Phase1 Report: Strategic Position Analysis
Organisation Profile
Industry Organisation Name Organisation Contact Name Website URL Email Address Address City State / Province Zip / Postal Code Country Organisation Background Dell is a US based computer hardware sales and service company. Founded in the 1980's, in the last three decades the company has grown into the worlds one of the biggest MNC's operating in 190 countries with 9 manufacturing bases sprawled in 6 continents. Dell began its operation in India in the early 90's by opening a contact centre for its international business customer care outsourcing unit. Second phase involved the sales of Dell PC, servers and storage in India exported from their Chinese manufacturing facility. In 2009 they took the big step to open their own manufacturing facility in India to cater the growing demand of Dell products in India. The manufacturing base is the second biggest Dell unit as India is Dells fastest growing market. Dell also opened a R&D centre, employing 600 scientists for new product development. Presently Dell's major business involves large enterprises followed by government, SMB's and consumers. In 2010 third quarter Dell became the no.1 Pc in the Indian market by overtaking HP, which ruled the market for years. The annual sales are $1 billion and are growing at 81%. Dell India is the company second biggest market after US, employing 14000 people. The company predicts the Indian market to be their core area of global operation in the coming years. : Technology Hardware & Equipment : Dell Inc. : Sameer Garde : http://www.dell.com : contactus@dell.com : Divyasree Gardens, 12/12A Chalgatta Village : Bangalore : Karnataka : 560071 : INDIA Organisation Type: Individual : :
1.1. External Analysis
Demographic Factors
Factors Increasing in total population Influence : 3 Reason The UK population could reach 65 million within 10 years and 70 million by 20311. As the population increases Nintendo has the potential to reach a The ageing population has been larger customer base. described as a demographic problem in the UK2 Whereas, the aging population is a British society problem, this could also be a challenge for Nintendo since they need to find measures to include the aging population in the technology revolution
Ageing demographics
Smaller households
In 2007 almost two thirds of households in the UK were one or two person households, having increased from half in 1971.3 The decrease in average household size will impact shoppers' needs. Seeing that Nintendo positioned itself as a family-oriented console this could adversely affect. UK households are facing pay cuts in real terms of more than 3.5% as salary increases fail to keep pace with inflation4 again, fall in income would mean that consumers would spend their income differently.
Decrease in income
1 2
http://www.independent.co.uk/news/uk/home-news/uk-population-will-hit-70m-by-2031-397648.htm http://www.21stcenturychallenges.org/focus/britains-greying-population/ 3 http://www.igd.com/index.asp?id=1&fid=1&sid=17&tid=0&folid=0&cid=100 4 http://www.guardian.co.uk/money/2011/nov/23/uk-household-earnings-fall
Economic Factors Factors
UK GDP growth
Influence 3
Reason
The latest figures suggest the economy grew by a paltry 0.8 per cent for the full 5 year. As a result, Brazil overtakes the UK as sixth-largest economy.
Consumer expenditure on video game consoles
The sales of boxed product in the UK - video game consoles, accessories and software - continued to decline in 2011, falling another 13 per cent to 2.520 billion, compared to 2.875 billion the previous year.
