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Technology Forecasting And Strategic Planning In Dell

Paper Type: Free Essay Subject: Commerce
Wordcount: 5385 words Published: 1st May 2017

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The prediction of technology can be described as foreseeing where technology is going to be in the future. Steps must be observed when a statement of a project is made. The choices and resolution ought to be gritty at the establishment of the plan succession in order to foresee the future and be aware of the technology’s to apply. In addition due to the other alternative technology options, forecasting is required on a regular basis for companies, if possible the forecast result may be enumerated earlier and changes can occur. These results can be measured and this will approximate the level of the transformation needed. Another feature of technology forecasting is doubt about the impacts of technology in this world, for example inflation. Inflation is a decline in the power of money; it has influenced technology both in good and bad ways. Creditors will lose money and debtors will gain money when an unexpected inflation occurs. Tools such as field testing, interviews and prototype are been used together with forecasting to obtain assurance in the marketplace.

Any organization that is capable of putting into practice valuable prediction will be more prepared to look for the stability between handling demand for goods or services and the ability or facility to meet this demand. The capability of utilizing this distinctive stability helps an organization to utilize this as a benefit for competition over its competitors.

Strategic planning is the method of approach used in making choices and assigning its supplies to follow this approach. It provides the basis and structure of a business arrangement. Organizing the strategic plan of a business is an effective requirement for business success, without this plan most business will probably be unsuccessful. Analysis technique which dells employs for strategic planning is SWOT analysis refers to the strength, weaknesses, opportunities and threat that a company undergoes

Strategic planning questions involve a number of of the following enquiries:

-What do we produce?

-What do the customers want?

-How can we satisfy this want?

Once the objectives and goals of the company are defined, strategic planning and forecasting have to be put in place to achieve this. The objectives or aims of an organization are basically a more visible declaration of the idea or vision identifying the undertakings to be attained if the vision becomes a reality. The set out goals are more recognized proclamation of the exact or precise activities necessary to realize the goals beginning from the present or existing position. At this stage, preparation developed should cover the following issues: Vision, Mission, Value, Strategies and Programs.

The aim of this essay is to illustrate and demonstrate the various ways the company dell applies forecasting and strategic planning to its business operations, how they interact with each other and method used. The objective of this essay is to critically evaluate the concept of success of this company, followed by organisation factors researched on this topic.


Information was collected from Internet sources, Academic books and journals.

History of Dell.

Dell was founded by a man named Michael Dell in 1984.His aim was to designs and customizes its computers according to the needs of the customer. Michael Dell was still a student of University of Texas and the company was still called PC’S limited. The year after Dell produced its first computer of its own specification and named it Turbo which had eight megahertz processor. What makes dell different is the fact that it allowed individuals to customize their products when ordering. Michael Dell made a change in the ways computers were been sold. Product line today includes desktops, laptops, and servers. The company make profit of 73million dollars in the first year of trading. In 1988 the company went PUBLIC giving shares for 8.50 a piece and changed its name to Dell. The first dell laptop made its appearance in 1991 and in 1933 dell company became one of the top fives company companies in the world. In 1996 their products were sold through the website. It grew between the 1980s and 1990s to become the largest seller of computers. Operations carried out by dell include customizing hi tech products like laptops, desktops and servers. In 2010 dell has topped HP and Acer in the production of computers. Dell says the customer comes first and that is an integral part in the company’s structural heritage and hierarchy is creating long-lasting partnership and working with them to provide their needs and provide solutions that support their success. The concept of solution being driven to address the specific customer challenges. Michael Dell said “we are becoming the pc outstanding company not just the pc supplier” (Hedrick and struggles,1997) in 2005 it took first place among the ranking of “most admired companies” issued by Forbes magazine. Dell has undergone a series of past events. one of which was achieving an increase in dual numbers in sales done yearly. The vision statement is to operate hand to hand with partners and supply readily products at all times including the supply of quality customer encounter in the market place. Dells main opponents are HP and Acer. In the marketplace and small industry it encounters contestant from fellow direct vendor, gateway. As dell progresses into new service business such as creating of none computing products like television, it faces new competition such as LG.

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Dell’s achievement stayed through the subsequent years though could not completely stay away from the universal disaster of the PC business of the new millennium. Dell’s enlargement speed has drop down, ensuing in a decrease in its store value. On the other hand, Dell has been able to remain a triumphant business, as its increase speed “persists to outpace the entire business”. Distant from this, Dell has been determined to go into fresh marketplaces and, therefore make bigger its merchandise assortment servers, desktop, PC’S also flat-screen TVs. Dell transformed its name in 2003 as of “Dell Computer Corporation” into “Dell Inc.”, so as to “reflect the growth of the business from a PC producer to a business that make available a broad selection of technology equipments”

Strategic Process of Dell.

