Analyzing Globalization and Social Responsibility demonstrated by Dell

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Analyze the impact of globalization on DELL, and endeavor to demonstrate the role technology has played.

Impact of Globalization and Role of Technology

Dell Computer was found in 1984 by Michael Dell who was a university student in United States. The company started with the name of PC's Limited and aimed to sell assembled computers. The work was appreciated and the business started to grow in such pace that the company opened its distribution office in Europe within 2 years of company's establishment. The company's name was changed to Dell Computer Corporation. The company was listed in Fortune 500, seven years after starting the business. Dell is among the first companies to sell computers through internet. This hybrid distribution channel has been the backbone for Dell's success till date. It has allowed Dell to access the global market with minimum cost. Dell believes in 'Direct Model' which is built on a theme that product should be delivered to the customers directly because it would help Dell to listen voice of the customers by being closer to them. Today, Dell is one of the largest computer distributors both, in quality and quantity.

Dell's Road to Global Success

Dell is stick with its old model for business i.e. direct business model to make technology more accessible and affordable. To achieve this, Dell is:

Using its conventional direct model so that technology can be brought to established as well as emerging markets.

Expanding its global employment to cater new and diversified skills so that Dell can increase the understanding of global customer needs.

Growing its global supplier network to save time, enhance performance and lower the operational cost.

Treating all employees with respect and providing equal opportunities to grow and develop their skills.

Acting as a good corporate citizen and best practitioner of ethical marketing.

Investments within and outside United States

Dell has catered globalization better than any other company among its competitors. Dell manufacturing plants are at six locations around the globe i.e. Middle Tennessee and Central Texas in U.S; Limerick in Ireland; Eldorado do Sul in Brazil; Penang, Malaysia and Xiamen.

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Manufacturing Units of Dell Computer Corporation all over the World

To boost its globalization strategy, Dell manufactured marketing and sales office in Bangalore, India, in 1996. It was followed by the first India customer contact centres in Bangalore and Hyderabad in May 2001 and 2003 respectively. These customer contact centres got huge success and Dell established another customer contact centre in Mohali. These contact centres are a part of Dell's 50 customer contact centres (approximately) around the world.

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Inauguration of Dell's Customer Contact Centre in India

Bangalore's contact centre has transformed into leading operation for Dell. Furthermore, Global Software Development Centre is manufactured as a critical unit for Dell's IT department. This unit is established to provide application planning, development and testing facilities with integration of business units like operations, marketing, sales and corporate systems.

Investments other than Business purposes

Dell has implemented its corporate social responsibility efforts in different countries. For instance, Dell has established a foundation in South Africa whose work is for addressing basic needs of children i.e. health care, safety, food, shelter etc. In addition to the basic needs, this foundation also provides computer trainings to the children in different South African schools. Dell also has a trainee program to hire underemployed high school graduates of South Africa for minimum of one year in order to give them work experience related to information technology that can act as a catalyst for careers in technology.

Successive Planning

Dell is anxious to prepare generation composed of young people from all over the world for having a pool of talented youngsters to serve the company and society through educational initiatives. To make this vision practical, Dell has launched a signature program "Dell TM YouthConnect". This program would be focusing upon making partnerships with nonprofit and nongovernmental organizations. With the budget of over $8 million, 350,000 students would be targeted in 26 organizations in eight countries. These eight countries include India, Mexico, Brazil, China, South Africa, United Kingdom, Morocco and France.

Dell held competitions to bring ideas from all over the world. Recently, Dell has awarded one college group with $50,000 in seed funding. In the whole process of these competitions, hundreds of new ideas had emerged and improved.

Global Segments for Dell

Dell has planned to reorganize in such a way that it has made four global segments for selling its products to business and government agencies. This restructuring has enabled more responsiveness towards particular segments and is resulting in bringing innovations. These segments are:

Home: Presenting products that are specifically for home users.

Large Enterprise: To facilitate world's largest users of information Technology.

Public: To cater corporate social responsibility through healthcare, education and government.

Small and Medium Business: To provide tailor made solutions and technologies to Small and Medium Enterprises.

