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Dell was founded in 1984 on a simple concept: that by selling directly to customers, Dell could best understand their needs, and efficiently provide the most effective computing solutions to meet those needs.
"We are combining Dell's Internet expertise, and our unique ability to organize resources around distinct customer needs, to create new Web-related capabilities. The Dell advantage is based on direct relationships, low cost, speed to market and e-commerce expertise as much as it is on Internet hardware, appliances and customer services and support." Michael Dell (1998) says who is the chairman and CEO of the Dell computer company.
Today, Dell Computer Corporation is a top direct computer systems company in the world, and more than 46,000 employees work for Dell across 34 countries worldwide.
Dell is a global company operating in 34 counties, and more than 46,000 employees work for Dell. It is organized along geographic line into the Americas, Asia and Japan, and Europe, Middle East, Africa. Each of the regions has its own regional headquarters and its own assembly plant and supply network.
Dell's business activities are organized in each region around different customer segments, although, each region has different managing method, but generally includes: relationship customers, home and small business and public sector customers, such as governments and schools.
Dell leaders characterize that environment in a statement of corporate philosophy called the "Soul of Dell". It defines that the kind of company, everyone would be aspire to become, serves as a guide for their actions around the world, and ultimately forms the basis of the "winning culture." According to dell Environmental Report (2003) shows that there are five elements of the soul of Dell:
Customer: They can commit relationship, providing the best products and services based on standard-based technology, and outperforming the competition with value and superior customers' experience.
The Dell Team: they believe their continued success line in teamwork and the opportunity each team member has to lean, develop and grow. They are still committed to being a meritocracy, and to developing, retaining and attracting the best people, reflective of their worldwide marketplace.
Direct relationship: they believe that the direct relationship with customers, partners, suppliers and each other, and operating without inefficient hierarchy and bureaucracy, which can make them, do best than other competitors.
Global Citizenship: They are committed to understanding and respecting the laws, values and cultures wherever they do their business; profitably growing in all markets and contributing positively in every community.
Winning: They can win everything that they do, and providing superior shareholder value over time.
Dell business model is simple in concept, but very complex in execution. First, they did not use the agent to sell the products. They undertake channel to sell Dell computer for customers. Customers should be order on the Internet when they want to purchase the computer. Second, building PC's to order means that Dell must have part and components on hand to build a wide array of possible configurations with little advance notice. Third, because of fill order quickly, Dell must have excellent manufacturing and logistics capabilities supported by information system that enable it to substitute information for inventory. On the one hand, Dell Company can use their particularly sale channel gain more profit and market share. On the other hand, this business model can give customer maximum satisfaction via minimum distribution channel costs.
According to concept of "Soul of Dell" and their business model, the Dell company organization structure should be like this (Figure 1)
In effect, Dell has had to create similar but distinct functions in each of the major regions, and to future customize its marketing and service functions for individual countries. The process of globalization has shaped Dell's own structure, and leads Dell run to the largest computer company in the world.
Dell's focus on integrating improved environment performance into all aspects of their business is strong and driven in large part by their commitment to serve customers and to do what is right for them and the world they share. The company goal is no computer should go waste (Parra & Hamiln, 2001). Therefore, they continue to improve their environmental performance by establishing and integrating environment goals for product design, manufacturing, and recycling services into their operations, measure and communicate their progress against their goals.
Dell's environmental programs for product asset recovery and product design for environment have spanned more than a decade. Server years ago, they are manufacturing and operations facilities attained ISO 14001 certification, but today, they building their own environment management system infrastructure to support effective management of their environment impacts and achieve their environmental goals: no computer should go waste. According to Dell Environmental Report (2003) shows, Dell's environment policy include six byelaws
Achieve an environment: The mission is to fully integrate environmental stewardship into the business of providing quality products, best in class services, and best customer experience at the best value.
Design products with the environment in mind: Design products with focus on: safe operation throughout the entire product life cycle, extending product life span avoiding environmentally sensitive materials
Prevent waste and pollution: Operate Dell's facilities to minimize harmful impacts on the environment. Place a high priority on waste minimization, recycling and pollution prevention.