The strategy of Dell is crumbling income margin all through the PC market, a terrible growth for competitors who can’t continue. Dell is charging its mechanisms not so much such as modern inventions except for airline tickets and little margin in products. Capability in Dell is quite rigid with many large computer suppliers like Toshiba and Sony. Societal issues also influence the commerce surroundings of Dell. Companies that sell computers have to recognize that in the Chinese tradition, individuals are still unconfident about credit card sales because of the enormous cost of computers in China. Corporations then must put in door-to-door or facial contact procedures to increase consumers’ reliance and consumers believe in the corporation and its merchandise. Dell also has attained the ISO 14001 Environmental Management System (EMS). Dell aspires at product plan, moving of goods and many more. Since part of Dell’s ISO 14001 EMS, the association put into operation of achievements where by the aim is to make it get better inner trade environment performance in a nonstop development procedure which is applied to contribute to achievements all way through the company. Dell has placed to expand its product name further than ordinary computer merchandise by influencing its status as head of e-commerce. Dell began to re-identify in year 2000, as the corporation that is acquainted with how e-business work. It has contributed to its online transaction expertise with a small number of large clients as they build up their own E-commerce abilities.

Dell features a few energy from its opponents; in the case of Information Technology as the EDI tool offer extremely efficient prospect in decreasing costs and it can launch the rigid connection involving Dell with its providers and Dell with its clients. Dell began trading its own kind of handheld computers, named the Axim, at little amount which can be regarded as high prospective and CEO, Mr. Michael Dell mentioned how Dell’s accomplishment lay in making it as simple as possible for a person to buy a computer. There are a number of applications that are presently life form utilized by Dell and they are essential to the important procedures of Dell production and the Dell direct which are its functional reasons for achievement. A few application are presently being made use of by Dell are important excluding the fact that they are not regarded for certain significant achievement.




Situation Analysis



Key success factors for Dell includes:

-Product customization for business and consumer customer

-Economical prices

-Better connection with suppliers

-Produce customization for Business and Consumer client

-Superior customer deal

– Outstanding cost arrangement


Large business and government

Industry, home offices and small business

Customer recognition and


Telesales supported by direct sale force in local offices

Publicity and promotion


Open account and third part listing

Credit cards and third party leasing


Manufacturing to order and shipment through third party carriers

Manufacturing to order and shipment through third party carriers

Business strategy:

Dells Company’s success is the connection among all of its competencies. The direct sale is dependent on the built-to-order system, and the built-to-order system relies on the supplier integration system.

Hence a dell pc is intended to reduce human touches in making, contractor are certain to make sure high product excellence, contractor are physically included into making and the whole charge accomplishment process id run by a stylish mixture of inner and outer information

A benefit of direct sales and build-to-order making is that costly catalogue doesn’t put up in the path and doesn’t gain its value earlier than it can be put on the market and fresh goods can be brought in not having to remove older inventory in the path. Dell know so much information about the end user, information such as: what product was bought from dell, how many products were bought, where the product was delivered to and so on. The following discuss how the company achieved success, the process involved.

-Direct sales

-Build to order

-Supplier integration

Direct sale

Michael Dell said this direct association “assemble important information” concerning the client, therefore Dell is familiar with its clients, details that allow Dell to propose add-on products and services, and remain, in wide-ranging, closer to the client. this “make available Dell with assets of promotion and manufactured goods growth idea”.

Michael Dell states that there are two major services which bring Dell closer to its clients: Premier Pages and Platinum Councils. Premier Pages, now called Premier.Dell.com, are modified IT procurement and help websites for big customers, which allows them choose and control their acquisition from Dell, hence leaving to salespeople a more review task. Premier.Dell.com stands for a personalized auction place and as Dell has discovered how important that is, it has enlarged the amount of Premier Pages from 1000 in 1998 to 50,000 in 2000 Platinum assembly are local gathering of Dell’s major clients, where management, salespeople and technicians talk about their practice with Dell and their requirements and prospect from the technology. in addition, Dell’s client understanding proposal, Dell meeting, the Direct2Dell blog and the Idea Storm demonstrate the significance that Dell set on its client interaction

This model called the direct sale model has been in existence for ages. Dell Company produced almost all its products after an order was made by a customer. Presently, Dell is among on the few computer makers that builds their own personal product. This type of process has successful over the years. It’s a competitive advantage over competitors, while also selling its products at a lesser price. Dell also managed to offload much of the financial burden of manufacturing to suppliers, and its manufacturing efficiency is legendary, because of this model dell has grown faster than its competitors HP and Acer.

