SummaryThe Summary contains below is the strategic plan of the Dell Company to perform excellent in the computer industry. These plan discuss includes environment analysis, strategic choices which the company had and to implement it.
It is being seen that the Dell has bright future if it continually keep its best performance in the computer industry and shows its leadership position by maintaining the sustainable product and also keep track on the longer term goal by focusing on the consumer needs. Along with this the company has to come up with new innovative ideas with the emerging technology as per the market requirement. HistoryAn 18 year old college student, In 1983 founded Dell named Michael Dell by upgrading the hard drives from IBM to develop new systems. Within one year span of time, his business service has been raised to $6 million from computer upgrades with local business. SO he decided to drop out from the school and start to concentrate on business only.
By the end of the 1985, the sales of the company reaches to $70 million as the Dell change its strategy and started to offer custom built-to-order machines. When Dell changed his strategy and started offering custom built-to-order machines, the business exploded, with $70 million in sales by the end of 1985.With the advance in the development of Dell, the company starts to exploit events of the industry and decided to fulfill the market conditions. After 5 years, the total gross of the company was $500 million which was unbelievable figure and become the national suppliers of desktop and portable computers. Dell has continuously increase in sales and its profit margin increases to that level that the company became the most successful in the PC history with the amount more than $25 billion at the end of 2000.
StrategyTechnology StrategyThe technology strategy of the Dell Company is “To become the undisputed leader in the computer industry by displaying unparalleled excellence in product quality.” The strategy will remain consistence as the company core objective is to provide best quality product and good customer service to the customer as they satisfied from all point of view. Strategy will have great impact on the key guide and also motivate to enhance its objective. The company has to maintain the quality of product by which the customer are satisfied and they keep maintain the highest position in the market. The mission statement is maintaining the consistency of overall quality of product to its best standards. .
From the beginning of the millennium Dell was consider as the King of desktop and laptops. Heading into the new millennium Dell was known for its desktops and laptops. Now the company was changed from Dell to Dell Inc. shows the evolution of the company with diverse product supply.The diversity of Dell keep apart from all its competitors. By the end of the century Dell has become Dell, Inc reflecting the evolution of the company to a diverse supplier of technology and products. The diversity is what sets Dell from its competitors. In 2003, Company entered into the business of printer market with number of different types for commercial and business use.
The printer range from simple printing to all in one printer and also laser printers. The company also manufactures its cartridges and sold separately to the customer. In 2006 the product was discontinued in the face of fierce competition from the IPOD and other MP3 manufacturers. Industry DynamicsInternal Environmental AnalysisStrengths:Brand reputation and awareness is excellent.Cost effective product and also low cost product available online. Negotiate inventory buildupLatest technology model direct to customer.
·Customization of the product.Development of Internet salesWeaknesses:Absence of proprietary technologyComponent supplier dependencyOpportunities:Increase market sales in the growing computer peripherals industry. Developing new emerging technology market worldwideThreats:More threats from the competitor about the products.Big threats from the overseas market due to fluctuation in the exchange rateExternal environment analysisCompetitive RivalryDell is being competed by the leading competitor businesses like Apple, IBM and HP due to their offline distribution network in the field of the computer peripheral industry. But Dell strategic of selling its highly cost model direct to customer provide a company strong advantage in terms of cost. This helps the company to sell more product to the customer and provide the good customer service.
Threat from new entrantsAs Dell is recognized as superior in the computer peripheral industry since long time, it doesn’t have any major threat from the newer brand player in the market. The key strategic of dell to show its product best for the customer was the customer service and sales strategy which is very difficult for the other player to reach at that level.Power of customersDell and all other companies in the computer peripheral industry is well known about the key to success is to fulfill the customer needs and try to give the best customer support in all possible manner.
In order to achieve the power of the customer, the company has to take care of the bulk buyer like government and also big organizations. Also smaller buyer play important role in bringing the sale of the peak level to some greater extend.Bargaining power of suppliers:The suppliers play a critical role in the success of the company in case of Dell which doesn’t hold inventory and try to fulfill the all the necessary requirement of the customer. In that situation, if the company has to sell the component to customer, the suppliers play a vital role to meet the expectation and demand of the customer.Positioning-Michael Dell portrays his company as “the good guy. The owner Michael tries to portray his company as the good guy and given a slogan “better, faster, and cheaper”. The words of the slogan are being viewed in the brand name, customer service and also in the manufacturing orders which leads to high quality and most important product. Dell has a great reputation in the market as its product is highly appreciated by people and has a greater impact on the sale of the other brands.
