2
Table of contents
Abstract…………………………………………………………………………………………….….….……..3
Current Situation Analysis………………………………………………………………………………….4
Company Research………………………………………………………………………………………..….5
Dell Computer Company ……………………………………………………………………….……...5
1.Background Information……………………………………………………………………….….5
2.Mission Statement…………………………………………………………………………………...5
3.Special Services………………………………………………………………………….….….……5
4.Annual Report Analysis……………………………………………………………….….…….…6
Apple Computer Company………………………………………………………………….….….…..7
1.Background Information……………………………………………………………………….….7
2.Mission Statement…………………………………………………………………………………...7
3.Special Services………………………………………………………………………….….….……7
4.Annual Report Analysis……………………………………………………………….….…….…8
Lenovo Computer Company……………………………………………………………………………9
1.Background Information………………………………………………………………….….….10
2.Mission Statement………………………………………………………………………………….10
3.Special Services…………………………………………………………………….….….….……10
4.Annual Report Analysis…………………………………………………………….…….….….11
Comparison Analysis……………………………………………………………………………………….12
Annual Report Comparison…………………………………………………………….….….……..12
Services Comparison…………………………………………………………………..….…….….….13
SWOT Analysis………………………………………………………………………..…….….…….…14
Results of the Questionnaire……………………………………………………………………………..18
Conclusion and recommendation…………………………………………………………….….….…18
References………………………………………………………………………………………….…….…...19
Appendix……………………………………………………………………………………………….….…..21
3
Abstract
To give some advice on starting a new laptop computer company in the United States,
we choose three different kinds of computer companies to analyze the computer
industry in the United States. These three computer companies are Dell Computer
Company, Apple Computer Company and Lenovo Computer Company. According to
the study of current situation, the report will analyze each one of three computer
companies in four aspects, which are background information, mission statement,
special services and annual report. Then, the report will compare three companies’
strengths, weaknesses, opportunities and threats based on the results of questionnaire
and our research. At last, we will give our recommendations on starting a new laptop
computer company in the United States.
Current Situation Analysis
4
According to Timothy F. Bresnahan and Shane Greensterin, the computer
industry has changed dramatically since 1990s. In the earliest period of the Computer
Age, IBM was the leading firm. However, after several years of stability, the
competition in the computer industry became increasingly intense due to the
technology development. The product is only in the form of computer, but also
personal computer, laptop and tablet. Therefore, the competition comes from both the
internal environment and the external one.
As noted by Bresenahan and Greenstein the computer industry also experience
the rapid technological advances, such as software functionality, hardware
performance and screen display. Due to people’s strong reliance on the Internet, there
are two trending for the design of the computer: one is becoming smaller, simpler and
easy to go, such as Apple’s products. The other is becoming more focus on the
functional performance such as IBM’s products. Additionally, several computer
company competitors like to launch the similar product.
As mentioned before, the market for computer industry is highly competitive. The
first factor comes with aggressive pricing practices. Since the price of the fabrication
parts becomes cheaper and the product life cycle turns to be shorter, the manufacturers
have to sacrifice the gross margins to maintain their market share. For example, over
the past several years, the windows-based computer manufacturers have cut their
prices in response to the weak demand for the computer products. Besides that, there
is no sign showing that downward pressures on gross margin would stop.
The second factor comes from the variety of the computer products. Since the
laptop market is already highly competitive, however, new computer products are still
continuously coming into the markets. For instance, IPad has becoming the biggest
threat to laptop because of its similar function with a lower price. Further, a new
product called Surface. It is like a smaller version of laptop with the same function as
laptop. In 2013, Personal Computer Industry sees the worst sales in nearly 20 years.
According to the 2013 annual report the popularity of tablets and the unpopularity of
5
windows 8 is the main reason. Additionally, tablet is not the only threat. Smartphone
is also one of the threats.
Company Research
Dell Computer Company
1. Background information
According to the Dell Annual Report in 2013, Dell Computer Company was
established by Michael Dell in the state of Delaware in 1984 (“About Dell”, 2013).
Dell is one of the largest computer technological corporations in the world, and
provides its customers a series of products and services including personal computers,
servers, data storage devices, software, networking products and support services
(“2012/13 Annual Report Dell Inc.,” 2013). Presently, Dell Computer Company is
listed at number 41 in the Fortune 500 list released by Fortune Magazine in 2013, and
its computer business operates in America, Europe, Asia, the Middle East and most of
regions around the world. The main business of Dell Computer Corporation is selling
the products of laptops and desktops, and its headquarters is located in Round Rock,
Texas and employed 111,300 employees at the end of Fiscal 2013 including 108,800
regular employees (“About Dell”, 2013).
