Part I: Introduction/Background Summary
In 1984, Michael Dell invested $1,000 in start-up capital to register his business as Dell Computer Corporation, which was known as PC's Limited. The company becomes the first in the industry to sell directly to end-users by passing the dominant system of using computers resellers to sell mass-produced computers. Dell Computer also pioneers the industry first thirty-day money back guarantee. It became the cornerstone of Dell's commitment to expand its service offerings, superior customer satisfaction, and the industries first on site service program. It also established its first international subsidiary in the United Kingdom, and raised $30 million in its initial public offering.
Part II: Problem Identification
The problem with Dell Inc. was the rapid growth within the company in their beginning stages.
Part III: Researching Internal and External Factors
Dell's strengths were oriented around listening to the customers, responding to the customers, and delivering what the customer wanted. The direct relationship was first through telephone calls, then through face-to-face interactions, and now through the internet. It has enabled them to benefit from real-time input from real customers regarding products and future products they would like to see developed. The company also doesn't use reseller or retail channels because every computer is built-to-order, which allows less inventory. The direct model allows them to take the pulse of whatever market and provide the right technology for the right customers.
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.
It became a great way to identify what needed to happen for them to reach their full potential in each business.
1. How and why did the personal computer industry come to have such low average profitability?
Apple Inc. headquartered in Cupertino, California was founded in 1976 by three men named Steve Jobs, Steve Wozniak, and Ronald Wayne. Apple Inc. has a strong presence worldwide; the company currently has 478 Apple retail stores in 17 different countries. The company focuses primarily on designing, developing, and selling electronics, computer software, and online services. Some of the hardware products are; iPhone, Mac laptop, the Apple watch, and the iPad tablet. Apple Inc. has become one of the most important American companies due to its innovative skills. According to a Forbes article, “The Boston Consulting Group ranks Apple as the world’s most innovative company. Apple has topped BCG’s list of 50 companies every year since 2005.”(Adams,
Custom Chip, Inc case describes the situation of a company where lack of coordination and cooperation among different departments is hindering them to achieve their common or ultimate goal as a single business entity. Applications engineering, product engineering and manufacturing are all inclined towards achieving their individual objectives and timelines rather than collaborating and synergizing their efforts in order to attain a common goal of effective production with improved cost reduction. Few of the primary reasons are insufficient and unorganized company policies for coordination and cooperation, poor networking with in the organization especially on management level, lack of communication and influence among managers and VPs, insufficient human resource, and measuring a department's effectiveness solely on its performance based on individual objectives, rather than checking its effects on over all company's performance.
Apple Inc.’s Financial Analysis case study will cover the nine-step assessment process to evaluate the company’s future financial health. The nine-step evaluation process will entail the following: 1) Fundamental analysis covers objectives, plan of action, market, competing technology, and governing and operational traits, 2) Fundamental analysis-revenue direction, 3) Investments to support the firm’s entities action plan, 4) Forthcoming profit and competitive accomplishment, 5) Forthcoming external financial requirements, 6) Accessibility to direct at sources of external finance, 7) Sustainability of the 3-5 year plan, 8) Strain examination beneath scenarios of calamity, and 9) Present financial plan (State University, 2013). The fundamental analysis will be explained primarily in the next section.
Why has Dell been so successful despite the low average profitability in the PC industry?
A business is feasible when it is able to generate profits, standstill despite of risks and achieve the founders’ goals (Hofstrand, 2009). In order to meet all of these achievements, the researcher need to investigate investment, technical market and commercial feasibility (How to conduct a feasibility study, 2015). In terms of Business model Canvas, the ‘customer segments’ component presents the market feasibility. Dell has targeted four main segments which allow the company to design, produce, promote and deliver different products with different features. In comparisons, the ‘value propositions’ contribute to the technical feasibility when the product is formed and advertised, ready to deliver. Dell has used different strategies to maintain and developed the brand including remain the same brand name for different products. This strategy is promised to stimulate customers’ awareness of the company, thus, attract numerous number of clients and increase annual profits. Finally, ‘channels’ characteristic focuses on accessing technical feasibility. Dell disposes different channels in order to reduce the transportation and warehouse costs as well as guarantee customers with aggressive on-time delivery. Consequently, as the cost has been lowered and the reputation has been improved, Dell is expected to maximize their revenues
Speaking about the business model of Dell, it has ability to remain on the higher end of the scale for a particular time period. Dell has business model, which primarily focuses on direct selling line of attack. It in a straight line supplies the PCs to the regulars. It does not believe in intermediary, retailers for the business practices. Undeniably, this gives them an edge to serve customer well. Nevertheless, it understood the importance of retailers and start offering products on the premises of retailers, such as Wal-Mart, Sam’s Club and so on. Next, Dell administration is certain of the exclusive business of PCs. As time goes on, however, observing the
Dell Inc. has realized that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost. With the power of their direct model and their team of talented people, they are able to provide to their customers high-quality, relevant technology, customized systems, superior service and support and products and services that are easy to buy and use.
Dell attempts to sale products by convincing consumers they are a reliable, forward thinking, PC manufacturer, while, Home Depot aims to influence sales by being the do it yourself one stop shop. Delving deeper into the integrated marketing communications of advertising, personal selling, publicity and sales promotions, there are a lot of similarities. Firstly, both companies ad campaigns take place via the same mediums of television, internet, radio and print publications. Secondly, their personal selling mechanism both leverage the internet, phone and physical locations, though, Dell does not sale directly to their consumers by way of a brick and mortar store. Dell uses third part vendors such as Micro Center and Best Buy to handle face to face sales.
Dell made the bold decision in 1994 to eliminate their products from retail stores and focused on mail order customers. In 1996 Dell began selling through their website as well. By eliminating the retail store presence Dell was able to reduce costs, reduce inventory, and maximize profit. Dell utilized a built to order system that allowed customers to specify exactly what they did and did not want on their Dell computer. Dell's just in time inventory system lowered inventory to 6 days and storage costs were saved.
This strategy was carried out by selling via phone, fax and direct sales, instead of selling through retail stores. Not only this approach differentiated Dell from other competitors at the time, it also reduced its operating costs as it did not have to rent expensive retail space. In addition, Dell’s strategy of selling customised computers allowed it to hold only a small amount of inventory, which reduce...
Historically, personal computer companies produced most of the components for a computer which they assembled into their final products and distributed to resellers. The manufacturing of these components was vertically integrated into the organisation. Dell, as a small start-up, could not build this infrastructure. Instead, they developed a model where they developed relationships with organisations that could provide these components, allowing Dell to focus on selling and delivering computers. By selling directly to customers, initially through mail orders and later by using the internet, Dell avoided reseller mark-up. Dell also enabled customers to order customised computers, which Dell then assembled after receiving the order (Magretta, 1998, p.73-74). “Customers got exactly the computer they wanted and Dell saved money making the computers only when they were ordered” (Hill & Seggewiss, 2008)....
Focusing on the benefits to the business organisation, this is a very important concept for them to gain their maximum potential profits and the success of the business as a whole.
By observing and learning from them, I managed to pick up tips and learned different types of skills, from learning to communicate and deal with other companies, to reading and deciphering many different types of plans.
Whether the users of Google engaged in conduct that give rise to the pleaded representations and any significance should be placed on the choice of medium.