Continually improve their performance: The environmental responsibility among employees and management. They use environmental management system approach to establish goals, implement programs, monitor technology. And continually improve environmental performance.
Demonstrate responsibility to stakeholder: Act in an environmentally responsible manner through sustainable practices designed to ensure the health and safety of Dell's employees, neighbors and the environment. Engage stakeholders to improve products and processes.
Comply with the law: Conduct business with integrity and dedicated observance of environmental laws and regulations, and strive for leadership through programs that surpass compliance.
Dell's environmental policy sustains a company culture that targets improvements at every phase of the product life cycle, from initial concept and design through manufacturing, customer ownership, and the end-of-life reuse and recycling solutions. The resulting Dell business practices help ensure that products and processes protect the global environment and maximize conservation and recovery of resources.
Dell building their own environment management system infrastructure to support effective management of their environment impacts and achieves their environmental goals. The environmental management team (EnMT) at Dell provides an oversight infrastructure made up of general managers and vice presidents representing functional areas that may significantly impact the environment, and purpose of the EnMT is to review, approve, and provide resources for Dell's environmental initiatives, policies, and strategies (Michael S.Dell 2003). From Dell's Environmental Update (2003), The EnMT uorks in conjunction with other vital functions that provide balance to the overall EnMT infrastructure: the environmental policy advisory team (E-PAT), the core teams, and the office of the CEO. (See figure 2)
A company can be success by decision on various factors. Because they could best understand the customers' needs, and provide the most effective computing solutions to meet those needs.
Today, Dell is enhancing and broadening the fundamental competitive advantages of the direct model (see figure 3) by increasingly applying the efficiencies of the Internet to its entire business. The company designs and customizes products and services to the requirements of the organizations and individuals, and sells an extensive selection of peripheral hardware and computing software. Nearly two-thirds of Dell's sales are to large corporations, government agencies and educational institutions. Dell also serves medium and small businesses and home-PC users.
When we look at 2003 fiscal year for Dell (see figure 4), fiscal 2003 was Dell's strongest year ever. They increased shipments, revenue and earnings per share at double-digit rates. The commitment of people to directly deliver customers the best standards-based technology at the beat value led to full-year revenue of $35.4 billion, and net earnings of $2.12 billion. While they got very good performance, but they are not satisfied (Dell annual report, 2003). They made significant progress against four strategic initiatives: product leadership; growth in markets outside the United States; creating an exceptional customer experience, and advancing our winning culture. Improvement in those areas is helping expand their company competitive advantages and sustain superior operating results for the long term
Anyhow, for the future success, Dell should remain publicly committed to making the market leader by constantly refining its direct business model and the company's processes to deliver superior value to customers. Especially, to further exploit the Internet and keep being the leading electronic developed supplier of PCs and even try to become the market leader in some new markets; to further develop their new organisational form - virtual integration; and to further develop processes of learning and responsiveness to the market.
Strengths: price for performance, customization, service and support, latest technology, superior shareholder value, unique information from the relationship with the customer, strong track record of moving at the right time; inventory move fast; ratio of accounts receivable is high.
Weaknesses: shortage of key skills in some areas, e.g. not very good at personal sales; lack of dominant component suppliers in the networking sector.
Opportunities: the Internet offers special potential in expanding internationally; e-service; the direct model offers unique opportunities to build different types of relationship with suppliers and customers; opportunity from the alliance between Dell and American Online.
Threats: facing falling prices; uncertainty about technology development; customers are switching to Internet-based purchasing are probably just the ideal conditions; the industry relationships are strained and changing fast; revitalized, more sophisticated competitors.
In conclusion, the Dell computer is successful in global markets as a result of the Dell could best understand customers' needs and their direct sell business model. They can produce different computer to supply the different level of customers, Moreover, they continue to develop new computer and ameliorate their organizational culture, business environment and selling business model, in order to increase more customers.