Dell's Strategy 10-K

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

ANS: In the report it states that Dell’s strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use (Dell’s 2005 Form 10K). Dell uses a combination of the three value proposition, but I do believe that the one they rely on the most is customer intimacy. Dell listed a list of their tenets for the strategy. The report expressed that a direct approach is the most efficient path to customers. Dell really focuses on their customer needs and will go out of their way to accommodate that strategy.

2. 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.)

ANS: With the economy crisis in the U.S, every business faces several difficulties or challenges to meet the stockholders expectation. Listed below are some of the factors affecting Dell’s revenue and profits:

• General economic, business, or industry conditions may result in a decrease in net revenue.

• Dell’s business is extremely competitive and no assurances can be offered that Dell can maintain its competitive advantage.

• A substantial portion of Dell’s net revenue is dependent upon international sales, which are subject to risks and uncertainties. Sales outside the U.S. accounted for approximately 38% of Dell’s consolidated net revenue in fiscal 2005. Dell’s future growth rates...