Dell

Competitiveness and Geo-economics
Final Project

Tanina Villanueva A01013846
Cecilia D´Hyver A01014782
Marcia Ceardi A01014568
Daniela Ruiz A01212570
Rodrigo Ibarra A01109957
Sebastián Rocha A0101
INDEX

1. Introduction
2. What are the industry dominant economic traits?
3. Market Structure
4. Porter’s Five Forces & Analysis
5. Driving forces of the industry6. Competitor Analysis
* Strategic Group Analysis of PC Industry
* Generic Strategy Analysis
7. Generic Strategy Analysis.
8. Who’s likely to make what competitive moves next?
9. What key factors will determine success or failure?
10. How attractive is the industry in terms of its prospects for above average profitability?
11. Globalization ClustersSpecialization

1. Introduction

Michael Dell, born in the United States, at age 19 decided to start a business in his room, although he was studying to be a doctor, he became interested in the computer business. It was not until 1984 that he created the company called "PC Limited", the company became profitable two years later and a year later they decided to change the name to "Dell Computer", whenthe company decided to expand their horizons they had go to change the name again to "Dell Inc".
In 1993 sales increased 40% and they decided to expand their company to a bigger market, so they decided to expand to Europe and America. Dell, the U.S. market is still stronger than Compaq, but in the international market Dell still has great opportunities of growth as shown throughout this document.Michael Dell was the # 18 richest man in the world according to Forbes. (With approximately 15,500 million dollars). The company started with a capital of about $ 1,000 and only two years later began with a 6 million dollar turnover. Today Dell`s profits are approximately $ 80 million dollars and is positioned among the 500 largest companies in the world.

2. What are the industry dominanteconomic traits?

MARKET OVERVIEW:
a) Value: The global computers & peripherals industry grew by 10.5% in 2010 to reach a value of $590.7 billion.
b) value forecast: In 2015, the global computers & peripherals industry is forecast to have a value of $816.1 billion, an increase of 38.2% since 2010.

MARKET SIZE:
PCs is the largest segment, accounting for 44.8% of the industry'stotal value. Hewlett-Packard Company is the leading player in the global computers & peripherals industry, generating a 14.4% share of the industry's value.

SCOPE OF COMPETITIVE RIVALRY:

According to Datamonitor, “the computers and peripherals industry is dominated by a number of large players such as Hewlett- Packard and Dell. The concentration of the industry is a continuing trend, withmerger and acquisition activity being common. This avoids threats from emerging companies, but rivalry is intense between the major players.” (Datamonitor, 2011)
Amongst the other companies that participate in the market are: IBM, Toshiba, Compaq, Mac, Lenovo and Asus.

THE MEXICAN MARKET:

“While Mexico’s economy faces a rocky ride in the medium term, some fundamental drivers will ensure agrowth trend across major consumer electronics segments. In the PC segment, several factors including low PC penetration, growing PC affordability and US corporate demand for IT outsourcing should help the computer market avoid stagnation. Demand is growing in all sectors, especially among small and medium-sized enterprises (SMEs) – which again will benefit from government initiatives – andeducation, where substantial new funding has been announced.

Overall, foreign PC brands claim a more than 50% market share of the Mexican PC market. Mexico is the
most important country for HP in the Latin American region, with indirect sales currently representing
about 90% of units shifted by the company in the Mexican market. HP's local market share was estimated
at around 32%, more than...