Dell's Strategy for Success

Dell, Inc.
Sharon Welch
Ashford University
BUS630: Managerial Accounting
Instructor: Isabel Wan

  A. What is Dell’s strategy for success in the market place? Does the company rely primarily on customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?                                                                                    

Dell’s strategy combines its direct business model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. Dell relies on customer intimacy and assures marketplace will be successful, and have the key tenets of forefront for their business strategy. Dell’s objective is to maximize stockholder value while maintaining a balance of three key financial metrics: liquidity, profitability, and growth.

  B. What business risks does Dell face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 7-10 of the 10-K).
General economics, business, or industry conditions may result in a decrease in net revenue. Dell’s revenue could deteriorate as a result of macroeconomic trends in both the U.S. and abroad. If the economic climate deteriorates, customers or potential customers could reduce or delay their technology investments. As a result, Dell’s net revenue and profitability could be negatively affected. If Dell is unable to maintain its competitive advantage, a loss of market share, revenue, profitability may result. A substantial portion of Dell’s revenue is dependent upon international sales, which are subject to risks and uncertainties. Local economic and labor conditions, political instability, unexpected changes in the regulatory environment, trade protection measures, tax laws (including U.S. taxes on foreign operations), and foreign currency...