Workforce Diversity

One critical success factor behind Dell is its ability to manage diversified workforce. There was an announcement on diversitybusiness.com regarding top 50 organizations for work force diversity. Online elections were happened and over 500,000 diversity business owners got the opportunity to be a part of this election. Dell stood at first place in the list of year 2010 and is named as the number one company in Unites States providing multicultural opportunities. Dell aims to create a culture that can get them access to highly talented workforce, retaining them and provides growth opportunities to them. Dell also sponsors various recruiting events regarding diversity.

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Workforce Diversity in Dell

Dell's Principles of Globalization and Global Citizenship

Dell has made some global citizenship principles that guide it to make its operations globalize as well as to enter new markets and enhance global employment base. These principles are derived from Dell's corporate values and policies for environmental and human rights concerns. Following are some of the principles:

The global operations will be grown responsibly by:

Providing good jobs with benefits and training n different communities and creating an environment that protects health of employees, contractors, customers and public.

Respecting the values and cultures of host countries.

To become a competitive employer by:

Providing competency and reward based pays.

Providing health conscious environment.

To work with local governments in other countries to create job opportunities by:

Developing successive planning network for knowledgeable workers.

Providing on the job training and new opportunities to grow.

To work and contribute for different communities to do their part for society by:

Making a difference through our employees by urging them to participate voluntarily.

Contributing through aid in case of natural disaster.

Working with government, communities and stakeholders to identify the better role of Dell towards the society.

To help the environment for gaining stability by:

Minimum use of materials that can affect the environment and using energy efficient devices to save energy.

Preventing pollution by acting on wastes reduction practices.

Enhance the usage of recycled products.

Discouraging the electronic wastes exports to developing nations.

To stick on strict standards of product safety to give more protection to our customers.

To protect the critical technology by taking laws of every country into account in addition to exports and imports rules, technology and software regulations that are made to protect technology by avoiding customers who exploit technology for hazardous use.

To respect the privacy of the customers around the globe by keenly administrate the storage and usage of their personal information as often companies sell customers data to advertisement companies or other businesses.

To expand its global access to bring more innovation and latest technology with affordable prices by:

Communicating and collaborating with our suppliers and vendors to raise each other's standards.

To gain excellence in above all processes as Dell has committed to gain operational excellence, continuous learning, excel in customer experience and leading in global market and being a company which would be known as a great company to work in, and the best in implementing human resource and social practices.

Commitment to Global Safety Standards through Suppliers

Dell is working on producing operations that are carbon-neutral operations. The idea is to minimize the use of energy and emissions of carbon from operations and maximize the purchases of green power. Dell has maintained ISO 14001:2004 certification for manufacturing its operations worldwide that is backed by product development and recycling globally which are also certified through ISO 14001. Dell is one of the safest workplace with an impressive health level (better than average health level in the industry).

As a global company, Dell pushes its suppliers to adapt international standards so that they can work for Dell only if they are approved from International Standards Organization (ISO). In this way Dell brings its vendors and suppliers up to its product and supplies requirement level as well as does its part towards society.

Task 2

Corporate social responsibility, corporate governance and ethics are extremely vital in any corporate organization's strategy. Evaluate how corporate organizations like DELL, implement them.

Corporate Social Responsibility is an integral part of a business now days because the customers expect the companies to act in a sustainable and ethical way. This evolves the necessity of ethical marketing and Corporate Social Responsibility for doing a business globally. All the growing firms are now trying to enter into commercial collaborations with non-profit organizations, or work solely to do their part towards society (Cunningham 1997; Mescon and Tilson 1987; Ross, Stutts and Patterson 1991). As Dell is one of the best companies doing business globally, Corporate Social Responsibility is understood and has been practiced well since last decade. Dell has implemented many activates regarding this concept and is still looking to enhance these activities in order to act their part towards society. There are many social programs which have been launched during last decade and many more to come. Some of these programs are discussed below:

Dell Social Innovation Competition

Dell had organized the competitions for bringing ideas to change the world. Recently, Dell has awarded one college group with $50,000 in seed funding. In the whole process of these competitions, hundreds of new ideas had emerged and improved.

Forest Protection and Logistics

Dell is using two-sided approach to reduce the virgin tree fiber use and has increased forest friendly paper use. In 2009, Dell collaborated with one of the best transportation and logistics providers who are keen to deliver damage free and timely deliveries.

