Filed under: International markets, Deals, Live coverage, Competitive strategy, Dell (DELL), Hewlett-Packard (HPQ), Russia, Middle East

Usually, when sovereign funds put money into a company it is simply a financial investment. Dell (NASDAQ: DELL) might have unlocked something more. According to The Wall Street Journal: “Dell said it is in talks with a government-owned entity in Dubai about establishing a joint venture to further increase the personal-computer maker’s sales in the Middle East.” In other words, the computer company will get value well beyond cash.

For Dell, it is a brilliant move that shows government funds can do more than just write checks. The Personal computer market in the Middle East is huge and growing very rapidly.

The US company might have found a template for improving its market share around the world through forming joint ventures with local pools of capital. Dell’s growth in many markets has been injured by the improvement of share by Hewlett-Packard (NYSE: HPQ), and the rise of large computer companies Lenovo and Acer out of China. All of these companies need to improve their business in growing markets, like the Middle East and Asia, if they want their earnings to move up.

If the Dell venture in Dubai works, it would be wise to look to sovereign funds in Russia, China, and Singapore for similar deals. Dell’s market share in many of these regions is in trouble. Who superior than the locals to help them?

Douglas A. McIntyre is an editor at 24wallst.com.

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This entry was posted on Wednesday, April 9th, 2008 at 6:23 pm and is filed under Companies Competitive Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.