PEST Analysis of Dell Technologies
When Dell Technologies first appeared back in 1984, the immediately exploded, growing more than $73 million in its first year of business.
Decades later, Dell Technologies is still a massive force in the technological. When it first hit the scene, it was known as a PC developer and distributor. But as time passed and the company’s global reach grew, it’s branched off into many domains and acquired significant brands under its name.
It may not be as hip as Apple, but Dell Technologies still commands attention. But the truth is, the bigger the company grows, the more liability and risks they face, especially as a technological corporation.
This PEST analysis of Dell Technologies examines the many regulations they must abide by, as well as economic inflation, customer opinion, and factor in the neverending technological advancements in their industry.
Political Factors: Strategic international relationships
Dell Technologies must be strategic about who and where they conduct their business. They’re at the mercy of many political legislations including political instability, tax laws, trade measures, and foreign currency rates. We’ve also seen simmering temperatures between the United States and China which can negatively affect distribution networks not just in China, but in the countries associated with the Chinese government.
Despite the turbulence in the White House, the United States is still friendly with several countries who import and trade Dell Technologies products. These countries favor open trade regulations and agreements.
The problem is, they may not have the same agreements in place with neighbouring countries. Take India and Pakistan, for example. They’re not on great terms for business because of difficulties involving imports and exports. Countries with poor relationships can directly influence Dell Technologies’ sales in both locations.
Not only does Dell Technologies have to abide by regulations indoctrinated within the United States, but also in every country they trade in. How a country is run directly influences Dell Technologies’ distribution channels. If a country runs as a dictatorship, it’s likely to have flexible and changing business laws. Dell Technologies will need to bend, change, and abide every time a new law is passed. The instability can also worsen their sales, causing unnecessary and unpredictable changes in their company’s profits.
Economic factors: Customers can’t keep up with the increased products
Dell Technologies is affected by three primary economic factors: the fluctuation of foreign currency rates, the cost of raw materials for their products, and macroeconomic stability in each country they conduct business. Increased taxation or currency can radically spike the cost of products for consumers in different countries.
Importing the products becomes a financial nightmare. Sometimes the cost of shipping is dramatically increased, adding additional hundreds of dollars just for a customer to get the product to their home. This transforms their products into a luxury many can’t afford, affecting Dell Technologies’ profits. If they don’t handle these fluctuating costs, they’ll lose customers all over the world to similar products that are much more cost-effective. We lived in a time where competition can appear at any given moment, especially when it comes to technology.
Dell Technologies has also made several acquisitions of companies including Alienware, AppAssure Software, and StatSoft. It’s not just a computer company anymore; it’s a massive technology giant breaking off into the Big Data, gaming, and recovery software industries. Each acquisition leads to more revenue, but, on the other hand, requires more resources to abide by the regulations for safe and legal business practices.
Social factors: A name everyone knew
Once upon a time, only business employees and owners were on the lookout for computers. It was a necessity. For others, it was a luxury. But that was so long ago and now children as young as 5 years old are using laptops daily.
Dell Technologies has created a host of products to engage customers including savvy business owners and school-age children. But they face numerous competition from similar brands like HP, Lenovo, and Asus. And we can’t forget about Apple, who creates sleek, easy-to-use technology built for businesses and the education crowd.
They’ve been jumping on the gaming laptop bandwagon. Online gaming, known as e-sports, has developed into a worldwide phenomenon. Professional e-sports teams can compete to win millions of dollars in yearly or quarterly competitions. Many kids, teenagers, and adults spend their time playing online games, and now Dell Technologies is catering to this crowd. But they’re competing against brands, like MSI, who are well-known in this industry from average and professional gamers alike.
Dell computers was a household name in North America, favored for their dependability as the internet became more mainstream and accessible. But even as one of the largest technological companies in the world, many of the younger crowd don’t go crazy when they hear the brand name.
Technological factors: Constant upgrades everywhere
Dell Technologies is a technology corporation, so unlike other companies, they can face many issues involving technological laws. But they also face competition as technology continuously develops.
For example, I mentioned Dell Technologies’ involvement with online gaming by providing gaming-performance laptops. To keep up with the competition, they acquired Alienware, a nationally recognized gaming computer. But these type of laptops rely heavily on maintaining the latest graphics cards. Without it, customers won’t be able to run high-intensity games. Can Dell Technologies really keep up with the demand?
Technology easily becomes obsolete when a new upgrade hits the scene and computers are rarely ever the exception. In a year’s time, the latest model can become subpar. People are constantly on the lookout for the fastest and highest performing computers. And since they’re comprised of so many working parts, once an upgrade comes out, customers line up to have it.
Because the competition is always growing. They’re either upgrading parts or branching into other markets. Samsung is all over the technological world. They provide laptops, phones, televisions, and tablets. They build brand loyalty in all markets. If people can depend on their Samsung phone, they’re likely to say yes to other products they create, even if they’re from an entirely different industry. Dell Technologies has done the same thing, supplying many products including computers, software, and cameras. They’re currently the number one shipper of monitors in the entire world.
Image “Dell laptop and Nexus phone” by Jim Makos is licensed under CC BY-ND 2.0