquisitions and mergers, which have brought assets, skills, new capabilities, and patents to the businesses (Passemard and Kleiner 2000, p. 113). The company deals with direct selling to enterprises and customers because it does not sell its commodity via big-box retail outlets.

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In weaknesses, Dell product has minimal differentiation leading to lack of competitive prices in case the opponents sells the same item with the reduced price. The selling of commodities online enables product customization and saves money, although it offers less product visibility. In the case of Dell, the customer finds it difficult to trust the item if he/she cannot hold it with hands. Due to offering poor services to customers, the number of clients continues to deteriorate making the company lose its reputation

In opportunities, the expectation for tablet markets in the next few years makes Dell have a chance to manufacture new tablets models due to market growth. The company has a significant presence to strengthen its position in electronic devices like laptops and tablets since emerging economies are growing. Dell should acquire technologies and patents from other companies since it has not established R&D to enhance the discovery of patents and new technologies (Lipnicka and Dado 2013, p. 756).

In threats, the customers have diverted their attention in purchasing tablets and smartphones due to lower prices and improved capabilities. The demand for those devices affects the market for a laptop as a primary source of revenue for Dell. The increasing costs for raw materials will make Dell hardware commodity to increase in the future, leading to a low-profit margin. The growth of the computer market is slow due to stiff competition from Apple, Acer, Lenovo, HP, and Toshiba.

The SWOT analysis indicates that Dell is a well-developed company where its strengths outweigh the weakness. For instance, by maintaining customer satisfaction and proper logistics system and production make the company increase sales in the market. The primary opponents of Dell are HP, Microsoft, E-Machines, and Sony (Richardson and Evans 2007, p. 2). Therefore, the company needs to use strength to overcome improve customer relationships to market opportunities. Also, Dell needs to minimize threats and maximize opportunities.

PESTLE Analysis of Dell Corporation

In undertaking a marketing audit, it essential to analyse external factors that affect the decision making of an organization and how they impact the objective setting and market strategy (Solcansky and Simberova 2010). Hence, the PESTLE analysis of Dell organization includes;

Political Factors

These include legal issues and government regulations that determine the conditions in which the corporations have to the operative. Dell faces challenges in some nations, which has political instability. Various countries have restrictive policies like multinational corporation regulations and trade quotas that protect domestic production and manufacturing. These policies tend to affect foreign organizations from entering or investing in these markets. The only way to transact with those nations is to partner with local companies like a strategic alliance or joint ventures to offer resources regarding local culture, technological knowledge, and money.

Economic Factors

Economic conditions affect both the supply or demand, cost, and capital as well as government and political policies. The Dell industry is expected to grow, with almost ten percent in the coming years. The growth is impacted by customer's purchasing power and economic conditions of the particular country. Currency fluctuations and change in inflation rates also influence the company's profits. For instance, some countries like Asia provide an opportunity for Dell growth since, in 2016, the growth rate was approximated to 6.3%, in 20017, 5.9%, and 2018 6.3% (Jobber and Ellis-Chadwick 2013).

Social Factors

The social factors represent the taste and demand. Pricing and promotional strategies change depending on market saturation to cope with customer's tastes and preferences. The computers demand may depend on the education level of a particular country since the high level of the educational standard in a given state, the increase the customer's expectations. Demographics factors affect the demand for technology devices such as ages, regions, employment rates, and affluence. For instance, more youth uses computers than aged people either in watching or doing online activities.

Technological Factor

Modern technology can be useful in services and manufacturing for additional output. For instance, Dell Company in Malaysia is prevalent in manufacturing quality and affordable laptops like Dell Studio and Inspiron, which suits the taste and income earners. Thus, people desire to purchase advanced technology, which boosts their innovations in various disciplines that are schools, workplaces, or hospitals.

Legal and Environmental Factors

Dell faces legal challenges associated with changes in e-commerce and consumer protection, employment laws, data protection, and copyright, and patents. Besides, the environment factors that Dell encounters include; weather conditions, water, and air population in the diversified computer system.

From PESTLE analysis, the most problem that is facing the Dell Corporation is an increase in bargaining power. The bargaining power for buyers increases due to a rise in competitive markets that offer services, warrant, and discount to switch clients into one brand (Lipnicka and Dado 2013, p. 756). Other gadgets like mobile phones are challenges to Dell because of features that are similar to laptops. Thus, Dell encounters competition from substitute commodity manufacturing firms. However, more research is needed to determine how Dell Corporation is planning to have new items and distribution strategy soon.

References

Jobber, D. and Ellis-Chadwick, F., 2013. Principles and Practice of Marketing, 7th edn, Berkshire.

Richardson, M. and Evans, C., 2007. Strategy in Action Applying Ansoff's Matrix. Manager: British Journal of Administrative Management, 59(1), pp.1-3.

Lipnicka, D. and Dado, J., 2013. Marketing audit and factors influencing its use in practice of companies (from an expert point of view). Journal of competitiveness, 5(4).

Solcansky, M. and Simberova, I., 2010. Measurement of marketing effectiveness. Economics and management, 15, pp.755-759.

Passemard, D. and Kleiner, B.H., 2000. Competitive advantage in global industries. Management research news, 23(7/8), pp.111-117.