Final customer



Build to order

The original trading model that Dell has initiated within the PC business has broken the “we contain to build up the whole thing” existing vision of the globe and has administered to draw attention to constituent gathering as a deferential important action of a pc business, The build-to-order plan takes this accomplishment more advanced.

Dell select dealers who are “knowledgeable, understanding and the capability to transport products on time” and their presentation is frequently assessed against pre-settled method. In fact, quarterly Dell gets together with its dealers to give straight response on presentation and upcoming prospect. The presentation is assessed with the help of a scorecard that evaluates each dealer with its rivals based on price, superiority, dependability and delivery. As compensation, Dell’s executed dealers are endowed with guidance and help in order to advance their progression.

The method Dell used in developing maintenance for the 100 percent construction ability, importantly to enhance its need in planning and company appropriate performance, order to minimize the time taken in ordering delivery of services and improve the customer’s service. They went into partnership with Accenture to rapidly produce an innovative, high-performance chain of supply and development resolution. Because of usage of this model dell has grown faster than its competitors HP and Acer

Presently, in Dell’s foundations is all over the world and the program paid an excess.

The company has the ability to become accustomed more quickly and efficiently quickly varying technologies, and also keeping up with its reputation as a high-performance industry.

Dell is a ruler provider of products and services required for customers to construct their technology infrastructures. The company was originated in 1984 and presently has about 34,400 employees in 34 countries, worldwide marketplace contribute in surfeit of 15 percent, and yearly revenues of almost $32 billion.

Supplier integration

Traditional computer companies had to be vertically incorporated and developed the many gears of the computer themselves. When Dell first started off, the traditional process could not be afforded. Instead, Dell leveraged savings finished by others and decided on the release of answers and system to clients, which is the mind of the direct business model. This has allowed Dell influence their relationships with both its suppliers and customers. Though the small amounts of dealers of Dell are the correspondent of associates and are treated as if they were actually a fraction of Dell. This partnership will last as long as each partner maintains its leadership in technology and of course quality. The dealers of Dell are given precisely what the daily needs of the company will be, thereby making it possible for the open access of information which is mutual sharing among Dell and its supplier. Technology boosts the economic incentives of such type of association due to the fact that it speeds time to market and creates respect that is shared among purchaser and vendor This type of partnership, thus posses the challenge of change on focus from how much inventory there is as well as how fast it is moving and is calculated by inventory velocity, which has Dell functioning with dealer to repeatedly decrease inventory (stock) and increase its speed.

The channel plan used by dell:

The act of deciding a channel supply chain is an essential and effectual strategy which is very compulsory. The supply chain master can make a influential new channel that decreases its contestant s access to vital aim financial records and the marketplace area. There are battles between the producers, distributors and competitors over client possession by means of inter company supply chain associations. The success of this supply chain associations are the explicit ideas. The internet also opens new prospects and extent for enhanced customer deals. However the companies newly produced channel should retain the fit among a companies business form. in the premature period of a technology produce life cycle, distributors are significant for following innovative adopters. An improvement straight channel scheme gave dell these fundamental basics of its supremacy packed business model. The main suppliers of dell come mainly from pc makers who are of the same group. For example, IBM for the hard drives as well as Intel which it has used for its sole source of its microprocessors. A decision which was imposed to simplify its product development but if INTEL is unable to meet its market demand as it was in the late 1999 and early 2000 then it would cost more. The manufacturing of dell is done in the united state but about 70% of its procurement is completed in the Asia appeasing area. Between 1992 and 1997 dell condensed its figure of supplier by 75%, plus about fifteen of these are its key suppliers who provide 85% of its materials. In other to reduce its complexity of managing its supply chain, Dell is in conjunction with these contractors in multiyear preparation as well as negotiating.

Customer comment

Market insight

Extremely crisp product life cycle evolution

Capability to manage costs on a actual basis

Dell toiled at length to create an helpful supplier running function in command to cut down module guide times and uphold unconditional excellence standards necessary by the procedure.

