Business Risk Evaluation for Dell Computer Corporation

Essay by hellopiggyCollege, UndergraduateA, February 2009

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Business Risk Evaluation for Dell Computer Corporation

Operational Analysis:

For the fiscal year ending February 2008, Dell's net revenue totaled $61.1 billion, and its net income was $2.9 billion. The company's total assets valued $27.561 billion, with cash and equivalents making up the largest portion, which totaled $7.764 billion. The company's cash flow in operating activities was $3.949 billion, and had approximately 88,200 total employees, including around 82,700 regular employees and 5,500 temporary employees.


Dell offers a broad range of products, including innovative technology and services that consists of desktop PC's servers and networking products, storage, mobility products, software and peripherals and services. Desktop PC"s remains the main source of revenue: 32.0% of net revenue. This is a 1.2% decrease from 2007, preceded by an 8.1% decrease from 2006. As the revenue from desktop PC's was decreasing, sales from mobility products rose. The revenue from mobility products made up 28.5%

of the net revenue. This is a 12.6% increase from 2007, preceded by a 7.7% increase from 2006. �

External Business Forces


Dell's current direct competitors include Hewlett-Packard, Lenovo, IBM, Gateway, Apple, Acer, CDW, EDS, EMC, Software House International, Insight (software spectrum), Softchoice and Digital River. In 2007, Dell lost 1.9 points of share due to the competitive environment. The company lost share in the U.S. and internationally because their growth did not meet overall PC systems growth. This was mostly due to strong competitive pressure in their lower priced desktops and notebooks. There was also a slight reduction in Dell's international desktop shipments, compared to 5% increase in the worldwide desktop industry. At the end of calendar 2007, the company continued to be the top supplier of personal computer systems in the U.S. and the number two supplier worldwide.�


Dell's customers consist of small-to-medium businesses...