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Dell Computer Corporation

Essay by   •  March 1, 2011  •  Research Paper  •  3,141 Words (13 Pages)  •  1,343 Views

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Dell Computer Corporation

Dell Computer is maintained and increased their competitive advantage. They want to maintain a low cost position to maximize the value passed on to customers, while driving costs lower and lower. They also want to drive aggressive pricing and profitability gain share. Dell wants to always put customers first and remain aggressive about driving improved customer value across all Dell business. Employee support of Product Leadership, Customer Experience, and Globalization is also important to the company. They want to have the best product in the marketplace and gain as much share in the market as possible. One way of achieving this would be to drive more than two-thirds of their sales and service transactions online.

Dell Computer's strategies are built around several key elements: build-to-order manufacturing, mass customization, partnerships with suppliers, just-in-time inventories, direct sales, market segmentation, customer service, and extensive information sharing with both supply partners and customers. With build-to-order manufacturing, Dell built its computers, workstations, and servers to order based on the needs of their customers. The orders were directed to the nearest factory. They reorganized plants and shifted to "cell manufacturing" whereby a team of workers assemble one PC rather than typical assembly line production. The result of this change was that there was no-in-house stock of finished goods inventories and they did not have to wait for resellers to clear inventories before new models could be pushed into the marketplace.

The next strategy I'll discuss is Dell's partnerships with its suppliers. They partnered with reputable suppliers of PC parts and components rather than to integrate backward and get into parts and components manufacturing on their own. They decided that they would partner with as few outside vendors as possible and that they would stay with those vendors as long as they maintained their leadership in technology, performance, and quality. This laid the basis for just-in-time delivery of suppliers' products to assembly plants. Direct sales were another attempt to achieve Dell's desired objectives. They gave Dell firsthand intelligence about customer preferences and needs, as well as immediate feedback on design problems and quality glitches. By doing this they could quickly detect shifts in sales trends and getting prompt feedback on any problems with products. This gave Dell a significant advantage over rivals. Dell also made a special effort to segment its buyers into relevant groups and to place managers in charge of each group.

Dell focused on customer service in order to maintain close customer relationships. This allowed Dell to become quite knowledgeable about its customers' needs and how their PC network functioned. Many corporate customers paid Dell fees to provide support and service. Their strategy was to use the information that came from customer service activities to improve product quality and speed execution. Another way Dell saved time and money was through "virtual integration." This was a way for Dell to communicate with its supply partners and customers in real time through an Intranet system. All three groups appeared that they were part of the same organizational team.

Recently, Dell has decided to focus much energy to Internet technology. For example, Dell technology Consulting is a program where customers can tell then what would improve their overall experience though the Internet. Dell is also designing web pages that are tailored for corporate customers to order online. The speed associated with the Internet has allowed dell to slash inventories and keep costs down so low it can under price rivals by 10% to 15%.

Michael Dell is a charismatic leader who has led a company to great success. However, all of his competitors see him as the man to beat and they are constantly looking for ways to do it. They are copying his direct sales and build-to-order strategies. He should be sure that he covers all his bases and always keeps one eye on his rivals.

The biggest area of expansion for Dell is the consumer market. In order to develop more sales in this market Dell needs to focus more advertising on the needs and wants of the consumer. Currently Dell promotes its direct model, which is a key factor Dell needs to create a better position for itself in the consumer market. With all of the PCs in the market being more or less equal, Dell needs to focus on what differentiates its products from the competition, namely service and support.

The advertising campaign needs to focus on the emotions of the PC users as oppose to merely their logical side. With a strong emotional ad campaign focusing on the anxieties and fears of the consumers when it comes to making the decision for a computer purchase Dell can reassure the consumers that we are there for them. The direct model and more importantly the virtual integration should be the focus of the campaign as oppose to a "teen-age" part-time employee at your local mall. Why would anyone want to go into a super store where the salesperson pitches everything under the sun to you before you finish telling them what it is you need. With the build-to-order direct way Dell operates "you tell us what you want, we don't tell you what you want."

The advertisement campaign will need to be coordinated in print, television, radio and obviously the Internet. Dell can also integrate the direct mail pieces and catalogs with the new pitch to further expand its reach and frequency. Dell can also continue to work towards the small and medium businesses through this strategy using a similar "mirror" campaign in the trade publications and in trade show displays. The idea will be to have the campaign as recognizable and incorporating the "Be Direct" slogan that made Dell what it is.

According to the Boston Consulting Matrix a "Star" is in a high growth market such as the PC market and the company has a high market share as in Dell's case. With a "Star" the recommended strategy is to build. In this case the all of Dell's products, desktops, notebooks, workstations, and servers fall into the "Star" scenario and as such Dell needs to utilize strategies that will build the market. By building the market a company can realize the maximum potential of the product line, if a "Star" is left alone its true potential may never be realized. With the PC market currently in the growth maturity stage and competition is at its highest Dell will need to implement strategies that will continue to maintain their market share and work to develop new markets. There are a few different strategies that can be used in this stage. The first

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