Swot Analysis Of Dell

CASE ANALYSIS- STRATEGIC MANAGEMENT

The purpose of Case study is to apply the concepts of strategic management to the facts related about a company's situation and performance and to make recommendations about its future course of action to enable it to compete with sustained advantage in its business environment. It is necessary therefore to develop an appropriate framework to do this. Depending upon the number of times a case is read and the care taken over it, the quality of analysis is likely to be detailed and focused. However it is possible to develop a reasonably good broad understanding that will permit an acceptable level of analysis and basic recommendations even after one reading provided the student knows what to look for and determine as relevant to the case study.

Generally detailed analysis of a case should include the following:

1) The history development and growth of the company over time

2) The vision of the company either explicitly stated or implied from the facts of the case.

3) The company's business definition i.e. what business the company is in and its unique position in the competitive space

4) Environmental analysis both internal and external

5) Business strategies

6) Growth and Diversification strategies

7) Functional strategies, structure and control systems

8) Financial analysis including Balance sheet and profit and loss statement analysis. Analysis should include capital structure debt/eqity, profitability and liquidity indicators

9) Recommendations

History and Development: Investigate the company's past strategy and structure through critical incidents in its history. Note the incidents must be quoted to support analysis and not merely be repeated from the case without comment. Events connected with the circumstances of its founding, the background and aspirations of its founders, its decisions about which markets to enter, the initial products, the technologies adopted, the organization structure employed, the state of the industry at the inception of the company are areas to be covered. The financial structure of the company including owner's stake is another relevant factor. The growth and development of the company from its founding to its present state are to be noted and commented upon.

Vision and Business Definition: Some companies especially large established companies have vision and mission statements. Several have no formal vision statements including renowned companies like Microsoft. Often firms make up vision statements which could fit any company e.g. "To be the leader in our business and to provide total satisfaction to our consumers". The vision statement can be derived from what business the company is and more importantly should be in and in what unique ways it is an outstanding competitor in its business environment. This constitutes good Business definition: Thus we have developed a vision statement for Microsoft which says "Leadership in the PC related software industry through inspired followership". If a company through its decisions and its business activities demonstrates a lack of vision, it is very unlikely to succeed long term and probably will not even survive. On the other hand a company that understands the business it is in and that happens to be the business it should be in, and has and uses unique competences, it is more than likely to be a competitor with sustained advantage. Beyond good business definition, a truly successful company incorporates into its vision a concern for its stakeholders and plans to meet their respective requirements. Thus a company would build in long term wealth creation for its shareholders, a high level of belonging and motivation for its employees, a concern to be a good corporate citizen complying with the laws of the land in letter as well as spirit, and to spread prosperity and goodwill throughout the larger community in which it resides, and is a part of.

Environmental Analysis: This is the most important part of the strategic analysis exercise. We have been exposed to the SWOT model and the Porter's 5 forces model. Both of these are important tools for the manager. The 5 forces model analyses the industry environment from its individual perspectives of threat of new entrants, threat of substitutes, power of buyers, power of sellers and internal rivalry. The net conclusions to draw from this model is the relative attractiveness of the industry from the incumbents' point of view and the forces which principally affect it, be they the power of sellers, buyers, threat of substitutes, threat from potential entrants or internal rivalry. The conclusions are common to all the incumbents. Therefore specific strategic analysis and recommendation w.r.t. internal industry competitors is not within the scope of this model. SWOT on the other hand is more wide ranging because it can cover any aspect of a company's internal environment. Unfortunately charges have been leveled against SWOT that the analysis tends to be subjective and vague. Both these charges can be taken care of if firstly, the comprehensive share holder requirement is considered as mentioned in the earlier part of this note. Further a strength, weakness has to be assessed in relation to competitors within the industry and potential competitors from outside the industry. For example, if a company believes its Sales and Distribution is a strength, as in the case of Titan Watches it must have objective evidence that it has better distributors, dealers, and retail coverage both quantitatively and qualitatively than its competitors. Similarly opportunities and threats have to be evaluated quantitatively and qualitatively and in relation to the situation of competitors. For instance in the passenger car market, the major growth opportunity for the next several years will still be in the small car sector(800-1000 c.c.) where Maruti has the best prospects. G.M. or Ford cannot claim this as their opportunity because they do not have products to offer in this critical market segment. SWOT analysis should also cover the existing business and functional strategies of the firm. If all this is done the SWOT can provide a complete and exhaustive framework for environmental analysis.

Business Strategies: This term is not to be confused with the overall strategic plan. It refers to the option the company has to either adopt a cost leadership position in its industry, or to differentiate( charge