Objectives of Dell’s Strategic Plan:

Swot Analysis:

SWOT analysis which is part of strategic planning is used to determine the strength, weakness, opportunities and threats involved with Dell. This analysis identifies and specifies the issues which are positive or negative to dells business objectives. First the strength of the company which is been used to achieve the objects of dell, then weakness which includes factors affecting the business ,and then opportunities which will aid the achievement of these objectives, finally threat includes environmental or external factors which affect performance. The process of identifying these swat analysis is very important for businesses such as dell as it involves steps involved for achievements of objectives and development. Strength and Weakness relate to matters concerning the following resources: sales of a product, operations efficiency, product services, and cost productivity.


Dell is the World’s biggest PC creator their products are one of the best globally, by providing customers with the best effective way to meet their needs. Dells proficiency is their cost strategy. They sell their products directly to customers thereby reducing consolatory.


New product market on corporate clients.

The company gets their suppliers from other countries that can cause the company some embarrassment. In the year 2004 Dell had to recall 4.4 million laptop adapters because of a fear that they could overheat, causing electric shocks or fires.


Bringing new products to the marketplace at an affordable price. Also introducing new products such as printers and also non-computing goods.

Dell is selling low cost products to retailers in the United States of America. They rebrand for other companies gives the company new market segments.


The competitors of computer companies pose a big threat in the market place world wide. rivals such as Acer and HP deduce the growth of the company. Dell gets product components from far regions like India where the work cost are really cheap, but this information is available to competitors, so they can apply the same process.

Also as Dell been a global company, it is open to instability in the global exchange market. Variation in currency rate could leave the company exposed to possible loss in part of its supply chain. Technology changes is also a treat because of advancement of technology in the economy

Monitoring the Strategy

The help of digital nervous system nevertheless the CEO might find out what is going on the tactic front and on all other sides. This is one of the major strategic problems, can you supervise tactics and their results at any time they want or anywhere you want. The solution cannot be positive unless the nervous system is widely spread giving optimistic answers to a dozen other significant questions.

1. Has e-mail developed into the main internal message system?

2. Is it possible to get trade data information on-line?

3. Do they use PCs for trade study?

4. Do individual use the digital system to get rid of paper and official procedure?

5. Have you improved procedures to abolish single-task work for multi-functional tasks?

6. Does monitoring the system improve excellence and competence?

7. Do customers have feedback on-line?

8. Clients association are they put up into the system?

9. Do you converse by means of the digital system with all contractors and associates with the endeavour of restricting cycle times and hastening processes?

10. Is the middleman eradicated, replacing of deliverables?

Getting right and accurate answers from the questions above has so many advantages and having wrong answers minimizes the company’s efficiency. It requires no knowledge of technology and business awareness. The right answers underpin the efficiency of the strategic plan.

Distribution Planning Strategy

Demand planning includes push and pull system, understanding the customers demand on cost matters, positioning of goods at appropriate distribution centres all this to reduce working the working capital, a key to control inbound logistics with contractors and agreed maker. containing the fraction it requires at the accurate time to gather a pc, dell needs contractors to embrace record in store in a 15-30minute compel of its plant. Dell then notifies the warehouse when components have to be stocked up and they are taken to the plant, where they are towed off the truck according to their requirement. Dell prepares mechanism awaiting customers instruction (push) and it decides on the capability of gathering plants on customer order starting point (pull), it needs demand forecasting for these two issues. Both pull and push methods require future demand of customers.

Customer order and manufacturing cycle

Push and pull of Dell’s supply chain.

Procurement cycle

Pull processes

Push processes

Customer order arrives

Supply chain strategy of dell:

Supply chain management is becoming significant in this day trading globe. In addition in today’s supply chains there is perpendicular breakdown of manufacture, signifying that businesses are liable to focus on their core capability and subcontract their logistics and less important procedures just to keep capital. Delay is a common run through, where there is a setback in result construction and particularly in developing of a produce, ensuing in improved forecasts about the end manufactured goods requirement over time

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Michael Dell’s calculated selection and his efficient method of understanding them have taken part in an important role in Dell’s victory tale. The major constituent of his winning company model of the corporation is its supply chain management; for this reason, a lot of theorists of Supply Chain Management tried to examine Dell’s SC approach, and quite a lot of businesses have tried to “duplicate” the business model, without accomplishing it yet. This detail illustrates the difficulty of Dell’s SC tactic and its exceptional method of positioning it to training. The important fundamentals of Dell’s business form are its direct sales model, built-to-order and supplier integration.

A supply chain is made up of all parts concerned, in satisfying a client demand . In other words, a supply chain (SC) includes all organizations that collaborate in order to produce and deliver a finished product to the final customer, as well as the customer himself. Supply chains may be dissimilar in dimension, difficulty of dealings among the members and sharing of material existence.

The supply chain of Dell includes:

The client

Dell’s website

Dell’s gathering plant

Dell’s dealers.

