Dell Computers Strategy Global companies play an important role in the business environment, because they connect their business 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 (Pads), software, computer peripherals, and more.
They design, build and customize products and services to satisfy a range of customer requirements: from he 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. Dell Inc. Has realized that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost.
With the power of their direct model and their team of talented people, they are able to provide to their customers high-quality, relevant technology, customized systems, superior service and support and products and services that are easy to buy and use. GLOBAL STRATEGY Dell was created on a simple concept: it’s Direct Business Model, which starts and ends with our customers. Michael Dell firmly believed that by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs.
This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dell’s understanding of customer expectations. The direct model allows the company to build every system to order and offer customers powerful, richly- configured systems at competitive prices. Dell also introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, turning over inventory every four days on average. Dell Inc. S at the top of innovation and technological development in computer’s industry; and Innovation is the only sustainable competitive advantage available to the business. Dell is enhancing and broadening the fundamental competitive advantages of the direct model by applying the efficiencies of the Internet to its entire business. The company is increasingly realizing Internet-associated efficiencies throughout its equines, including procurement, customer support and relationship management.
Dell is the world’s most preferred computer systems company, and a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Dell’s climb to market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling computing products and services based on industry- standard technology. Revenue for 2006 totaled $55. 908 Billion USED (2006), Net income $3. 572 Billion USED (6. 9% profit margin) and the company employs approximately 5,200 team members around the globe. BUSINESS STRATEGIES ; Customer-Driven: Dell innovation starts with customers. These requirements drive Dell technology initiatives, innovations, and product directions. For that reason, Dell has made alliances with its customers, sharing risks and profits, allowing the customers to participate in the making decision processes. Therefore, Dell Inc. Manufactures and sells only what the customer needs; they can suggest alternatives to adding values to the products.
Consequently the relationship Company-customer becomes stronger and probably the customers develop more loyalty to the brand. Effective Research and Development (R;D): A fierce commitment to producing consistently high quality, custom-made computer systems that provides the highest performance and the latest relevant technology to the customers Dell products may be developed in house or by working closely with strategic partners. Customer feedback throughout this cycle reinforces Dell’s focus on relevant technologies that address real customer requirements. Open Innovation: Dell R&D organizations steer enabling industry standards and technologies through industry groups and strategic partners, and develop innovative, nonparametric, open standards-based products. Dell’s focus on product leadership and continuous improvement produces significant innovation. The U. S. Patents granted to Dell for its developments in product, online and operations technology provide examples of this innovation. ; Build-to-order: They provide customers exactly what they want in their computer systems through easy custom configuration and ordering.
Build-to-order means that they don’t maintain months of aging and expensive inventory. As a result, they typically provide their customers with the best pricing and latest technology for features they really want. Scalable economy/Low-Cost Leader: By simplifying operations and improving utilization, organizations can take advantage of cost-effective scaling. Industry- standard enterprise hardware and integrated systems management tools enable organizations to pay as they grow and as demand dictates. They focus resources on what matters to our customers.
With a highly efficient supply chain and manufacturing organization, a concentration on standards-based technology developed collaboratively with their industry partners, and a dedication to reducing costs through business process improvements, they consistently provide their customers with superior value. Precipice. Com Business models are possibly the most discussed and least understood facet of the web. Brokerage models, such as Precipice. Com are market makers: they bring buyers and sellers together to facilitate transactions. Precipice. Mom leads the way to a unique new type of e-commerce known as a “demand collection system”. Precipice. Com is the world’s first online buying service through which consumers name the price they’re willing to pay. Leveraging the unique attributes of the Internet, Precipice. Com finds sellers willing to meet buyers’ needs and price. Jay Walker, the founder of Precipice. Mom, created a new concept and business model. This model shifts the setting of prices from sellers to buyers. The company seeks to use its patented system on products such as airline seats, hotel rooms, gasoline and groceries.
Using a simple and persuasive consumer proposition called “Name Your Own Price,” Precipice. Com collects consumer demands for a product or service at a desired price. Precipice. Com reroutes that demand within their own databases or simply directly to participating providers. Precipice. Com fulfills customers’ offers from inventory provided by participating sellers. Precipice. Mom enables sellers to generate extra revenue without disrupting their existing distribution channels or retail pricing structures.