The other company lack both in quality and the cost compare to the Dell.The strategy of Dell was to choose best class providers like Intel and Microsoft for each of the component and try to invest more in the R&D to come up with more advance products. By the time during 2001 the Dell becomes the leader in the US market in Wintel sales. Target MarketThe main target of the Dell is on larger consumer corporations after that they try to focus on the secondary consumer like small and medium businesses.
The Company also target the global market but with less effort. The company tries to put more impact on the consumer which has little knowledge of the computers. ProductsThe product of the Dell has vast varieties from PC’s, Laptop, printers, network related devices storages devices and other peripheral devices use to make complete systems. The company sells those products in bulk a lot more cheaper price and also has a very good quality with less defected ratio of the product.
PricingThis is very important criteria in the success of the product in the market. As the Dell decided to enter into the market with tis product, it uses its direct model sales approach and sales at low minimum level below than that of their competitors. The low pricing helps the company to have larger scale by maintaining its require profit margin level.
The company sales the product online direct in mail order, sales promotions, over the telephones, Internet and catalogues.Sourcing and Internal Innovation of TechnologyDell has to do whatever it is doing in the present market which is rely on the direct to consumer model and try to enhance the value of the share in the market in competition with other competitor like Apple and HP. The company has to expel its business in the new emerging market like India and china to its all best possible manner and try to replicate it success of USA in those countries by keeping in mind the local condition instead of direct to customer model. Dell is continuously investing a high amount of its resource in its R&D and came up with new and innovative product which is enough for other competitors. The way of working like these makes Dell to be perceived a cost effective and known to be the good quality computer peripheral developer in the long history. Nowadays the design of the product depends on the market trends rather than larger strategy.
Colored product and complex design draw attention of the customer but it make the product little expensive and increase in productivity. As the company moves forward in the direct to consumer model, its product must gain a level day by day like HP, Lenovo and Toshiba. If the company will launch the product that have higher price due to its complex highly demanded features will affect the sales of the product that will be shown by time only. The impact of this change on the company’s overall performance will take some time and it’s too early to say before the time. The design will have more impact on the sales of the company. As the first Dell PC was introduced in1986, since then Dell is continuously keep on shaping industry, breaking its old ground and develop new platform in order to make it product secure in the market. The company makes the product for home, small business and also larger organization. Every one of them is fully satisfied by its quality and service.
Dell’s R;D is being driven by some of the industry well known engineers and designer who came from all part of the globe put all their effort in bringing the company to top level. The innovation approach of Dell keeps delivering new and better solution that address the customer needs.Listen. On the daily basis the company gathers the important information from thousands of the customer through different events, social Medias, and by interacting with the customer on daily basis. The company tries to build partnerships with the wide variety of company experts in software, hardware and also have very good relation to the suppliers in order to make the product successful. SolveNumber of innovation for the company started in house and head up to the global team of engineers, good product developers and also technical experts.
In the strategy of Dell, team effort plays a vital role for the success of product. Mission statement suggests that to deliver an innovative product and also cost effective to meet today’s real life customer challenges and continues to work in the present environment with different amount of products. Product Development StrategyThousands of engineers, designer and product developer work hard globally to meet the customer demand and provide them best customer service. The workeddone by the employer is shown in the market as the continue usage of the product globally.
The presence of Dell globally shows its innovative standards in the market from some of the important ways. Wide variety of ideas and skills that the company employers gained. Satisfied the global customer needs and offer them a range of different product as per their needs. Some of the advantages to customer are:Importance of Dell product globally was due to its overall product quality and also it lower cost. The team work globally brings affordable technology to the new market and offer customer with all its potential benefits. The headquarters and design center located in Texas, but the company has expanded its business globally in few years. The company has developed its strength of skill in the area of its expertise and also establishes innovation facilities around the world.
Different centers of Dell:The Austin, Texas center is a headquarters, which is the original design center for laptops, server and storage development as well as product development and documentation. In 2005, Singapore design center was established for two lines of business i.e. Dell Display and imaging. These lines totally work on the display screen, projectors, TVs along with printers. The Bangalore center was established in 2005 which mainly focused on software developing, server development international technical support and test and also engineering and documentation.
