Question

Low investments in R&D are one of the weaknesses of Dell. what steps the company can take to turn it into strengths?

Please explain in details

Answer 1

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Abstract

Dell Inc. is an American multinational computer technology corporation that develops, sells, repairs and supports computers and related products and services.

The company is one of the largest technological corporations in the world and is listed as number 44 in the Fortune 500 list. It is the third largest PC vendor in the world after HP and Lenovo.

Below are the SWOT Analysis of Dell

Strengths

1. Brand name valued at $7.5 billion
2. Product customization
3. Environmental record
4. Competency in mergers and acquisitions
5. Direct selling business model

Weaknesses

1. Commodity (computer hardware) products
2. Poor customer services
3. Low investments in R&D
4. Weak patents portfolio
5. Too few retail locations
6. Low differentiation

Opportunities

1. Expand services and enterprise solutions businesses
2. Obtain more patents through acquisitions
3. Strengthen their presence in emerging markets
4. Tablet market growth

Threats

1. Growing demand for smartphones and tablets
2. Profit margin decline on hardware products
3. Slowing growth rate of the laptops market
4. Intense competition

We will see the solution for one of the weakness of Company that is " Low investment in R & D " Below listed are already possessed Strength of Company.

1. Brand name. Dell has a very strong brand reputation for quality products. Its brand is valued at $ 7.5 billion.
2. Product customization. Dell allows its customers to customize their laptops. Such services were not originally found within any other major computer retailer (and currently only Sony and Toshiba allow that), but add great value to the customers and provides Dell with a competitive advantage.
3. Environmental record. Dell is engaged in many green initiatives and has received many rewards for being an eco-friendly business. This is a benefit when working with public and government agencies.
4. Competency in mergers and acquisitions. Over the last five years Dell has spent $13 billion for successful mergers and acquisitions, which brought patents, new capabilities, assets and skills to the business.
5. Direct selling business model. Dell doesn’t sell its products through big-box retail outlets but instead sells directly to consumers and enterprises, keeping their already thin profit margin to themselves.

Solution to Turn Weakness into Strength

Need to increase the spending on research and development.

Dell Technologies need to spend more money on the research and development of new products.

Though, given their position in the industry, they feel it’s unnecessary. But that can’t be, given they missed their chance to expand into the smartphone and tablet industries.

Competing in this space is now difficult, considering how many other companies are either at the top or vying for space in the market.

Recently, Dell CEO Michael Dell said the combined Dell-EMC will spend $4.5 billion on research and development, nearly twice the level of rival Hewlett Packard Enterprise.

Dell has taken decision to give R&D investment priorities to cater the demand of new strategy that is focused on to build a $75 billion IT behemoth with a product line that runs from client systems to the data center.

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