In this sense it uses the Internet’s communication and information abilities to turn customary retailing upside down; alternatively it opens up to the individual consumer a form of transaction which has previously only been open to corporate entities. Due to coloratura trends, Precipice. Com faces numerous growth opportunities. More and more consumers are shopping online. Technological advances have made online shopping secure, providing a greater sense of security for online transaction. With younger generations adhering to online purchases, Precipice. Mom’s customer base has room to grow over the years. Also, with dual income families, households are more likely to have extra money to spend on traveling. Expedite, one of Precipice. Coma’s biggest competitors, offers the same products as Prickliness. Com except with added value to its customer. Customers can make specific choices and receive answers in a matter of minutes, as opposed to at Precipice. Com customers can not. Traceability. Com, is also a leader in online discount tickets, they also offer a larger range of features than Precipice. Mom and offer superior customer service. Conduction. Mom, not as big a threat as Expedite or Traceability, auctions the tickets to customers. Hotelier gives customers discount fairs, customers do not set prices. Hotelier is an alliance between six major airlines which poses as a serious menace to Precipice. Com. Orbits. Com offers similar services than that of Hotelier; however it is under investigation for anticompetitive behavior. These 5 competitors pose serious threats to Precipice. Coma’s survival. It is important to keep in mind that, it is possible to get real service from a regular travel agent who may find customers almost as good a discount as the online services.
At the same time as providing clients with assurance, recommendations, and suggestions. There is no doubt that there will always be that market that will go the extra mile simply for a very cheap discount. But they’re unpredictable and not very loyal customers. They are more likely to switch online ticket provider simply to find the lowest price. Precipice. Com Cutting out the middleman seem like a great idea, but Precipice. Com needs to do more than what has been doing in the past years. Available options for Precipice. Com could be as following: Option 1: Concentrate only on travel related products.
Automobile sales, personal finances and long distance telephone calls could be dropped. In its place, introduce additional products related to traveling such as vacation packages, bus tickets, train tickets and cruises. Option 2: Improve overall customer service. Create a different approach to servicing customer. Offer more flexibility for customer to choose certain features as regards to their discount inquiry. Option 3: Expand all products internationally. Precipice. Com could consider offering all of its products on an International level. At this point Precipice. Mom is doing business globally in the airline ticket sales, but not in other products. Especially expanding the hotel and car services internationally. The thirty busiest airports measured by number of passengers are in the United States, Europe and Asia. Interesting new markets for could include Europe and Asia. Airports in England, France, Japan and China are in the top 30 busiest passenger airports. Option 4: A combination of option 1 and option 2. Concentrate on the travel industry and offer more features and flexibility to the customer, while providing the best customer service.
Option 5: Combination of option 1, 2, and 3. Provide better customer service by offering more feature form witch customers can choose, concentrating on travel related products in an international setting. At this point, the best alternative for Precipice. Com is option 4. Precipice. Com need to use its first mover advantage and concentrate on travel related products. This way Precipice. Com could concentrate on what it does best, as opposed to spreading out to multiple industries. 92% of its revenues are from the airlines ticket sales. The brand would be attributed to only the travel industry, reinforcing its brand power.
Product such as cruises, train tickets, voyager bus tickets and vacation packages could replace the non-travel related products; automobile sales, personal finances and long distance telephones calls. These products are not generating sufficient revenues. Its best if the Precipice. Com brand is attributed to travel. On its own, the patent is no longer a viable source for Precipice. Com. “Name your own price”, has perhaps created a negative affect for Precipice. Com. There are probably customers who wish a faster response mechanism for quotes.
By introducing another more straightforward medium for the non-risking customers would be beneficial for recline. Com. Customers could simply type in their desired departure location, destinations, and departure and arrival dates. In turn Precipice. Com could search its database and provide customers with instant discounted rates. Also, excellent customer service is a must for Precipice. Com, especially with increasing competitors that are offering essentially the same products. Internet businesses can’t survive without repeat business. If Precipice. Mom implements excellent customer service, it will be able to retain and sell again to first-time customers. If not, its customer base ill leak away and move on the competitors. Dealing with all aspect of customer service, Precipice. Com needs a complete overall. EBay. Com Organizations normally reformulate their marketing strategy several times during a product’s life cycle. Economic conditions change, competitors launch new assaults and the product passes through new stages of buyer interest and requirements (Kettle, 2001 , p. 484). Consequently a company must plan strategies that address any changes in the market. EBay Inc. S the world’s largest and most popular person-to-person trading community on the internet (Bradley, 2001, p. 1). From its inception eBay was unchallenged however with Amazon. Coma’s (Amazon) entrance into the online person- to-person auction arena and other competition from Yahoo! Auctions, Auction Universe, and Insane, eBay was faced with the issue of how to separate themselves from competitors and maintain market leadership in an increasingly crowded marketplace. Michael Porter stated that value is what buyers are willing to pay, and superior value stems from providing unique benefits that more than offset a higher price.