Dell YouthConnect

Dell is anxious to prepare generation composed of young people from all over the world for having a pool of talented youngsters to serve the company and society through educational initiatives. To make this vision practical, Dell has launched a signature program "Dell TM YouthConnect". This program would be focusing upon making partnerships with nonprofit and nongovernmental organizations. With the budget of over $8 million, 350,000 students would be targeted in 26 organizations in eight countries. These eight countries include India, Mexico, Brazil, China, South Africa, United Kingdom, Morocco and France.

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Dell TM YouthConnect

Greener Products and Packaging

Dell has emphasized on greener products and their packaging and have stressed on the use of bamboo as a raw material for this purpose. The main reasons behind selecting bamboo are its local availability, ability to grow quickly (24 inches a day), its strength and durability and it promote healthy soil. In addition to the above features, bamboo packaging is certified as compostable and is verified by Soil Control Lab.

Dell's Greener Products and Packaging

The bamboo is used in about half of the Inspiron Models and Dell Streak. 25 percent post-consumer material is used in boxes. Furthermore, Dell is working with Unisource Global Solutions which is bamboo packaging supplier, to ensure the meeting of highest standards for all the processes.

Dell has aimed to reduce its wastes of packaging with a weight of 20 million pounds by shrinking its volume of cube up to 10 percent and 40 percent increase in recycling contents inside the packaging.

Dell is committed to environmental concerns so much that it has topped the ranking for Newsweek's Greenest Companies in America for 2010. Dell was at number 2 position last year but its hard efforts and commitment to social activities have made it possible to top this category.

There was a survey done by Boston College Center for Corporate Citizenship and Reputation Institute and it was released that in a public perception survey (U.S. companies), Dell was among top 50 companies.

Easy Recycling for Home and Business

Dell offers responsible and safe recycling option for individuals and businesses. There are different options for disposing old equipment and are offered absolutely free. These options are to drop off, to donate or to arrange a pick up. Dell is the first company in United States who banned the export of non-working electronics to developing nations to prevent health, safety and environmental issues. By coordinating with Dell in recycling, we can control electronic wastes by keeping these wastes away from entering landfills as well as cleaning our places from the equipments that we do not need by disposing or donating responsibly. Customers have some other options while selecting Dell for recycling their equipments as business customers can have some confidential data, Dell provide them Asses Recovery Services so that they can protect their sensitive data.

Efficient Carbon-Neutral Operations

Dell is working on producing operations that are carbon-neutral operations. The idea is to minimize the use of energy and emissions of GHG from operations, maximize the purchases of green power and offset the remaining GHG emissions responsibly. Dell has maintained ISO 14001:2004 certification for manufacturing its operations worldwide that is backed by product development and recycling globally which are also certified through ISO 14001. Dell is one of the safest workplace with an impressive health level (better than average health level in the industry).

Energy Efficient Products

Dell aimed to make their desktop systems and laptops more efficient as up to 25 percent. To catch their aim, Dell has launched a campaign 'green by design' for all of its products. These products will be composed of such components that are most energy efficient i.e. integration of Energy Smart and ENERGY STAR as well as exceeding the environmental standards. Dell's multiple displays like E1909WDD, E207WFP, and G2410 etc contain 25 percent recycled content in chassis plastic. LED laptop displays are brought into the market because they consume 43 percent less power even at maximum brightness which has resulted in remarkable cost as well as carbon savings.

Dell TM Green Store

It is a one stop solution that has aimed to facilitate in finding energy efficient products, waste reduction and minimizing the environmental impact. This store combines small and medium products covering different categories i.e. desktops, servers, laptops, monitors, workstations, printers and accessories that are built by considering environmental impact.

Water Saving and Treatment

Water is not used in Dell's manufacturing processes, but they use water in cooling systems, rest rooms, landscaping and general cleaning. Dell has remarkably improved water usage by improving irrigation systems and replacing old equipments with the efficient ones. One stunning feature of Dell's operational system is that its assembly processes are free of excreting industrial wastewater. Furthermore, Dell has located its production facilities in suburbs that provide municipal sewer treatment. Even on-site sanitary sewage treatment is done at some production facilities.

