SWOT analysis for Dell
SWOT analysis to create a strong business strategy that has helped it become a very strong competitor in its industry value chain. Dell identified its strengths in selling directly to customers and in designing its computers and other products to reduce manufacturing costs. It acknowledged the weakness of having no relationships with local computer dealers. Dell faced threats from competitors such as Compact and MOM, both of which had much stronger brand names and reputations for quality at that time.
Dell identified an opportunity by toting that its customers were becoming more knowledgeable about computers and could specify exactly what they wanted without having Dell salesperson answer questions or develop configurations for them. It also saw the internet as potential marketing tool.
The results of dell’s SWOT analysis are:
Sell directly to consumers
Keep costs below competitors’ costs
No strong relationships with computer retailers
Consumer desire for one-stop shopping
Consumers know what they want to buy Internet could be a powerful marketing tool
Competitors have stronger brand names
Competitors have strong relationships with computer retailers
The strategy that Dell followed after doing the analysis took all for of the SWOT elements into consideration.
Dell decided to offer customized computers built to order and sold over the phone, and eventually, over the
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Dell’s strategy capitalized on its strengths and avoiding relying on a dealer network.
The brand and quality threats posed by Compact and IBM were lessoned by dell’s ability to deliver higher perceived quality because each computer was custom made for each buyer.