paper
Values Mergers and Acquisitions
Though diversification and sharpening business focus has allowed Dell to be one of the largest computer companies in the world, the previous past has been very tough for the company which can be seen in its stagnant revenues, declining margins and subpar performance compared with industry peers such as Apple and Hewlett-Packard Company ( HP). There are multiple reasons for this performance such as Dell operating at the standards based commodity end of the business, with limited presence in the margin rich high end products, and it not being able to scale up to the creativity and innovativeness of companies such as Apple which have completely changed the dynamics of the technology industry.
In addition to this, competitors like Hewlett Packer and Acer have caught up with the Dell advanced supply chain and with the networked environment; the competitive advantage with the direct model has come down. In the past five years have made multiple smaller acquisitions such as Alien ware to boost its capabilities in high margin and high end products, but has not been able to adequately answer the challenges posed by Apple and HP, leading to declining market share. Also, Dell has diversified into consumer electronics and mobile products, but has not been able to capture a strong position there due to intense competitive and more innovative companies. This paper looks at recommending some attractive merger and acquisitions option for Dell that would bring in value added synergies, along with a discussion on the best way it can finance this initiative (“Mergers and Acquisitions: Why They Can Fail,” 2011). Given the above situation, the first choice for a merger with Dell would be a company that would help it to create a competitive advantage in its main business, and help it regain market share with very good profitability. For this, Dell would have to complement its dominant position in the commodity business, along with superior
Though diversification and sharpening business focus has allowed Dell to be one of the largest computer companies in the world, the previous past has been very tough for the company which can be seen in its stagnant revenues, declining margins and subpar performance compared with industry peers such as Apple and Hewlett-Packard Company ( HP). There are multiple reasons for this performance such as Dell operating at the standards based commodity end of the business, with limited presence in the margin rich high end products, and it not being able to scale up to the creativity and innovativeness of companies such as Apple which have completely changed the dynamics of the technology industry.
In addition to this, competitors like Hewlett Packer and Acer have caught up with the Dell advanced supply chain and with the networked environment; the competitive advantage with the direct model has come down. In the past five years have made multiple smaller acquisitions such as Alien ware to boost its capabilities in high margin and high end products, but has not been able to adequately answer the challenges posed by Apple and HP, leading to declining market share. Also, Dell has diversified into consumer electronics and mobile products, but has not been able to capture a strong position there due to intense competitive and more innovative companies. This paper looks at recommending some attractive merger and acquisitions option for Dell that would bring in value added synergies, along with a discussion on the best way it can finance this initiative (“Mergers and Acquisitions: Why They Can Fail,” 2011). Given the above situation, the first choice for a merger with Dell would be a company that would help it to create a competitive advantage in its main business, and help it regain market share with very good profitability. For this, Dell would have to complement its dominant position in the commodity business, along with superior
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