Poters 5 force - Dell

FIVE FORCES MODEL FOR DELL

BY:

BACHU VINAY CHAITHANYA

Dell Inc.Name Dell Inc.

Industries served Computer Hardware, Software, IT Services, IT Consulting

Geographic Served Worldwide

Headquarters U.S.

Current CEO Michael Dell

Revenue $ 56.94 billion (2013)

Profit $ 3.12 billion (2013)

Employees 115,000 (2013)

Main Competitors Apple Inc., Samsung Electronics, Lenovo, HP, Sony, Asus and Many others

The bargaining power of suppliers Power is high where the brand is powerful.

Dell Company never sticks to one supplier forever.

 Indication of Dell to be in better position than its suppliers is that Dell got most of its suppliers locate their businesses and manufacturing units close to Dell’s manufacturing and assembly units.

Moreover, suppliers can regularly supply their inventories to Dell within hours of assembling the computers which indicates a strong corporate understanding of both Dell and its suppliers.

Threat of new Entrants Dell is worried about his business empire is the possibility

of new entrants to the market who could adversely affect his business. And moreover, Dell’s new strategy is the product diversification, therefore,  almost all electronic companies are potential entrants to this new market.

Bargaining Power of Customers

One of the competitive advantages Dell has gained has been through offering in-person relationships with corporate and institutional customers.

Corporate clients can go to Dell’s special website called Premier Dell.com and configure computer systems in regard to the price and specifications.

Post sales online supports which are online and in some cases the company engineers can even visit the customer sites.

COMPETITOR RIVALRY

THREAT OF SUBSTITUTES Apple Mac because of lack of innovation in Windows

Windows being the alone supplier of operating system, Dell are dependent on Windows.

More differentiation among the products offered by competitors

(Sony- Stylish, Lenovo- Low Range Market etc.)

Acer offers warranty more than Dell and offers international warranty.

Not offering Windows 7 on new laptops.