Dell

Dell Corporation

 

Introduction

The world’s leading Computer Company that what dell has approached last decade.  Dell considers one of the largest companies in the universal who sells the computer and gives a good service directly to the customer. Since Dell founded by Michael Dell in 1984, it has been innovating a new computer and software. Dell started when Michael was a student at The University of Taxes in Austin. He created the first PC which can meet costumer’s needs based in his thought during that time. Dell’s strategies and the evolving that the company has been facing, jumps the company to the high level of competition with the other companies such as IBM, HP, Acer and so on. Since the company founded, it has been creating a new idea, strategies and reorganize the company from inside to be one of the high competitive in the market. Dell trends to diversify in its business activity such as, selling electronics arena, offering LCD televisions, projectors, and other products. Today, Dell is spread out worldwide and represents the first company who sells PC’s. These Strategies of business resulted in sales of $80 billion by the end of 2009.

 

History Overview:

            In 1983, Michael Dell was a freshmen student at the University of Taxes in Austin. He invented a new PC that gave him the capability to start his own new business as he did later in 1984. By 1984, Michael Dell dropped out of the school to achieve his dream by owning a company which sells PC. Indeed, he structured his own PC’s company after being interested in entrepreneurship and he had the sense as well. The main concept of his company was to sell the computer systems or the desktop by mailing it to the costumers after they order it. The company aimed to sell the PC one-to-one directly to their clients without distributing it to the retail stores. But the new idea of “building-to-order” wasn’t easy to the company to go over it without facing challenges in which the first challenge was to satisfy the costumer’s needs by customizing the computer and mailing an efficiency computer. Also, having a free number to let costumers call and order their computer was a second challenge. Dell had a perspective of how to a achieve the costumer and satisfy him/her. Indeed, the company was successful and perfect in designing and evolving this idea or the concept. IBM was the dominated company of selling the PCs in the industry during that time. But the lesser price that Dell used to sell and with same feature that IBM had , gained the company a good reputation and the trustable and gave the confident to the costumer to buy a personal computer from Dell by calling the toll-free number and order it and then received via mail. This strategy had led Dell to deserve to become the best brand name in the direct mail market. So, in the end of the year the company resulted with gross of $4 million dollars. In the end of 1985, Dell made $40 million dollars which indicate a good significant in their business. By 1987, the company was the dominated in the mail-order market. So, the company had thought to go beyond the mail-order business and sustain growing. Because of these, the company hired a professional staff in marketing from Tandy coporation in which are their experts are specialize on lowering PCs cost. The new staff built competitive prices in the market that made large firms interested in byeing the PCs from Dell. Since Tendy comitted with Dell to devolpe it , the gross of the company jumped from 23%to 31% and they set a price related to the firm’s cost.  Furthomre, th company sold $4 million worth of computer in one month after they located the first office in London in 1988. Dell became a public a fter their sales had been reached $159 million in 1987. So, they sold 3.5 million shares at $8.5 per share. During a decade after 1987, Dell was strugling from many circumstances in which Dell had faced wars prices from its competitors ,however, the company was working effectively to overcome these war. Also, the economy recession during that time was a big influnce on the company’s growth. The company surpass the situation by cutting the price and extending the period of warranty to the consumer to keep compete with other firms. Dell, started marketing abroad after 1993 to keep in the business. And despite, the company resulted in profit of $149 million in 1995 and become one of the top 5 computer seller in the world. Later in 1996, and to give the trust and the confidence to its costumer, Dell intruduced the line of Network server which was a big revolution to the company in which the expansion had been occurred during that time and these expansion returned back postively to the company by reaching $30 million in their selling for everyday and these was over the internet which represnted 40% of the company’s revenue. Also, the company launched its web site in term of asisstance its costumer. So, the costumer can track their order since it manufactore until it deliver to their location. By 1999, Dell expanded their activity by opening superstore in their web site , so the costumer can find a variety of Dell’s product with good promotion comparing to another companies. Despite, this idea met costumer’s needs. Finally, Dell’s progress is going perfectly as long as it meets customer satisfaction. 