2. Mission Statement
The mission statement of Dell Computer Company is to deliver technology
solutions that help countries, communities, customers, and people everywhere realize
their dreams and achieve more, whether they are at home, work, school or anywhere
in the world (“About Dell”, 2013).
3. Special Services
The special services of Dell Computer Company include a number of particular
information technology (IT) and business services. Those special services are based
on the demand of customers, which can be divided into three kinds of services:
6
support and deployment services; infrastructure, cloud and security services; and
application and business process services (“2012/13 Annual Report Dell Inc.,” 2013).
4. Annual Report Analysis
Dell Computer Company is one of the largest personal computer manufacturers
with 23.0% of the domestic market share in the U.S. Revenue from the U.S. in Fiscal
Year 2013 decreased 7% to $28.2 billion from the prior fiscal year; Operating cash
flow fell to $3.3 billion, a decrease from $5.5 billion in 2012; Net income drop to 2.3
billion, a 32.07% decrease from 2012. The drop in revenue from the U.S., operating
cash flow and net income is due to the competitive pricing dynamics in the market
(“2012/13 Annual Report Dell Inc.,” 2013).
Table 1. Past Total Revenue and Net Income 2008-2013 of Dell (In Millions)
Year 2013 2012 2011 2010 2009 2008
Total Revenue $56,940 $62,071 $61,494 $52,902 $61,101 $61,133
Change from last year -8.27% 0.94% 16.24% -13.42% -0.05%
Net Income S2372 $3492 $2635 $1,433 $2,478 $2,947
Change from last year -32.07% 32.52% 83.88% -42.17% -15.91%
Note. The data of total revenue and net income are sourced from Dell, Inc.’s annual
report of the year 2012/13, 2010/11 and 2008/09, retrieved from http://www.dell.com.
As shown in Table 1, the figures of net revenue maintained a stable level at 61~62
billion from 2011-2012, but plunged 8.27% in 2013. The net income was deteriorating
dramatically in 2013. The financial crisis broke out in 2008, the macroeconomic
condition was tough, because high unemployment rate and low consumer spending in
the U.S. However, the company still made positive net income between 2011 and
2012. When the overall economy was recovering slowly in 2012, the company
incurred huge losses instead of profit. The lower growth in net revenue and net
7
income is partly due to the declines in revenue from client products (“2012/13 Annual
Report Dell Inc.,” 2013).
Apple Computer Company
1. Background information
As noted in Apple Annual Report in 2013 Apple was founded in California in
1977. Apple has been committed itself to developing innovative products, which
include iPhone, iPad, Mac, Apple TV, etc. Furthermore, it also provides the sales of
digital content and applications via iTunes Store. The company values significantly
users’ experience from inner software or hardware products to the after–sales Service.
Now, Apple is No. 6 Company in the Fortune 500 list issued by Fortune Magazine in
2013, and its business has been worldwide operating. It has overall 80,300 full-time
employees and additional 4,100 temporary employees and contractors.
2. Mission Statement
The mission statement of Apple in 2013 is to develop and design its unique
operating system, hardware, software, and service to bring the ultra experience to its
customers. Therefore, it contributes to work on new products with superior ease-of-
use and unique design. According to 1980’s apple company statement, which is a
famous quote delivered by Steve Jobs, “Man is the Creator of change in this world. As
such he should be above systems and structures, and not subordinate to them.” Even
though, this mission statement is more like a conceptual working guidance, rather
than several specific objectives.
3. Special Services
Unlike the other companies, Apple offers special services which include a largest
third-party software database called iTunes and iCloud. Even though these services
are virtually provided by Apple and lack of physical presence, it truly changed
customers’ life style and also lead a new way of selling their products.
(1) iTunes and the iTunes Store – it is an application which can keep track of
users’ music, movies, and TV shows in one place. As for iTunes Store is a
8
virtual store where you can find a number of applications with or without
payment. The storage of iTunes Store is enormous which no other system can
be compared with. In September 2013, the company introduced a new add-in
application – iTunes Radio. It is a free online streaming music service that
provides music to the customers.
(2) iCloud – it is a cloud service created by Apple storing music, photos,
applications, contracts, calendars documents and other daily life
miscellaneous. This service has provided so many conveniences to the
customers. Especially when their laptop gets lost, they still can get access to
their valued documents, photos and videos.
4. Annual Report Analysis
Apple has denominated the market for not a very long time compared with other
computer companies in the same industry, but it has actually brought an innovation to
