Apple and Dell used to compete directly against one another in the personal computer business. Apple has since moved on to become a consumer electronics powerhouse, earning most of its billions from the sale of smartphones and tablets, while Dell's business has all but stagnated, the company not even being a player in those two high-growth segments. Analysis of the financial statements of these two companies can shed light on how this bears out on the financial statements. Apple has seen a sharp increase in its operating cash flows over the past three years. In FY2009, the company earned $10.1 billion in cash flows from operations, then $18.6 billion in FY2010. FY2011, however, represented a significant increase over that amount, to $37.2 billion. This represents an increase of 100%. The company's total cash holdings on the balance sheet, however, decreased by 12.8% to $9.8 billion. The major change was in the investing activities. Basically, Apple has determined that its current level of cash is sufficient, and has taken to investing it. The company invested $102 billion in the purchase of marketable securities in FY2011, compared with $57.7 billion in FY2010. Some of these were money market, since $49.4 billion in cash came as proceeds from marketable securities. The company increased its payments for plant, property and equipment and for the acquisition of intangible assets, but these amounts pale in comparison with the cash flow that Apple generates and subsequently invests in marketable securities. Cash flow from financing activities did...
The company saw a decrease of 6.8% in cash generated from operating activities. The company did, however, increase its cash outflows on investing activities. Dell accelerated purchases of marketable securities, tripling the level of the previous quarter. Dell also had a high level of capital expenditures and spent some money on the acquisition of new businesses. In total, Dell increased its cash outflows for investing activities by 565%. The company has accelerated stock repurchases in the past two quarters, most likely to prop up the value of the company's stock. However, Dell continues to finance its investing activities in part from the issuance of debt.
The company can no longer look to its production model as a source of sustainable competitive advantage. Although it can still provide competitive advantage, evidence over the past few years indicates that any such advantages will be temporary. Production cost control is only a core competency, therefore, not a source of sustainable competitive advantage. The company's brand is a source of sustainable competitive advantage as the Dell name has
Dell Case Study and Business Strategy Comment by Sabina: Dell is one of the leading industries for computer production and sales globally. The brand is highly recognizable and the company is mainly known for its personalization of computers for customers. In 2004-2005 Dell became one the leaders in the industry for PC sales, by overtaking Hewitt Packard. However since 2007 sales have dropped and Dell is struggling to keep its market share.
In particular, Wyse gave Dell a better foothold in the sprawling segment of cloud computing. This area has helped companies save money through the delivery of affordable services and software over internet-based infrastructures (Ignatiuk, 2008). Dell will also benefit from the prior experience of Silver Lake expertise that has revived several tech companies such as Skype. This wrenching would typically change Silver Lake to be tricky for a public corporation
Apple remains committed to its differentiated positioning, and that will inherently limit their share of the market. Tablets are Apple's second-largest market. The iPad was launched in fiscal 2010 and in fiscal 2011 it enjoyed 311% growth. It has now begun to emerge as a substitute for personal computers, even in the corporate market (Etherington, 2012). This has helped to drive growth. The iPad has always been a differentiated product
The first of these was co-designed with Sony, and established the modern layout for laptop computers that has remained popular ever since. In 1994, Apple revamped its Macintosh line with the introduction of the Power Macintosh, which was based on the PowerPC line of processors developed by IBM, Motorola and Apple. Apple's operating system software was adjusted so that most software written for the older processors could run in emulation
Apple also understands the importance of a prominently displayed logo, specifically on its laptops. On many models, the logo lights up, while it is also displayed right side up when the screen is open. This shows an understanding that the logo is an important advertising tool, rather than simply a design element that needs almost no attention. In this way, Apple understands the power of this type of advertising to
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