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Dell: Improved focus on large and SME customer portfolio in Europe

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Second largest personal computer provider in United Kingdom:
Dell, the second biggest personal computer manufacturer and distributor in United Kingdom controlling market share of 19.4% in 2010, provides IT hardware, software and services to large enterprises, SMEs, B2C and public sector customer base across 195 countries worldwide. Europe is the second biggest market space for Dell accounting for 22.3% (2007: 20.6%) of group revenues in 2009. Large enterprises account for the core consumer portfolio constituting 29% (2010: 27%) of total revenue mix (2011). Dell, incorporated in 1984, is publicly traded on NASDAQ stock exchange with market capitalization of US$27.11 billion (September 2011).

Largest personal computer market space in Europe:
United Kingdom personal computer segment value sales reached US$8.2 billion, with year-on-year decline of 4.2% in 2009-2010. The market is stipulated to witness decline of 0.3% annually in the next 3-5 years (2014). UK personal computer volume sales will reach 18.7 million, with CAGR of 8.1% (2009-2014). United Kingdom is biggest personal computer market space accounting for 18.3% of European value sales in 2010; Acer is the leading personal computer manufacturer in United Kingdom with market share of 19.4% (2009-2010). Domestic market is slightly fragmented with four manufacturers controlling market share of 66%. HP is the closest competitor to Dell controlling market share of 19.1%.

Switching of production facilities to low cost European destination:
Globally, Dell aggressively acquired assets (Kace Networks, Ocarina Networks, Scalent Systems, Boomi and InSite One) across higher margin enterprise business segment such as servers, software, storage and services (2011). In Europe, the company is shifting production facilities to low cost destinations such as Poland to improve cost synergies worth US$4 billion by 2011.

Dell has enhanced inorganic expansion to improve long-term profitability of enterprise and public sector business segments worldwide. On the other hand, the company signed strategic alliance ventures with ikaSystems to enhance cloud based IT service portfolio along with launch of new product development services (Archiving-as-a-Service, Analytic and Reporting-as-a-Service, Platform-as-a-Service and EMR-as-a-Service).

Can Dell surpass Acer as the biggest personal computer manufacturer in United Kingdom?
In 2011, Dell generated net revenue of US$61.4 billion, with year-on-year growth of 16%. European public segment revenue decline slightly attributed to budgetary constraints. The group has witnessed improved in research & development expenditure worldwide with total patent portfolio at 2,991 in 2011. Can focus on cloud based healthcare IT service portfolio for large enterprise and public sector consumer base improve its long-term sustainability?

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