Within few years of its start-up, Dell has been placed to be 25th in the list of computer manufacturers worldwide, all but Dell have gone out of the market to become a fortune 500 company by 1992 (Holzner 2006, p. 5). …
This research paper presents five forces analysis of Dell Inc to analyze major factors and competitive elements and to assess how successful and effective is the company. The five force analysis, introduced by Michael Porter, can be used as a tool to measure the competitive rivalry and to assess whether the company has achieved sustainable competitive advantages or not.
The five force Model
The modern economy and international business environments have recently been largely influenced by various critical factors including globalization, fierce competition and advanced technology etc and therefore, as Michael Porter argued, business strategy equates to how a firm competes with other firms in the industry. According to his findings, strategy is not just a series of models and methods at corporate level, but rather it includes analyzing potential entrants, suppliers, buyers, substitutes and competitors (Stahl and Grigsby, 1997, p. 145). The five forces model has widely been applied as an important functional area of management and business academics. Almost all managers and large companies depend on porter’s five force analysis to find their marketing strengths and competitive advantages.
Harvard professor Michael E. Porter has developed Five Force model in 1980s to help companies identify what specific forces determine the profits in an industry. Any particular firm in an industry faces various forces within the industry affecting the profitability significantly. Some of such determining factors are competitive rivalry, potential entrants, threat of substitutes, bargaining power of buyers as well as suppliers. If a business is able to understand and analyze all these factors, then it would also be able to develop a business-level strategy to allow business either to take advantage or protect the business from these forces (Ahlstrom and Bruton, 2009, p. 131). Porter argued that each of the five forces determines how the firm would be able to perform in its marketing landscape. The stronger each of these forces is, the more limited is the ability of well-established companies to increase prices and earn greater amounts of profits. Competition rivalry, substitutes, potential entrants, power of suppliers and buyers thus directly impact the profitability as well as effective and smooth functioning of the business (Hill and Jones, 2007, p. 45). The five factors can greatly influence various aspects of the strategies of a company. for instance, if consumers of the company have considerable bargaining power, it will largely impact the business strategy of that company. Similarly, if more number of suppliers are available and there is increased possibility of getting better supplies for comparatively cheaper amounts, the company will be more likely to achieve relatively better competitive advantage as well (Kurtz, MacKenzie and Snow, 2009, p. 57). Competitive rivalry is one of the five forces and is influenced by the other four forces. A company that operates in a market where there are larger numbers of substitutes, more powerful buyers and suppliers and there are chances for new entrants faces relatively more severe competition. A company would be able to flourish if it is able to fence off new entrants and substitutes. Dell Inc: Company Profile For several ...
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Dell Incorporation (Dell Inc.) is regarded as one of the global leading IT (Information Technology) organisations which offer broad assortment of computing solutions as well as services to its potential global customers. The organisation directly provides its different effective services through its own distribution channels throughout the globe.
The company had gone through many ups and down from its inception in 1984 and has to face many challenges and competitions to stay ahead in the market (Kolter and Lee, 2008). This paper strategically discusses the fall and rise of Dell Inc from 2007 to 2008 and to compare Dells strategy with that of Hewlett Packard with due reference from the case study “Dell Inc in 2008: Can it overtake Hewlett Packard as the worldwide leader in personal computers.” A) Dell’s Strategy to overcome HP in Personal Computers Michael Dell founded the company with simple vision and business concept that the personal computers could be built and sold directly to the consumers which would eliminate the additi
Majority of modern organizations are currently using Porter’s five forces theory to determine their competitive power in the market. I am currently working in hospitality industry and my organization has intentions to diversify its activities to banking sector.
Dell Incorporated is headquartered in Rock Round, Texas. Dell, Inc. and its subsidiaries are actively involved in the design, development, manufacture, marketing, sale, and support of a range of computer systems and services worldwide. The main business activity of Dell is in the provision of products and services to customers, which enables them to establish their information technology and Internet infrastructures (About Dell 2004).
has continued to be a leader in the marketplace. Dell's greatest challenge was entering the global marketplace with operations in China. Currently (2004) Dell has 18.2% of the global market share in the computer industry. The company has continued to have increased sales (currently about 8 million).
This is what Dell, Inc. can give you as an investor. Let me show you why.
As a computer manufacturing company that has 18% - 19% of the global personal computer market, in comparison to Hewlett-Packard's 15%, Dell, according to Wikipedia, "manufactures more computers than any other organization in the world (Dell, 2006)." As a company that employs more than 63,700 people worldwide, it had reached the top spot on Fortune magazine's America's Most Admired Companies in February 2005.
For Dell, this process is becoming imperative if the company wants to re-secure its position of dominance which it held during the early 21st century.
As the company considers porter's five forces, the Force of Buyers exerts less pressure on the company than the other four.
Since technology is changing so rapidly, Dell computer must also look to the future, and address forces which will affect their business if they wish to stay in the forefront of the marketplace. One of these forces is Porter's force of the Threat of Substitutes.
nchmarks such as potential entrants, supplier power, industry rivalry, buyer power and threats from substitute products for determining the strengths and weaknesses of an organization. Majority of modern organizations are currently using Porter’s five forces theory to
As the case writers Simchi-Levi. Kaminsky and Shankar (2008) point out, number of factors including chipset supplier decommit issues, engineering issues, Dell forecast accuracy, and new product introduction contribute to the firm’s inability to deliver
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