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Angela Suarez Lozano_S40031030

AUSTRALIAN PACIFIC COLLEGE

BSBMGT616A DEVELOP & IMPLEMENT


STRATEGIC PLANS
STRATEGIC PLANNING

Angela Suarez Lozano


6/27/2013

BSB60407 Advanced Diploma of Management


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Angela Suarez Lozano_S40031030

TABLE OF CONTENTS
DELL COMPUTERS CASE STUDY
A. SWOT ANALYSIS ............................................................................................................. 3
B. PEST ANALYSIS ............................................................................................................... 4
C. RELEVANT LEGISLATION INFLUENCE IN BUSINESS OPERATION .................................... 5
D. CODE OF PRACTICE........................................................................................................6
E. PORTERS FIVE FORCES ASSESSMENT...........................................................................7
DELL COMPUTERS STRATEGIC PLAN
STRENGTHS, WEAKNESSES, THREATS & OPPORTUNITIES.............................................9
PURPUSE.....................................................................................................................10
BUSINESS.....................................................................................................................10
VALUES........................................................................................................................10
VISION.........................................................................................................................10
MISSION......................................................................................................................10
BUSINESS OBJECTIVES.................................................................................................11
KEY STRATEGIES..........................................................................................................11
MAJOR GOALS.............................................................................................................11

Angela Suarez Lozano_S40031030

A. SWOT ANALYSIS DELL COMPUTERS

SWOT Analysis
STRENGTH

1. Price Performance
2. Wide range of products and services including
customization
3. Latest Technology
4. High quality customer service: direct sell to
customers (meeting personal needs more
effectively, in-person relationships, etc)
5. Financial stability

WEAKNESS

1. High competition in this segment


2. Keeping consistency and quality while providing
the latest advance technology (occasionally the
latest products of the market have flaws that
require redesign)
3. Solve technological errors in devices

OPPORTUNITY

1. Taking over, merging, or forming strategic


alliances with other computing companies
2. Continuously expanding (value-added services,
new markets outside the U.S.)
3. Merchandising
4. Loyalty offers, packages, discounts or pay on a
monthly basis options

THREATS

1. Consistently transforming industry


2. Highly competitive (entry of foreign players)
3. Depreciation of the U.S. dollar, decline in revenue
4. Global financial crisis

Angela Suarez Lozano_S40031030

B. PEST ANALYSIS DELL COMPUTERS

A PEST analysis is an analysis of the external macro-environment that affects all firms. PEST
stands for the political, Economic, Social, and technological factors of the external
environment. Such factors usually are beyond the firms control.

Political factors
Political factors have an important effect on an industry development. Chinas current
political situation can be defined as stable. After the reform and openness in the late 1970s,
the government in China has devoted to create a stable political environment to drive the
development of economy. China maintains good relationships internationally attracting
many foreign enterprises to invest in China in the past twenty five years. Almost all the main
foreign PC makers have entered the market of China through direct investment.
The government of China has greatly reduced the direct interventions in industry
developments which are no longer planned by the government but based on the needs of
the market. On the other hand, with China's joining into WTO, China' government has
gradually released the restrictions of many industries and free development and
competition is encouraged.
Without the government interventions and policy restriction, the communication and
cooperation in PC industry is enhanced. The entry of foreign PC makers brings with the
technologies and experiences so that drives the development of PC industry in China.

Economic factors
In the past few years, China's economy has been keeping a rapid growth. The Socialist
market economy of China is the world's second largest economy by nominal GDP and
by purchasing power parity after the United States. It is the world's fastest-growing major
economy, with growth rates averaging 10% over the past 30 years.
Some economic challenges are yet to be confronted. These include, social safety net, job
growth sustainability, corruption and economic crimes and possible environmental damage
caused by the rapid transformation of the economy.
However, foreign trade and foreign direct investment are the forces to drive the
development of economy in China. And the rapid growth of China's economy has driven the
development of different industries in China including the PC industry. In addition, it is
expected to keep growing in the future.

Angela Suarez Lozano_S40031030

Social factors
Social and cultural factors also have an important effect. In the early periods of the
development of PC industry in China, PC was only used in the companies and was looked as
a tool for work. But with the development of economy and society, computers began to
enter the life and home of people.
Computers are increasingly becoming a necessity for enterprises and users for Peoples
Republic of China. The current PC-density in big cities of China is very high and the
computers industry is rapidly growing.
The market in the small cities and countryside has big potentiality, as well as, the new
generations born under its influence. PC is expected to play a more and more important role
in the Chinese society.