There are two basic types of competitive advantage: cost leadership and differentiation (Porter, 985, p. 3). Attempting to compete based on cost would be a poor move for eBay. Their competitors already offer both lower costs and many offer similar services at no cost at all. Therefore, eBay must be able to differentiate themselves from their competitors in order to maintain market leadership. Differentiation is the act of designing a set of meaningful differences to distinguish the company’s offerings from competitor’s offerings (Kettle, 2001, p. 0). EBay needs to focus on creating a product or service that is perceived as being unique throughout the industry. Services are extremely difficult to differentiate themselves however Kettle (2001 , p. 90) notes that services are able to differentiate themselves by developing a differentiated offer, deliver or image. EBay will continue to be a market leader if they are able to continue differentiating themselves by focusing on their brand image, continuing to offer innovative features, and supplying a delivery service with proprietary technology.
This uniqueness should translate into higher profit margins and keep them above the competition. Service companies are able to differentiate their image through symbols and branding. A recognizable brand name is extremely important to the continued success of eBay. EBay was the first mover in the online person-to-person auction industry and because of it they have a competitive advantage which will help differentiate themselves from their competitors. By focusing on their brand image eBay will be able to attain brand recognition, brand preference and brand loyalty.
With a strong brand image consumers are able to recognize the eBay name and instantly know what it stands for and the service they provide. Amazon with an already strong brand name has used advertising in an attempt to make their brand ore recognizable. EBay should continue to use television and internet advertising to differentiate their product and add value. Proper branding creates loyalty. In order to achieve brand loyalty, eBay must continue to focus on their main strength, online auctions. The image that needs to come to mind when consumers think of online auction needs to be eBay.
Consumer perception is a result of branding strategy and eBay needs to remain focused on making sure their brand is instantly recognizable. Services are also able to differentiate themselves by what they are able to offer consumers. Internet businesses require more than a storefront to be successful. One major concern that prevents consumers from using online purchasing sites are concerns about data privacy, protection of personal information, and a confidence that they will receive goods purchased. Bay should focus on continuing to provide innovative features in order to separate themselves from their competitors. The biggest concern for online consumers is trust and safety. EBay has introduced a number of trust and safety initiatives, such as a verified user program, insurance for items and enhanced feedback forums (Bradley, 2001, p. 6). Bay has been able to stiffen anti-fraud measures and has instituted some of the most innovative and consumer friendly programs in the industry to protect its users from fraud, deception and misuse. Yahoo! Ailed to make a dent in the online market because of trust and safety issues (Bradley, p. 10). Amazon has followed in eBay’s insurance footsteps and borrowed and improved upon a number of features on eBay’s site. EBay must continue to address consumer protection challenges through innovative programs. Consumers will recognize their continued effort in providing innovative features and will be rewarded with brand loyalty. Bay has also used the innovative feedback forum as a way for customers to evaluate one another in order to ensure customer confidence.
As a service company, eBay needs to continually seek innovative ways to improve the customer experience. EBay needs to continue to focus on making its shopping place as safe and secure as possible, otherwise consumers with turn to other competitors. EBay must continue to meet the challenge by developing creative programs that respond directly to consumer concerns. They also need to continuously review their capabilities, approach and structure in order to ensure that hey meet and exceed customer needs and expectations. Finally, services are able to differentiate themselves by designing a superior delivery process.
A service firm may win by delivering consistently higher quality service than competitors and exceeding customers’ expectations. If the perceived service meets or exceeds their expectations, they are apt to use the provider again (Kettle, 2001, p. 428). One of eBay’s biggest strengths and should remain superior service. They have been able to achieve superior service because of the variety of products offered and the strength of the eBay community. Consumers are able to search eBay for almost NY product and eBay has a category variety that is unmatched by any of its competitors. Also, eBay has been able to create a sense of community. Bay provided more than a venue for selling items, they created an online community which gave buyers and sellers a place to socialize, discuss topics and provide feedback. These seem to be designed in order to foster a large community which would ensure repeat customers. EBay should remain focused on the needs of consumers and make sure they remain the main priority. EBay should continually come up with new ways to reach out to their customers. They need to be an active listener and learn and spends to customer needs. Companies that listen to their customers turn casual customers into loyal customers.