China Center which is located in shanghai use to develop desktop systems, also client system testing and service. In 2003, Taiwan center was establishing with the aim of desktop and server development and provide data center solution. In 2006, Dell acquired a firm named Alien ware in Florida, which was producing high performance laptop, media devices desktop and other professional electronic systems. The company believes in positive attitude for their product success. So Dell management system point out that it is their job to short out the new technology in the market and work according to it in order to stay alive longer time. The strength of the company is that the company has a direct contact with it customer and talked to them and get feedback from them to identify the needs and problem which they face by using it and try to bring cost effective solution. Dell has almost 1600 engineer working onproduct development and spends more than $250 million annually to improve user experience about the products. The engineer tries to make the product latest and with best technological which is user friendly and also cost effective.
R;D department used to focus on controlling quality of product and on the product assembly process. Some of the time wasted in tracking the new technology in the market and take lot of time in developing new product. At any circumstance company try to find out the vendor progress in the long lasting batteries because the battery life is important for the buyer of computers. Dell made first lithium ion batteries with a life of 5 to 6 hours in all laptops. The Blue Ray technology and DJ shows put the company to a benchmarked in the market that is being followed by other companies. Strategy to Protect InnovationsSome of the new product that a company develops which is its own property and the company tries to make it personal through innovation protects business strategy. There should be some protection on the innovative product so that there will not be conflict in the market so the company can save time and resource to protect it assets to increase competitiveness in the market. Dell protects its new ideas and innovation by patents, copyrights and trademarks for their survival in the market.
In order to remain survive in the market with its new and innovation idea to increase financial growth and keep steady in the market. Dell can gain the technological wealth and commerce from its trademark and patent, recent technology, identification of the partner and keep track of the innovative activities of the competitors. Managing Intellectual property and gaining top level makes the company superior from other competitor worldwide. From what IP protection helps are:Helps to protect the copying of company product and services Only useful investment in the R;D and marketing by the company From trademark and branding creates corporate identity worldwide Negotiating agreement like licensing franchising and all other intellectual property. Raising value of the company in the market.Access to new marketPatent shows an innovation made by the company which denotes the new andimproved product which contains the new ideas or principle used for industrial application. A patent is the monopoly of the company granted by the state for its new invention and help to complete it design for market use.
TRADE MARKSTrademark of the product show its brand identity which can be denote as different words, symbol or other features that link the customer to the product and differentiate the quality of the product. Trademark is a sign of a particular business to identify its good or services in the market and distinguishes from other businesses. COPYRIGHTCopyright is generally deal with the literature, music and cinema world or artistic work. The creators of those kind of work gain right at the same time and prohibit copying its blueprint and having control throughout the future use. The copyright is important to prevent the unused of the original works.
The things that people can protect it through copy rights are music, TVs and radio broadcasting, art work, computer software, maps and plan etc. This right doesn’t cover only to originator but also to the people who perform work. DESIGNSDesign specially concern with the specification of the product i.e. Function like color, shape, configuration or materials. Design of the product means a whole design or part of the product.
The design may include 3D design such as the texture, shape and hardware and 2D design such as patterns, color and lines. Mostly we have seen that the customer first choice is on the appearance of the product that how it look like from its outer surface. Sometime if the product doesn’t have good design then the registration of the product fails.
ConclusionAs we had discussed the strategic plan which implement the best quality standard in the business process. But as we mention earlier that quality is the major strength of the Dell, the key is to enhanced the quality of the product to higher level with the latest technology. Further, apart from thePC market, Dell should look out for possible M;A opportunities in other businesses where demand is still growing at a much faster rate. It should not only look for newer product territories, but also look out for improving its market share and presence in newer emerging markets such as India and China by pursuing aggressive marketing and sales strategies and thus protect itself from the lowering of sales in its stronger markets such as USA.
Apart from concentrating only on the PC market, Dell have to find all possible track to expand business as the demand of the product is still increasing at rapid rate. The company has to lookup other market like India and China that is still growing in order to increase the market share. By perusing the market grip over those countries then the company will dominate in this field as the company has lower sales in USA.BibliographyINFORMS – Interfaces – Inventory Decisions in Dell’s Supply Chain – Vol. 34 No.3 May-June 2004.
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