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Dell strategy history
Describe dell computer success business strategy
Dell's distribution channel
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The computer industry has benefited from the explosion of home computer usage and has become one of the most competitive industries in the world. With technology growing at amazing paces, many of the computer companies have fallen behind and even out of the industry since the development of the computer. Only the strongest companies have been able to be profitable and efficient. Dell Inc. is one of the few corporations to be able to remain at the top of the market.
Dell began as the vision of Michael Dell. The company began in 1984 with a simple business concept to build computers to order and to sell directly to customers. Dell has a history of achieving double-digit increases in annual sales. To maintain this growth, Dell is faced with many challenges in maintaining it’s distinctive capabilities and using objective analysis to ascertain it’s strength’s, weaknesses, opportunities, and threats.
“Dell's vision is to work closely with our development partners to provide 100% perceived availability to the application environment.” "Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.” In doing so, Dell will meet customer expectations of: highest quality, leading technology, competitive pricing, financial stability, and individual and company accountability. From the nine essential components of a mission statement, Dell’s mission statement includes: products or services, markets, technology, and concern for survival, growth, and profitability. The most important value to Dell is to satisfy their customers and the second most important value is to be profitable.
Dell has three distinctive capabilities which consist of: 1) selling products directly to consumer’s which eliminates the markups of resellers 2) build products as they are order, which eliminates overstocked products and 3) having the ability to respond quickly to customers who experience problems with their products.
Why has Dell been so successful despite the low average profitability in the PC industry?
1. How and why did the personal computer industry come to have such low average profitability?
Dell Inc. weakness was cell manufacturing because their assembled computers were being shipped five to six days after the order was placed. It is an inconvenience for the customers to always send their computer away to have it repaired. First, they are left without internet access. Second, the time it reaches Austin, Texas, have it repaired, and shipped back can take days. The company opportunities were the Dell U.K. that open business in 1987 and in that country it was a lot of companies selling cheap computers. Dell Inc. strides on loyalty among customers and employees, and that could only be derived from having the highest level of service and performing products. Segmentation within the company enables them to measure the efficiency of the business in terms of assets use. Dell Inc. evaluates their return on invested capital in each segment, compare it with other segments, and target what the performance of each should be.
Based on the external environment and the historical perspective of Dell, Michael Dell needs to realize that his nearly 20 year-old business model needs a dramatic change. He needs to get the product in customers hands (before point-of-sale), focus on quality customer support/service, and use customer indicators as a sign of what areas need improvement/enhancement within the company. Additionally, limited options based on narrow-minded perceptions (only using Intel chips) not only cost Dell market share, it also cost them on the bottom line (Operations). Not listening to the needs and wants of loyal consumers can result in a loss of market share, which is what Dell has experienced.
Dell Inc. is a privately owned multinational technological company, which develops, sells repairs and supports computers and relates products and services. Dell Computer has a fully Internet-enabled supply chains, which is constructed by the extranet to automate interactions with suppliers, service partners and customers .
SWOT analysis of Dell Computers History: The company was founded in 1984 by Michael Dell, now the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling personal computer systems directly to customers, Dell could best understand their needs, and provide the most effective computing solutions to meet those needs. Today, Dell is enhancing and broadening the fundamental competitive advantages of the direct model by increasingly applying the efficiencies of the Internet to its entire business. Company revenue for the last four quarters totaled $19.9 billion. Through the direct business model, Dell offers in-person relationships with corporate and institutional customers; telephone and Internet purchasing (the latter now exceeding $18 million per day); customized computer systems; phone and online technical support; and next-day, on-site product service. Dell arranges for system installation and management, guides customers through technology transitions, and provides an extensive range of other services. The company designs and customizes products and services to the requirements of the organizations and individuals purchasing them, and sells an extensive selection of peripheral hardware and computing software. Nearly two-thirds of Dell's sales are to large corporations, government agencies and educational institutions. Dell also serves medium and small businesses and home-PC users. Dell's Unique Direct Model: Dell's award-winning customer service, industry-leading growth and consistently strong financial performance differentiate the company from competitors for the following reasons: Price for Performance -- With the industry's most efficient procurement, manufacturing and distribution process, Dell offers its customers powerful, richly configured systems at competitive prices.
