MANAGEMENT OF STRATEGY

Management of Strategy



Management of Strategy

1. Based on an assessment in Dell's external environment, identify the threats that Dell is facing. What actions can Dell take to manage those threats?

Computer industry consumers have traditionally been notoriously fickle in their buying habits and trends, affected by the rapid pace of technology and the burstingDot.com Economy. While the growth of the Internet should produce more demand for servers and storage, those markets will test Dell in areas that haven't been its strongpoint: sophisticated product engineering and labour-intensive services.

Following are the corporate level strategic options available to Dell. Dell should maintain status Quo and continue to do more of the same. "If itain't broke don't fix it". Many people believe the recession will end soon, so Dell could just ride it out and hope to hang onto the marketshare it currently has. This option is nota proactive approach and could prove to be risky, resulting in declining market share, lower profits, and the possibility of the competition advancing while Dell stays stagnant.

Pursue Mid-Range Server Growth. By 2001, Dell was the market leader in entrylevel servers, but had no presence in the mid-range server market.

Pursuing thisgrowth option could result in increased market share and higher profits due to the higher selling prices and markups of these units, but could be risky if technologysuddenly changes.

Increased post sale costs are also a concern, as server salesdon't just stop upon delivery; they require continued service regarding reliability, serviceability, availability, and manageability.

Increase product line: By introducing new products like a PDA, Dell can capturenew markets and increase sales and awareness. This option contains increased risk and high initial start-up costs.

Pursue Associated Services Growth - within the US, 2000 service revenuesaccounted for over 37% of $2 billion in total revenues. This business unit wasbecoming an increasingly important part of Dell's portfolio with longevity, able tostand the test of time and market uncertainty, no matter what turn technologytook.

Target new segments and enter new marketswith existing products. The Potential benefits of international expansion are increasedmarket share, revenues, profit, and buyer awareness. However, the successful DellModel might not work everywhere. The product chosen for expansion should be acommodity where the demand is already in place and the country must also value on-timedelivery. By acquiring an innovative leading company like the EMC Corporation, Dell can effectively enter the external storage and software market previously untapped, leveraging EMC's expertise ...