Supply chain reaction:

React to broad variety of quantities demanded

Attempt to meet short lead times

Handle a wide variety of goods

construct high inventive goods

Handle delivery doubt

Responsiveness of the supply chain implementation




High Low

Separate from the direct model and build-to-order supply chain scheme, forecasters have treated with previous matters which will add to Dell’s accomplishment. point out, Dell’s undisclosed formula relating to its supply chain is “suitable combination of procedure and individuals fundamentals” from Michael Dell’s statements that “our R&D centre of attention on procedure and excellence development in developing” and “one of our main confrontation is looking for directors who can split and act in response to quick changes” .The solution of supply chains is individuals, because they introduce the Supply chain into existence

Support the Supply Chain Strategy with the Business Strategy

Generally businesses build up a SC plan later than when business strategy has already

been definite. At the same time as this advancement can distribute some worth, it does not maintain the combination into the business strategy enlargement of very prevailing SC model choices; this possibly will considerably advance the business strategy.

The supply chain strategy has to at all times sustain the objective of the business strategy


Companies who are capable of putting into practice valuable forecasting methods and the capability of using this distinctive technique makes a will be at a greater advantage over competitors. A range of forecasting models to select from, Dells uses forecasting method to make decisions and plans about its future. Future researchers examine and identify the best alternative future features. It makes it possible for people to alter or be prepared for what’s ahead of them in the future. No matter the type of forecasting we apply, there will be an issue about uncertainty and blind spots will occur. Dell uses long term forecasting method which is usually less precise than short term methods. The future is however filled with doubt. Information of the past makes available the raw materials from which the brain then constructs ideas of the future. The accuracy of dells forecast was between 70 to 75 percent due to its accurate account selection. Whenever there is an uncertainty in the company dell manager raises the forecast on high-end products because it is way better and much easier to sell up and high-end had a more extensive shelf life.

Demand Forecasting Methods

At the moment job environment gives professionals the face up to meeting the clients request instantly. Demand and Lead times are the most fearful numbers for many SCM professionals as they pose to stay elusive. This route gives you the environment of Demand and supply management, a variety of procedure as well as constituent of cost, procedures to put together, estimate and purify data and the statistical proficiency to apply different forecast models to maintain your company

Steps of forecasting methods include the following:

• Choose on the type of forecast

• Decide on the things to be forecast

• Decide the period prospect of the forecast

•Past demand for products

• Current state of the economy

• Collect the forecast information

• put together the estimation

• validate and apply findings

Benefits of Forecasting

-Enhance client’s contentment

-Decrease stock-outs

-Programme inventions more resourcefully

-Subordinate security stock needs

-Decrease produce obsolescence expenses

-Supervise delivery improvement

-Improve pricing and promotion management

-Settle better-quality conditions with contractor

Difficulties in using Forecasting Technology:

The rate at which the advancement of technology is growing makes it impossible to fully predict technology characteristics. Sometimes when the truth is staring right as us, we find it hard to accept it due to repercussion which may take place after. It takes guts and nerve to accept this allegation of the judgment .Nevertheless opposition to change is a normal human feature, it is tremendously tricky to endeavour ahead of our autonomy of approval in forecasting innovative technologies.

The Future of Dell

Dell continuously processes its business scheme, by ingoing into new marketplaces such as electronics so as to raise profits. The business has placed insistent income objectives approximately twice the received income at the moment. To assemble these objective, altering trading surroundings and the business usually changes’ its supply chain strategy.

This is not only to make sure that the supply chain is strategy aligned with the business strategy, but also to keep ahead of the competition. According to CEO Rollins, Dell “directs the important series in a more enhanced way than someone’s else on the globe; the single one close to us may be Wal-Mart.”


In the late 1980s companies in the United States began to concentrate on their core competencies. This started a move to outsource functions that weren’t related to a company’s main line of business. Outsourcing business has grown manifolds and the present market is estimated to be around US$ 500 billion (M. Lacity, 2002). Outsourcing phenomena has caught the interest of academicians too and the academic researchers have analyzed this phenomenon in various perspectives. As an offshoot of this IT outsourcing, companies in the late eighties started to experiment with offshore sourcing to varying extent. Research has also been done in the overseas outsourcing of IT work to a limited extent. There has been a great deal of interest in the trade publications on off shoring than in the academic publications, for reasons such as adverse skill availability, cost savings and quality.

Dell doesn’t have significant amount of resources tied up in physical facilities dedicated to wining the first to market battle

For each consecutive invention of techno


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