Dell has a history of achieving double-digit increases in annual sales. To maintain this growth, Dell is faced with many challenges due to the constant changes in the general environment, in the industry, in maintaining it's competitive advantage, and lastly using objective analysis to ascertain it's strength's, weaknesses, opportunities, and threats.

The computer industry has benefited from the explosion of home computer usage. According to the US Census Bureau, computer usage has increased from 8.2% in 1984 to a current level of 51% as of August 2000 (appendix A and B). Internet usage is at an all time high of 41% (appendix A). In the business sector, small and large businesses are constantly upgrading their systems in response to an increasingly suave customer.

Rapid technology and the computer industry complement each other. As the demand for faster, efficient, and lower cost computers in the home market increase, this partnership will steadily increase. This phenomenon is echoed in t

One of Dells threats is that it has no plans to expand its reseller network, so this is still an open area for competitors. There is also the extreme competition that is only getting tougher; PC makers are changing their strategies in order to compete more effectively with Dell (Thompson Arthur A., Gamble John E C-163). Another possible threat is this year's emergence of a mega-merger between Hewlett-Packard Co. and Compaq Computer Corp-two of Dells largest rivals (Tyler and Loek P-1).

One of Dell's weaknesses is that it has low profit margins; therefore it needs to sell in large quantities to earn a reasonable profit from PC sales. Based on customer e-comments with complaints Dell's customer service has fallen short in some areas of the United States and especially in foreign countries where a language barrier exists (Fishman P-2). Another weakness is that no returns are allowed on orders from resellers, which is a deterrent for retailers and customers.

Dell continues to enhance the core competitive advantages of the direct model by applying the efficiencies of the Internet to its entire business. Dell led commercial migration to the Internet, introducing www.dell.com in 1994 and adding e-commerce capability in 1996. In 1997, Dell became the first company to achieve $1 million in online sales. Today, Dell operates one of the highest volume Internet commerce sites in the world (Company Facts).

The picture is not quite as rosy in the international marketplace. The European market is also maturing, so new strategies are necessary. In building foreign markets, cultural differences must be addressed. In the opportunities section, several recommendations were made to increase market share. This new frontier will be the ultimate key to Dell's success.

Prior to 9/11, the healthy economy provided an outlook of unbounded growth potential, however since that time the US economy has mirrored the uncertainty of the nation. In addition, the US and European computer industry has entered into a maturity stage and Dell has responded by offering lower priced computers and increasing its advertising budget (Thompson and Gamble C-159).

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Approximate Word count = 1986
Approximate Pages = 8 (250 words per page double spaced)