 

Costumers Segmentation:

            In any business we make , we should focus on our customer needs and what would things that will satisfy them. Indeed, that what dell had done and is still tending to do more. The company trends  is to target all its costumers without skipping any of them. So, Dell formed a costumers segmentation categories in which each category describe what does it need and meet their requirements. Dell target :

1)      Large enterprise: Dell has proved that it’s one of the best leader companies that larger sectors commit with Dell in term of providing IT infrastructure and economic solutions. For instance, Dell sold 90% of its sales to large governments and institutions as well. In addition, large corporate had 70% of those sales and these corporate define as firms who bought $1 million in PCs every year.

2)      Small business and Individual : Because wining costumer’s trust is too important to Dell , the firms intends to cover all levels of society whether among low classes people or medium class or among the business level as well. Dell set up a free tall phone number in which it can achieve its costumer in term of increasing its sales in the US. Internationally, the company extended by locating 6 call centers in Europe and Asia that costumer can call for free. Those centers were made to receive costumers orders whether by phone or by fax and even to receive costumer’s complains so the company can solve the issues. Furthermore, Dell started selling its product in its web site in 1995. Indeed, Dell’s sales increased via internet especially internationally to reached $3 million a day in 1997.

           

Marketing Strategies:

The marketing strategy in Dell was simple, just cut out the retailer and sell our computer in cheep price costumers. Furthermore, give the costumers great service and meet their needs by offering a good service to them. The company’s strategy has jumped up Dell to be the largest seller in the world. So, if you want Dell computer , go and get it from the same company by ordering it. 

Since Dell extended their selling via internet , its also has strategies that it implement to achieve its target. Those strategies are : 1) Targeting online marketing: the company should know who is the buyer of Dell’s computer and which website does the buyer prefers to look for a new product . 2)Tracking Marketing: by tracking the advertisement and try to get the result to make an adjustment 3) Relationship: the company should build a good relationship between them and customers and see how satisfied are they? The do it by doing survey to the costumer who bought a Dell computer.  

 

SWOT Analysis:

Strength:

            The company offers a 24 hours service and costumer support 7 days a week. The company became number one in the information technology industry. Furthermore, the firm acquires nine of manufacturing plants. Also, Dell is the largest world’s PC producer. Dell has more than 76000 people as employee inside the company which gives Dell efficient strength. The firm is listed to be number 25th largest company in the fortune 500 companies.    

 

Weaknesses:

            Dell wanted to increase its financial performance in 2006, so, the firm eliminated the bonuses. 1100 employees got laid off in 2003after the company closed the biggest call center. Its big challenge and difficult to Dell to target students of school and collage because they represent 5% of total revenue. The supplier are not involved with Dell. 1900 jobs were eliminated  in 2009  after the company declared of closing of its manufacturing plant in Ireland and moving to Poland to start the production there. Claims being criticized against Dell on its notebook.

 

Opportunities:

            The market on some countries are not exploited such as India, Pakistan and Bangladesh. A big opportunity able to be penetrated from Dell in Education area and Government. Opportunity to be a partner with suppliers. Also, the company has the opportunity to sell its computer to the retailers. Updating technology can has cost reduction.

 

Threats:

            A strong competitors in the market such as (IBM,HP,Acer) which make the market too aggressive. Regulations of each Government. The currency outside the US is changeable. Since the last recession in 2008, many countries got an influenced from this recession in which the revenue of Dell will go down. Dell’s product can be obsoleted by the rapid change in the technology.

 

Recommendation:

• •         Diversify its products.
• •         Be more innovative in the world of technology to sustain as strong competitors with other computer firms.
• •         Involve Retailers with Dell’s business to facilitate the seals and cover all level of costumers.
• •         Participate in outreach programs to create awareness for its products.
• •         Commit with outsource company to give a good study and result to whom has never tried Dell computer before.
• •         Expand its global network to cover most of countries who have never received Dell’s experience.
• •         Carry out extensive market research in order to match its products with customers’ expectation