Dell Computers Strategy Global companies play an important role in the business environment, because they connect their businesses together around the world. A good example of a global company is Dell Inc., an American computer-hardware company, headquartered in Austin Texas, which develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. They design, build and customize products and services to satisfy a range of customer requirements: from the server, storage and Premier Services needs of the largest global corporations, to those of consumers at home. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue.
The first area of evaluation was the comparison of the target markets for both Dell and Compaq. In evaluating the Dell homepage, the target audience was determined to be businesses and government institutions. The Dell homepage contains five links to other areas of the website, one each for small businesses, large businesses/healthcare, education, government, and home/home office. In splitting the business into four categories, the emphasis Dell places on business customers is evident and identifies its target audience as predominately business and government customers. However, Dell is obviously vying for individual computer sales to homes and consumers. In addition, in examining the Dell homepage, the target audience can also be identified as customers who are users of the Internet, as Dell does not sell computers in stores. Dell is a direct retailer of computers and uses the Internet as its primary source for customers to place orders, although Dell does allow for phone sales as well.
Apple Incorporation is one of the largest organizations dealing into Information Technology. Apple has a host of products ranging from Laptops, Desktops, Mobile Phones and Multimedia Devices. The company has been extremely innovative in the field of multimedia and it owes it success to one of the greatest innovators, Steve Jobs. The company has always believed in innovation and that is the major reason why it has been so successful in the mobile phone segment. In recent years Apple is second only to Samsung in the Global Mobile Phone industry. However the operations have been largely based in the United States and in times of recession any organization needs to focus on economies of scale and thus focus on growth opportunities like Diversification and Market Development. This report will illustrate new market entry strategies for Apple for entering Australia.
The intention of The Soul of Dell was to provide employees with a road map from which to operate from. Acting as a guide, the philosophy statement assists employees in understanding how their behavior contributes to the success of the company. Furthermore, a sound statement serves as the backbone for the overall operation of and organization and provides employees and management alike with the direction needed to fulfill company goals. While this was the purpose of The Soul of Dell, upper management discovered the statement failed to reach and resonate with employees. Unknowingly, it was those who created The Soul of Dell that inadvertently contributed to the disconnect when they failed to consider views and opinions of the components connected to the company. To compensate, upper management should look to individuals throughout the organization who can serve as a resource to identify existing strengt...
The PC industry is highly competitive and constantly changing as technology evolves and customer needs change. Some of the top competitors in the PC industry are IBM, Hewlett-Packard, Dell and Apple. Theses rivals are constantly jockeying for the top competitor’s position. They compete in prices, product innovation, advertising, etc.
Dell’s initial competitive strategy, when it was founded in 1984 by Michael Dell, was to focus mainly on differentiation. Its strategy was to sell customised personal computer systems directly to customers, which was a rapidly emerging market at that time (1). This was done by targeting second-time customers, those that already understand computers and know what they wanted. Meanwhile other companies at the time was selling “’plain brown wrapper’ computers” (2). By offering customisations, Dell gained a better understanding of customers’ needs and wants. This helped the organisation position itself differently against the more popular brands, such as Compaq and IBM.
Dell Inc had very effectively used the direct marketing channel for the sales of computers to the end consumer. When all the other pc makers were selling through retailers and distributors, Dell had started efficient use of the direct channels.
“The Dell Theory of Conflict Prevention,” is a theory that is approved by multiple famous authors. The theories main points are valuable and the theory should be looked upon more seriously. In Thomas Friedman’s essay, “The Dell Theory of Conflict Prevention,” he gives examples of how global supply chains would be constructive to promoting world peace. Friedman feels that if everyone is an ally to each other in some shape or form, then no one will want to engage in war. Madeline Albright would agree with Friedman’s theory according to her writings in “Faith and Diplomacy.” Albright felt that religion should play a factor in the diplomatic system of America, in order for us to maintain some kind of peace with other nations. Friedman and Albright both were looking for a solution to world peace. Albright would agree with this theory from the religious perspective. Appiah argued that an ideal global citizen would be essential to America, in his essays “Making conversation” and “The Primacy of Practice.” Appiah felt that people must have an understanding of each other in order to get along with each other. Both Appiah and Albright would agree with “The Dell Theory of Conflict Prevention.” “The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain”(Friedman 125).