Business And Global Strategy Dell example essay topic

... ter market is saturated with many computer manufacturers. In fact, there are many smaller companies that offer build to order computers as well as other similar products and services. As the demand for computers flatten, it's become increasingly apparent that the computer industry has reached maturity. Another indication of a mature market includes the most recent consolidation of Hewlett-Packard (HP) and Compaq. The major competitors in the industry include Dell, the new HP, Gateway and IBM.

Dell has been very successful at maintaining its brand loyalty and continuously strives to maintain its low-cost operations. Business and Global Strategy Dell pursues a differentiation strategy. They are able to maintain their position by providing their customers with superb value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use. Dell has been able to increase its market share and sustain its competitive advantage by initiating price wars within the industry.

This business strategy has made it very difficult for incumbents to compete. Dell's global strategy is to be the premier provider of products and services, including customers require to build their information-technology and Internet infrastructures. With manufacturing facilities and sales offices throughout North America, Europe, Asia and South America, Dell is responsive to their customers wherever they are. In addition, Dell uses outstanding products, services and direct relationships to meet the unique needs of those customers, one at a time. This concept is indicative of an international strategy. Thinking its direct sales business would not grow fast enough, in 1990-93, the company began distributing its computer products through Soft Warehouse Superstores (now CompUSA), Staples, Wal-Mart, and Sam's Club.

Dell also sold PCs in 19 Latin American countries. Because of higher costs and incorrectly low profit margins in selling to individuals and households, Dell did not pursue the consumer market aggressively until sales on the company's Internet site took off in 1996 and 1997. Management noticed that while the industry's average selling price to individuals was going down, Dell's was going up! X people who were buying their second and third computers, who wanted powerful computers with multiple features, and who did not need much technical support were choosing Dell. It became clear that individuals liked the convenience of buying direct from Dell, ordering exactly what they wanted, and having it delivered to their door within a matter of days. In early 1997, Dell created an internal sales and marketing group dedicated to serving the individual consumer segment and introduced a product line designed especially for individual users.

The company advertises in computer magazines, takes orders by phone and builds to order. Already 12% of its US business is sold from its internet website. It targets the more knowledgeable second time private purchaser of PCs, some 30-40% of whom buy direct. This is a sector of the market, which can only grow. The world PC market is forecast to be worth $250 billion by the year 2000 and Michael Dell thinks 8-10% of this is not any unreasonable target for this company. Despite the majority of staff being aged 20-30 the company culture is not casual.

Suits are worn every day except Friday and even then when meeting with clients. Besides the thrill of working for a high-flying company, money is the main motivator used. Staff is appraised annually, paid 13 months salary for every 12 months worked plus a bonus paid on the basis of their personal and business unit performance. Everyone is encouraged to take part in the company's stock option scheme and 200 of the workforce have already become millionaires thanks to the soaring share performance. Staff expansion isn! |t limited geographically either. Manufacturing plants have been added in Penang in Malaysia, Austin in Texas and Limerick in Ireland.

Some 3,000 new staff was recruited in 1997, bringing the total headcount to some 10,000 employees. Expansion strategies will mean continued expansion of this young workforce. The leadership of the company is good in the United States here there is a very definite culture of leading from the top, with a very charismatic and personable leader in the form of Michael Dell. However, in other geographical regions there are problems in the management of the company. The strategies used in the Unites States can therefore been seen as successful. The marketing in all countries can be seen as being strong as the market share has been built up very rapidly.

The major occurrences in this company must be seen as the growth that has taken place over the last three years; the growth has taken up a lot of the concentration and planning. The main problem now is building on the current situation, slowing down of the growth and increasing market share where there is a presence. There is also a great deal of stakeholders whose interest needs to be considered here. These can be seen as"h Shareholders; Shareholders are the owners of a company, they have recently seen share values drop and there are no dividend pay outs, therefore they will want to see increases in the share price again. "h Directors and Management, including Michael Dell, here these are those who run the company, but are also employees so they want the same as the employees but hold a higher level of responsibility". h Employees; These can be seen as one of the primary rather than secondary groups and spread throughout many countries. The way that they are influenced by the company can be seen as far reaching, and as such there are expectations on both parts. Employees will expect to be given a fair wage as agreed at the times agreed and in line with the rest of the industry". h Unions; these are an extension of the employees and expect communication and negotiations as well as co-operation between the employer and the union". h Suppliers; these stakeholders can also be seen as a primary interest group, they expect the company to remain in the money and to pay invoices correctly and on time". h Customers must be seen as a primary stakeholder group, and it is their interests as well as the companies for there to be a strong infrastructure in place.

Recommendations The recommendations here are strong and clear. The expansion by way of growth into new countries and Croatian new markets needs to slow down other wise Dell will not have the infrastructure to support that growth. There need to be greater communication and an increase in the spread of the company culture with greater international involvement and a greater team attitude. This will take time, but with increased communication and also better administrative systems put into place the level of fragmentation may be reduced.

There are also other aspects in terms of socialization within the company to increase the way that the culture is seen, this may include new training programs, international newsletter as well as agreements between the companies, which will open communication more as well as make sure that that the service levels remain strong as these are one of the routes by which the company differentiates itself form others in terms of gaining a competitive advantage as seen in the five forces presentation. Conclusion If the company undertakes this as a strengthening exercise before attempting to increase growth again, in this way we can see that the majority of the stakeholders will be satisfied to some point as well as the resources the company uses being developed in terms of maximization. It is unlikely that the short term will see growth as has been see in the past as phenomenal growth like this is not sustainable, but as time goes by there may be an appearance of dividends as well as an increase in share price at a more steady rate. Therefore we recommend that the suggested strategy in consolidating at the same time as reducing debt and increases the company's positive culture are the right way to go.