Workforce Diversity

There was an announcement on diversitybusiness.com regarding top 50 organizations for work force diversity. Online elections were happened and over 500,000 diversity business owners got the opportunity to be a part of this election. Dell stood at first place in the list of year 2010 and is named as the number one company in Unites States providing multicultural opportunities. Dell aims to create a culture that can get them access to highly talented workforce, retaining them and provides growth opportunities to them. Dell also sponsors various recruiting events regarding diversity.

Dimensions of Diversity

Human Rights and Workplace Safety

Dell admits that Business can do a role in protecting human rights but navigating this role is a complex thing to do. Dell culture has a central focus on understanding national laws, values, and different cultures. Workplace safety is an integral part of human rights in Dell culture. It includes some key initiatives discussed below:

Behavior based safety whose primary focus is upon preventions from injuries through person to person behavior observations, changing unsafe behavior through positive reinforcement and developing proactive behavior in human resource.

Employee-led safety and emergency response teams which are made under the conditions of Occupational Health and Safety Assessment Series (OHSAS) and programs based upon Voluntary Protection Programs (VPP).

Ergonomics programs which are used to identify the problems and give solutions to motion related activities to prevent injuries over time.

Workplace health and safety training programs to provide instructions regarding instruments, ergonomics and emergency responses.

Stretching at work shifts start in manufacturing areas so that muscles strains can be prevented during workday.

Partnerships with Academic Institutions

Dell often recruits talent from universities and colleges that have minority populations. Dell has sustained a strong relationship with United Negro College Fund (UNCF). Dell offers graduate and undergraduate students paid internships, financial assistance, hands-on training and housing travel as a part of successive planning for Dell's upcoming human resource. Dell had extended support for Howard University in supply chain management programs. Furthermore, Dell has collaborated with GLBT community in University of Texas to conduct an on-site information session for graduate and post graduate students.

Task 3

Discuss the environmental influences faced by DELL, and how these affect its ability to achieve its objectives and deal with competitors.

The Dell Computer Company so far is been considered the most successful business company in the world among those that are in market for the past twenty years. In 2005, the company was titled the Number 1 Personal Computer vendor in the world besides being an unknown start-up in 1984.With its unique strategy of doing business, it has enabled itself to be the highlight of the computer industry comprising of some big giants including HP, IBM and Microsoft. Dell has maintained its sustainability and competitive advantage by using its superior customer service and market leadership and strong financial results.

Environmental Analysis

Internal Environment

Dell has developed its structure on the concept of 3-m model. As Dell is a multidivisional company with different operating divisions representing separate profit centers, it implements the cooperative form of related constrained strategy. Dell's corporate utilization consists of sharing of R&D, finance, marketing, human resources, manufacturing, and information systems. This combination is possible because "Dell pride itself on a 'flat' corporate structure that encourages each worker to contribute "innovative ideas (Martinsons).

Core Competencies

Cost Differentiation strategy

Dell has remained consistent in being a cost leader in the industry and yet provide high quality PCs by using its Direct Business Model approach. This model helped Dell to keep just- in-time manufacturing, built-to-order products, low inventory and direct customer relationship with manufacturer. It also enabled Dell to cut out the intermediary costs.

Build-To-Customer Order

Dell has enabled to excel in another advantage over its competitors by including in its operating system the build to customer order strategy to sell PCs directly to customers. This has resulted in Dell being able to understand the customer's needs better and providing the solutions that are most effective for meeting customers need. Dell has a direct dealing with its customers, suppliers and communicates directly with employees. Company's market penetration is sustained by this simple concept.

Just-In-Time (JIT) Inventory

The third core competency of Dell operating system or internal environment is its JIT inventory system using which has enabled Dell to meet the customer's requirements within time and by using fresh inventories (less than five days old). This inventory period saves time and money for Dell. Surplus supplies cause extra costs so Dell saves this extra costs for its customers with the added advantage of custom designs for the customers.

SWOT Analysis

External Environment

Dell's external environment can be classified under three components:

The Remote Environment

The Remote environment is made up of economic, political, social, technological, and ecological factors. Dell faced healthy economic conditions in US till 2008 but after the crisis due to the recession in US markets the sales revenue was affected by decreased demand. This impact later affected the global revenues as the impact of crisis spread globally to other markets. There are no significant political pressures faced by Dell. Its technological environment is a rapidly changing one where its important to cope up with the advancements.