Technological factors
Technological innovations have an important effect on the development of the PC industry.
When PC emerged in the market, the high cost restricted the development and popularity of
PC in China. But with the development and innovation of the technology, the cost of PC has
been greatly reduced. PC now is a normal commodity in China that can be afforded by many
people. On the other hand, the quality of PC products is continuously enhanced by
technological innovations. The technologies of PC develop very fast. The development of
technologies leads to the fast update of PC products and the consumers can use the PC with
newest technologies within short periods of time. So the technological development and
innovation makes the price of PC cheaper and the quality of PC better.

C. US-CHINA BILATERAL AGREEMENT LEGISLATION

Like in all markets, DELL computers is also subject to laws that regulate virtually all aspects
of their business, including such areas as health safety, pollution, and advertising and
labelling requirements. Problems can arise in countries where political stability is not
guaranteed. Many countries still have restrictive policies which are maintained to protect
domestic manufacturers and production. Such policies often hinder foreign companies from
entering into these markets. The only possibility to do business in those countries is to
establish partnerships with local companies, where they are additionally forced to accept
minority shares and to provide money and technological know-how.

Angela Suarez Lozano_S40031030

U.S.-China trade rose rapidly after the two nations reestablished diplomatic relations and
signed a bilateral trade agreement (July 1979) providing mutual most-favored-nation (MFN)
treatment.
China's commitments according to this legislation will eliminate broad systemic barriers to
U.S. exports, such as limits on who can import goods and distribute them in China as well as
barriers such as quotas and licenses that restrict imports of U.S. products.
China has made commitments in all major service categories with reasonable transitions to
eliminate most foreign equity restrictions (especially in sectors where the U.S. has a strong
commercial interest), agreeing to accede to the Basic Telecommunications and Financial
Services Agreements, and "grandfathering" of current market access for U.S. service
providers.
In addition, trading rights and distribution are the major priority of the manufacturing
sector. At present, China severely restricts trading rights (the right to import and export)
and distribution (wholesaling, retailing, maintenance and repair, transportation, etc.). Under
the Agreement, China will provide, for the first time, trading rights and distribution rights to
U.S. firms. Trading rights will be progressively phased in over three years. Distribution rights
will be provided even for China's most restricted distribution sectors such as wholesale,
transportation, maintenance and repair. China will provide for trading rights and
distribution.
All these and many other measures of this bilateral agreement greatly influence the U.S.
business operations in China.

D. CODE OF PRACTICE
Codes of Practice set out industry standards of conduct. They are guidelines for fair dealing
between you and your customers, and let your customers know what your business agrees
to do when dealing with them. Codes of Practice can relate to a single business, or represent
a whole industry.
An organization can establish their own Code of Practice, or to adopt an industry specific
Code of Practice (in some cases this is mandatory).
Code of Practices aims to prevent corporations and businesses, including the computer
industry, from:
behaving anti-competitively or unconscionably
contravening an industry code of practice

Angela Suarez Lozano_S40031030

treating consumers unfairly or deceptively


limiting third party access to nationally significant infrastructure
reducing competition in the telecommunications industry.

E. PORTERS FIVE FORCES ASSESSMENT

The Porter's Five Forces tool is a powerful tool to assess the forces that influence our
business, including strengths and weaknesses, understanding better the industry and the
competition operating in it.
This is useful, because it helps you understand both the strength of your current
competitive position, and the strength of a position you're considering moving into.
With a clear understanding of where power lies, you can take fair advantage of a situation
of strength, improve a situation of weakness, and avoid taking wrong steps.
Factors to be considered and analysed through Porters Competitive Forces include:
SUPPLIER POWER
- Number of suppliers
- Size of suppliers
- Switching costs
- Unique service/product
- Ability to substitute
- Examples: suppliers of processors and computer memory (Motorola, IBM,
Intel)
BUYER POWER
- Number of customers
- Buying volumes
- Differentiation
- Price elasticity
- Incentives
- Brand identity
- Switching costs
- Examples: retailers may pressure for lower prices or better terms
(Distributors), consumer/business may reduce spending on computers if they
fear economic downturns
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Angela Suarez Lozano_S40031030