With the growing lifestyle and expenditure has displayed the fact that people are ready to buy People who cannot but the computers at one go, are faced with options to buy the same with instalments, where the Interest rates imposed on them are quiet low India has not faced a lot of currency fluctuations, and this has not affected the industry or the IT sector,
Interest rates
Currency fluctuations and exchange rates
Investment, by the state, private enterprise and foreign companies Business cycles
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0 4 Dell has a constant and accurate business cycle, which for the Indian industry seems effective and result oriented Even during the economic downturn, Dell did not have any major shuffling of resources, which did not impact the employment much, though there were there were a few clearouts which were carried out
Unemployment
Energy costs, transport costs, communications costs Others Conclusion
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Just like the Indian government, the Economy too has shown a fair amount of stability. In 2008 when the world started to face the worst ever financial meltdown, Indian Economy stood out and Information technology sector were one of the biggest contributors to the Indian economy. Dell though undertook some staff clearances; they yet maintained a very strong presence in the minds of the Indian customers and the market
http://www.thisismoney.co.uk/money/news/article-2105851/GDP-fall-confirmed-data-reveals-UK-economy-grew-thought-2011.html
1.1.1.3 Factors
Socio-Cultural Factors Rank : 4 Reason
Working practices have been changing; with a decrease in average working hours and the extension of flexible 6 working Taking leisure time has become vital, if leisure time is one of consumers greatest concern, they might gravitate towards the Nintendo video game console. Technology has become an essence of the (UK) daily live. People can easily adapt to the newest technology and depend on technology. The human dependence on technology has grown tremendously with consumerism. Playing with video game consoles inherently embedded in the social interactions that happen in its environment.
Attitudes to work and leisure
Change in lifestyle and consumerism
Social interactions (with video game consoles)
4 4
Demographic changes
Distribution of income
Computers are given huge importance in Education and Education and health health sector, which have been tapped by Dell With the people in India migrating and shifting to newer places, there have been huge demographic changes : The working class of India has become more widespread because of which the socio economic classification has also become wider and bigger
Social mobility Others Conclusion
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Over the last decade the Indian consumerism has been on the rise, this has been evident with the fact, that the average consumer in India knows everything about the product they want to buy, this makes it tricky for company. Coupled with the knowledge that today the buying capacity of an average consumer has also increased, it is even more challenging for a company to keep themselves at the top of the market.
http://oxygen.mintel.com/sinatra/oxygen/display/id=280427
1.1.1.4 Technological Factors Factors New products : : : 5 Rank Reason
The current generation of the video game consoles has reached maturity and slowly transitions into the eight generation of video game consoles. As Nintendo lacks in technological advances, it needs to find different ways to differentiate on.
Speed of change and adoption of new technology
Technology develops so quickly that products give the appearance of being obsolete very quickly. For instance, in three years HD will be mandatory, so as technology evolves certain product features or specifications will be seen as standard.
The impact of emerging substitutes
Others
Moreover, as technology evolves a new sector forms a threat to the video game console industry. The console market, the handheld market, and the smartphone/tablet market are already competing for peoples timeand the competition is only going to get more intense.
1.1.1.4 Environmental Factors Factors Sustainability Influence : : : 3 Reason
UK businesses have become more socially conscious and environmentally responsible. U.K. companies rapidly increased the sustainability of their business practices over the last 12 7 months of data collection. It seems that the video game console industry still lags behind on this matter. The environmental sustainability of the game industry is one that has been ignored. The power required to run the next-gen consoles is shocking and the waste produced from the games themselves can be found repulsive.[INSERT SOURCE]
Nevertheless, the UK government pledges to cut carbon emissions by 80% by 2050.8
7 8
http://www.environmentalleader.com/2011/09/19/u-k-business-increases-sustainability/?graph=full&id=1 http://www.guardian.co.uk/politics/2008/oct/16/greenpolitics-edmiliband
1.1.1.4 Legislative (Political) Factors Factors UK Government low carbon transition plan Influence : : : 3 Reason
The UK government pledges to cut carbon emissions by 80% by 2050.9 One could say that this could interfer how Nintendo will develop its products, Seeing that the video game industry lags behind environmental sustainability (see previous heading). However by 2050, technology will change so much that producing products will be more environmentally friendly
EU-wide anti-piracy legislation
4 Anti-Counterfeiting Trade Agreement (Acta) seeks to establish international protection of intellectual property. Video Game Piracy in UK Costs 1 billion per year [SOURCE]and the illegal downloading of video games has gone up by 20 percent in the last five years. [SOURCE]. This legislation protects the video game industry and thus also Nintendo.
The new anti-piracy legislation ;
http://www.guardian.co.uk/politics/2008/oct/16/greenpolitics-edmiliband