The Industry Environment

 The industry environment is made up of entry barriers, supplier power, buyer power, substitute availability, and competitive rivalry. Dell's industry structure is highly competitive and is explained through Porter 5 force analysis.

The Operating Environment

The operating environment is made up of competitors, customers, labor, and suppliers. Fir the customers of Dell, it is a quality brand at a good price. Its competitive environment is intense with major brands like HP, Sun and IBM fighting neck to neck globally with Dell with very less price and quality differences. This has raised the effort for Dell to provide its customers with a unique value package that others don't offer. One of such efforts made by Dell is not using Microsoft's operating system which other computer brands do, but this is considered a weakness compared to the rest. Other factors where Dell has enabled to manage the lead are:

Price for Performance

Dell's procurement, distribution and manufacturing processes allow the company to offer powerful systems and services at prices better than competitors.

Customization

Every single order is built according to the individual requirements of the customers as customization is always been an asset for Dell.

Service, Support and Reliability

Dell's services that are provided directly to the customers have allowed company to give high customer satisfaction before and after the sale.

Latest Technology

Latest technology is an essence of Dell's strategy and this strategy has enabled Dell to stand out among all the competitors who are still relying upon indirect distribution channels. The inventory turnover of Dell is on average of six days which helps in keeping low inventory costs.

Porter 5 Forces Model

Summing up the External Environment of Dell, it can be said that with the operating system implemented by Dell, which includes its direct selling and build to customer order, Dell has managed to increase its sales each year and is among the top competitors of computer market. Its different approaches have allowed Dell to enter into this highly competitive market in a unique way. Dell is performing in the right direction and sales are increasing dramatically overtime. However, threats from market rivalry, intensity of competition and bargaining power of suppliers and buyers is an acute issue and thus requires Dell to keep formulating hard core and sustainable operational and selling strategy in terms of the value it provides to its customers (Byrnes, 2003).

Dell's Business Level Strategy

The market was already much fragmented when Dell entered in 1984 and had reached the maturity limit. At that time, Dell entered with its unique direct selling model which gave it a competitive edge through its low selling price. Dell has always looked to the market trends as an aid for the development of new products as the overall market for IT and related products is influenced by trends. Now customers are more aware and educated about their purchases ad so they want increased customization, portability and durability, creating a constant need for Dell to meet their demands. The competitors are also much efficient in responding to changing trends of market and to any strategy opted to get part of their market share. Thus Dell also needs to take care of this issue of intense market competition.

From start till yet, the base of Dell's Business Strategy is giving its customers a superior feel in what they are buying by providing them with made to customer order products at low prices and fast delivery. This strategy, although tried to be replicated by many others, has enabled Dell to sustain the intense and changing threats from market and be able to increase the scope of its operations from US to almost everywhere globally (Byrnes, 2003).

Recommendations for Dell

Improve few features in Dell's product differentiation strategies.

Control R&D patents:

Dependency on extreme standardization and outsourcing must be reduced.

Innovative services must be introduced instead of services based on packages without patents.

Affiliate with other players in market to achieve better advantages and compete using combination of huge range of products. Its simple website e-business presence might not be enough.

Rethink its Virtual Network by moving from the short term outsourcing in value chain activities to lessen prices to a more appropriate long run effective idea to be better able to meet competitors.

Moving from Hardware to Software would be another good option which can allow Dell to start developing proprietary software.

Functional Strategies

Some functional level recommendations are:

Enhance customer experience by making corresponding products available at its website.

Another improvement to be made can be of increasing the market share in educational market by exploring ways to generate attention from education markets particularly college students by either using product differentiation through more aggressive sales marketing. (Cuizon, 2009)

Dell may use social networking sites for advertising.

Conclusion

Dell is working in an extremely intense market for personal computers, particularly laptops now. The industry is driven by ever changing consumer needs and demands and thus for companies like Dell, it requires constant effort to keep up with the adaptation so as to satisfy the changing needs of customers. Dell, with the help of its strengths, keeping close eye on weaknesses and investing properly in opportunities while coping with threats from macro-environment can enable itself to position and sustain itself as a significant player in the intensely competitive market.

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