COMPETITIVE RIVALRY
- Number of competitors
- Exit barriers
- Niche, quality
- Differentiation
- Switching Cost
- Industry concentration
- Diversity of competitors
- Examples: alternative sources of computer hardware (HP, Mac, Lenovo),
small stylish MP3 players (Creative, Samsung, Sony)
THREAT OF SUBSTITUTION
- Substitute performance
- Cost of switching
- Buyer willingness
- Examples: entertainment media, media and music (XBOX,PS)
THREAT OF NEW ENTRY
- Time and cost of entry
- Knowledge
- Economies of scale
- Cost advantages
- Technology
- Barriers
- Examples: Streaming audio and video with v-cast (Verizon), new entrants
with disruptive technology.

Angela Suarez Lozano_S40031030

STRATEGIC PLAN FOR DELL


This document sets out a strategic plan for DELL. It reviews strengths, weaknesses, threats
and opportunities; presents a series of statements relating to DELLs purpose, vision,
mission, values and objectives.

Strengths, Weaknesses, Threats & Opportunities


This strategic plan addresses the following key Strengths, Weaknesses, Threats and
Opportunities for DELL:

SWOT Analysis
STRENGTH

6. Price Performance
7. Wide range of products and services including
customization
8. Latest Technology
9. High quality customer service: direct sell to
customers (meeting personal needs more
effectively, in-person relationships, etc)
10. Financial stability

WEAKNESS

4. High competition in this segment


5. Keeping consistency and quality while providing
the latest advance technology (occasionally the
latest products of the market have flaws that
require redesign)
6. Solve technological errors in devices

OPPORTUNITY

5. Taking over, merging, or forming strategic


alliances with other computing companies
6. Continuously expanding (value-added services,
new markets outside the U.S.)
7. Merchandising
8. Loyalty offers, packages, discounts or pay on a
monthly basis options
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Angela Suarez Lozano_S40031030

THREATS

5. Consistently transforming industry


6. Highly competitive (entry of foreign players)
7. Depreciation of the U.S. dollar, decline in revenue
8. Global financial crisis

Purpose
To provide customers with superb value technology
Business
High quality, relevant technology and customized systems
Values
Superior service and support, easy to buy, easy to use
Vision Statement
Its the way we do business. It's the way we interact with the community. It's the way we
interpret the world around us-- our customers needs, the future of technology, and the
global business climate. Whatever changes the future may bring our vision -- Dell Vision -will be our guiding force.
So Dell needs full customer satisfaction. In order to become the most successful computer
company, they need the newest technology and loyal customers.
Mission Statement
Dell's mission is to be the most successful Computer Company in the world at delivering the
best customer experience in markets we serve. In doing so, Dell will meet customer
expectations of:
-

Highest quality
Leading technology
Competitive pricing
Individual and company accountability
Best-in-class service and support
Flexible customization capability
Superior corporate citizenship
Financial stability

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Angela Suarez Lozano_S40031030

Business Objectives
-

To provide a great customer experience, which requires a workforce reflective of


our customers
To access the best and brightest talent the marketplace has to offer
To focus on global expansion with employees who understand the various cultures,
giving us a competitive advantage

Key Strategies
- Networking & Referrals - Using existing contacts and clients to build a larger network
of potential clients.
- Web promotion more agresive providing an "electronic brochure" as well as useful
technical information free of charge.
- Advertising - Traditional methods such as Yellow Page ads, newspaper classified and
display ads, local television cable access advertisements.
- Non-traditional - Creative and unique advertising such as door hangers, bumper
stickers, etc.
- Accelerate product launches
- Appoint advisers to reach the younger generation of kids.
- Seek new market segment/application for products.
- Develop overseas market entry plans.

Major Goals
1.
2.
3.
4.
5.

Increase profitability by 15% by 2015 Marketing team.


Increase yearly sales 20% by 2014 Marketing team.
Increase customer satisfaction reports 2016 Human resources & Customer service.
Training/Professional development of staff by 2014 Human resources & Admin
Staff.
Meeting stated goals around sustainability, engaging our communities and other key
areas by 2020 Sustainability team.

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