Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Business strategy of dell
Describe dell computer success business strategy
Business strategy of dell
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Business strategy of dell
Environmental Analysis of Dell Organization
Industry Environment
Competitive Rivalry
The competitors to Dell are as follows: Hewlett-Packard, IBM, and Sun Microsystems (Hoovers). HP and IBM pose the biggest threat in competition. Dell's sales overview has increased each year except for 2001 to 2004. In 2001 the annual sales in millions were $31,888 and a major increase in sales in 2004 at $41,444.0. (Hoovers).
In terms of Entry Barriers, Dells direct to consumers sales approach has increased their sales each year and they will soon be among their top competitors. Because of this approach, Dell has entered into this highly competitive market in a unique way. The biggest entry barrier that Dell has to face when entering into the technology industry is having customers gain the trust of company over the more popular veteran computer companies. Nevertheless many of competing companies use a range of different suppliers. Competitor Sun Microsystems annual sales are lower than Dell's. They offer an online service where customers can order servers, and personal computers. They differ from the rest of the organizations is that they do not use the Microsoft operating system which is a weakness compared to the rest. Sun does not see Dell as a major competitor, in obvious place of Dell; they see Microsoft as a major competitor along with Hewlett-Packard and IBM
This being said, Dell is performing in the right direction and sales are increasing dramatically overtime as mentioned above, and the competition exist between the companies and that what makes Dell unique. The increase in sales between 2001 and 2004 proves the success for the organization.
Operating Environment
Consumers view Dell as a quality brand at a good price. Some consumers find that Dell's competitors may be a little more expensive but still offer a quality brand the company plans to launch a sales campaign "Dell on Ice" that will offer 15% discounts on its Blade Centre system and on its x440 top-end Intel server. (Shankland). Dell ranks high with customers because the company offers free technical support if needed. The purchasing process has changed for the consumers with Dell because all the ordering is done online which offers convenience to its customers and minimize inventory.
The flow of materials from suppliers into Dell starts by the company putting in orders to factories that are based on two categories. These two categories are product type and geography.
1. How and why did the personal computer industry come to have such low average profitability?
Each company or organization belongs to a market industry that includes three components, the remote environment, the industry environment and the operating environment. These factors impact the decisions that organizations make in order to provide the best services and products while maintaining a high profit for the company. Lockheed Martin is a multinational aerospace manufacturer and advanced technology company, formed in 1995 by the merger of Lockheed Corporation with Martin Marietta (Lockheed Martin, 2008). Lockheed Martin is affected by the macroeconomic environment, the economic decisions that the organization itself makes and the industry environment.
What are the key environmental forces that created an opportunity for Robert Stephens to start the Geek Squad?
In the future our firm could offer, the facility to make computers to consumers tastes, needs and budget. This is what the Gate Way Computer Company, which was very successful.
Why has Dell been so successful despite the low average profitability in the PC industry?
Firstly, with the operating system market there are no actual barriers to entry. Any one firm can enter into the market and introduce their operating system. A number of powerful firms have indeed done so.
The major competitors of Apple are Dell and Samsung out of which Samsung is the
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
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.
Dell is one of the renowned companies in the world. If someone is asked to name the companies, which sell computers, he/she will definitely include the name of Dell (Martin 2002). In fact, it is widely accepted brand in the world. However, with the arrival of rival companies, post 2007, for Dell, it was testing to stay alive in the race in the computer industry. Dell in effect is acknowledged by some experts as one of the vulnerable brands. Hence, it would be preemptive for the corporation to continue to exist in the contest, where big companies, such as Apple and Acer have dominated the market by this
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.
In 1995 Dell entered the Chinese market. With a population of 1.3 billion this was a great new market for Dell to tap into. IBM, Compaq, and Hewlett-Packard had all ready realized this and had opened offices in China in the early 1990s.
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.
According to the casing study, Intel’s “Rebates” and Other Ways It “Helped” Customers Intel paid customer huge pay. As the dominating company, they purposely paid other companies not to use ADM products. They paid Dell 6 billion dollars over a 5 year period (Velasquez, 2014). In addition, they knew ADM would not be able to compete with them: they took advantage of their size and used their rebate program to try and ADM from advancing in the x86 processor industry. In addition, Intel’s monolply-like behavior is displayed in the terms of quality. They did not care about customers wanting the reliable x86 processors, they wanted to monopolize the market with their product, and would pay a huge amount of money to achieve their
Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization’s performance. The analysis entails assessing the level of threat or opportunity the factors might present. These evaluations are later translated into the decision-making process. The analysis helps align strategies with the firm’s environment. The importance of Environmental Analysis lies in its usefulness for evaluating the present strategy, setting strategic objectives and formulating strategies.