Tuesday, July 24, 2012


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Dell Computer Company sells custom built computers directly to the customer wherever in the world. With the power of direct and Dells team of talented people, it provides customers with superb value; high-quality, relevant technology; customized systems; superior service and support. Dell will establish a new direction, create a new method and search for a new track to make the products and services that are easy to buy, use and recycle. Dell will become the best computer company in the world and people will regard Dell as their fist choice. Dell can help people to change their ways on work, study and communion with each other. Dells greatest source of optimism lies with customers and Dells dedication to these principles continues to benefit customers first.

External Audit or Assessment

External audit can approximately separate to 5 parts (1) Economic forces () Social, Cultural, Demographic, and Environmental forces () Political, Legal, and Governmental forces (4) Technological forces (5) Competitive forces. The changes of external audit will influence the variety of the products and the requirements of the consumers. If we can realize and utilize the external audit then we can catch the opportunity and make a success in the competitive market.

Now, aim at Dell Computer Company, we choose some primary forces, which can make great opportunity or crisis to Dell, as our focuses.


Since the American market occupied 70% of Dell¡¯s net revenue in 00, so we will focus on it to illuminate the effects of economic forces. Some examples are listed below

(1) US Economy Stays Lackluster In 00 Q1

¡°The US economy continued to struggle in the first quarter of the year. Real GDP grew at an annual rate of 1.6% in the first quarter, a minimal improvement from the sluggish 1.4% pace of the fourth quarter.¡± [1]

The US economy continues to disinflate. It is undermined in part by the uncertainty relating to the Iraqi war and the relationship between US and Euro. The purchasing power of the customers as a whole will drop. And also, for the individuals, people will reduce their consumption on the high-technical products. Some ones maybe delay their plans on buying a new computer or updating the old one, which means computer companies, will decrease their shipment. Other people who have to equip one will make their purchase plan more prudent. That is, they will give up extravagant accessories to save money. So, Dell, if he can provides custom build, high performance-price rate computers, he will become consumer¡¯s first choice. Then the disadvantageous factor, lackluster of the US economic, will change to an opportunity to Dell.

() US Employment Stays Weak

¡°Weakening confidence has also contributed to firms holding back on hiring. As a result, employment has declined in three of the last four months through March by an average of around 100,000 per month. ¡°[]

High unemployment-rate will change the consumer¡¯s method of purchasing. With the unemployment-rate raising, when people feel there are so many uncertainties in the future in their life, they will save money to avoid the risk and they wouldn¡¯t spend money especially on the high-technical consumable. This will strike the IT industry and Dell can not get away.

() War in Iraq and Its Aftermath

From the left fig [], we can predict that, like the Gulf War I, the US business confidence will comeback to a proper level quickly after the Iraq War.

The war with Iraq is not helping given it may ultimately add to instability in the Middle East but will inspire more mass terrorist acts. It wills likely act to ensure that we remain in a low return environment for shares for some time to come. The share markets remain cheap relative to other financial assets and the investor sentiment is still very negative. Along with this, Dell should establish a longtime stratagem to deal with the uncertain of the states of the global economic development.

(4) SARS (severe acute respiratory syndrome) Impact IT Supply Chain

The spread of SARS is already affecting professional sports and the airline and tourism industries and it could impact IT supply chain. ¡°At a minimum, the SARS epidemic will cause schedule slippages and disrupt the aggressive growth plans that global electronics companies have for the affected geographies.¡±[4] ¡°Theres a risk that Western tech brands that outsource to Taiwanese companies will gradually adjust their strategies and support contract manufacturers with plants elsewhere to avoid putting all of their eggs in one basket.¡±[5]

Many accessories and main parts are manufactured in P.R. China and other Asian countries. Because of SARS, the plants have to face the threat of stop production. To the computer companies, this accident will influence the shipment and the contracts. Besides the supply, they may also have the problems in marketing, for people are required to stay at home. Dell should increase his purchase channel to ensure his accessory¡¯s quantity and quality, then Dell will maintain his produce-and-sale¡¯s chain.

(5) Competitive Forces from HP & IBM

HP-Compaq and IBM are two of the mainly competitors to Dell in the computer market. Well know the competitors are very important to design Dell¡¯s stratagem.

¡°HP has done a terrific job in lowering costs and improving margins. It became the No. computer maker. HP competes against IBM in the market for profitable server- and mainframe-like computers and computer services, and against Dell in personal computers and low- to mid-range servers that use Intel microprocessors.¡±[6] Now, HP sharpens dual-brand PC focus. ¡°HP wants to use the two brands to go after two distinct segments of the market, with HP attacking the high-end and the Compaq brand designed to compete on price and on bang for the buck.¡±[7]

¡°Although our revenue from continuing operations of $81. billion was off percent from 001 and our earnings decreased 5 percent, to $5. billion, all of our core businesses¡¬™from servers to storage systems, to middleware, to services-gained market share in 00. This is important. It means we will emerge in an even stronger position, relative to our competitors.¡±[8]

Now, HP and Compaq have well off finished their incorporate, new company has build a new stratagem for his development. IBM has changed his main-focus and stratagem on the service. Dell cannot reduce his attention on his competitors, on the contrary, he must find out his competitors¡¯ strong suits and shortages. Dell is well positioned to leverage its business model with 7 percent operating margins versus below breakeven for both (HPs) and (Compaqs) PC divisions. He has got the advantages on the market share and customer¡¯s satisfaction. It is Dell¡¯s predominance and he must keep it. But, for the services-gained market is a high-return field and it is just the shortage for Dell. So, Dell must expend his work field and can¡¯t be focus on the computer only and to get a new profit gained-point.

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