The Company Dell Strategy Commerce Essay

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The company follows unique selling policy that is known as Dell Model-selling computers and other equipment directly to customer and build-to-order strategy thereby eliminating the intermediary margins and inventory costs.

Fast forwarded to the beginning of 2011. Dell sold over 1.1 million computers in India in 2010, and has a 15.3% market share. This beats HP, which sold around 1 million computers and has a 14.7% market share. Not only that, India is emerging as Dell's fastest growing market. The company reported year-on-year growth of 55% for the third quarter of 2010 - the highest for any Dell market.

What's interesting is how Dell manages to capture so much of the Indian market in so little time. HP has been established in India since 1989, so it was no easy feat. It also required a complete change of strategy for Dell.

Traditionally, Dell's strength has been in the versatility of its products. The company provides made to order laptops through its website. Customers can literally choose what features they want and configure their own laptops.  However, with the Indian consumer less likely to make purchases over the Internet, Dell vigorously set up distribution channels in India as well. Customers loved Dell's laptops, once they could see and feel them for themselves. Dell set up a factory in India, and delivered the products right to customers' doors based on demand. This contrasts with HP and other popular brand Lenovo, which both made products regardless of demand and stored them in warehouses.

Competition by Dell has forced HP to reconsider the products that it offers.  The company is now paying attention to what sells and what doesn't, rather than taking a "one size fits all" approach. It's adjusting its range of laptops to meet market demand. Meanwhile, Dell continues to innovate and offer consumers an even wider variety of products. These include smartphones,  tablets, printers, and the Vostro range of notebook computers that's been specifically designed for the Indian small business segment. And of course, the fact that Dell gives customers the ability to choose the color of their laptop helps makes it a top laptop brand in India too.

From its early beginnings, Dell operated as a pioneer in the "configure to order" approach to manufacturing-delivering individual PCs configured to customer specifications. In contrast, most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis.[57]

To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just-in-time(JIT) manufacturing approach, which minimizes inventory costs. Low inventory is another signature of the Dell business model-a critical consideration in an industry where components depreciate very rapidly.[58]

Technical support

Dell routes technical support queries according to component-type and to the level of support purchased:[70]

Basic support provides business-hours telephone support and next business-day on-site support/ Return-to-Base, or Collect and Return Services (based on contracts purchased at point of sale)

Dell ProSupport provides 24x7x365 telephone and online support, a selection of 4 or 6-hour onsite support after telephone-based troubleshooting, and a Mission Critical option with two-hour onsite support, for customers who choose the highest level of support for their most critical hardware assets.[71]

Dell's Consumer division offers 24x7 phone based and online troubleshooting in certain markets such as the United States and Canada. In 2008 Dell redesigned services-and-support for businesses with "Dell ProSupport", offering customers more options to adapt services to fit their needs. Rather than take a one-size-fits-all approach, Dell allows various options for its customers.

In addition, the company provides protection services, advisory services, multivendor hardware support, "how-to" support for software applications, collaborative support with many third-party vendors, and online parts and labor dispatching for customers who diagnose and troubleshoot their hardware. Dell also provides Dell ProSupport customers access to a crisis-center to handle major outages, or problems caused by natural disasters.[72] Dell also provide on-line support by using the computer's service-tag that provides full list of the hardware elements installed originally, purchase date and provides the latest upgrades for the original hardware drivers.

[edit]Commercial aspects

http://www.youtube.com/watch?v=8BsWijdM0W0 Ken Curtis (THE DELL DUDE) Advertisment

http://bencurtisactor.com/wp-content/uploads/2012/07/dipolma.jpg

http://www.youtube.com/watch?v=mLcXVtk8nD8 (DELL BMW-a-day GIVEAWAY)

http://www.youtube.com/watch?v=Spa_l_12cIw (All I want for Christmas)

Marketing

Dell advertisements have appeared in several types of media including television, the Internet, magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies include lowering prices at all times of the year, offering free bonus products (such as Dell printers), and offering free shipping in order to encourage more sales and to stave off competitors. In 2006, Dell cut its prices in an effort to maintain its 19.2% market share. However, this also cut profit-margins by more than half, from 8.7 to 4.3 percent. To maintain its low prices, Dell continues to accept most purchases of its products via the Internet and through the telephone network, and to move its customer-care division to India and El Salvador.[73]

A popular United States television and print ad campaign in the early 2000s featured the actor Ben Curtis playing the part of "Steven", a lightly mischievous blond-haired youth who came to the assistance of bereft computer purchasers. Each television advertisement usually ended with Steven's catch-phrase: "Dude, you're gettin' a Dell!"

A subsequent advertising campaign featured interns at Dell headquarters (with Curtis' character appearing in a small cameo at the end of one of the first commercials in this particular campaign).

A Dell advertising campaign for the XPS line of gaming computers featured in print in the September 2006 issue of Wired. It used as a tagline the common term in Internet and gamerslang: "FTW", meaning "For The Win". However, Dell Inc. soon[when?] dropped the campaign.

In the first-person shooter game F.E.A.R. Extraction Point, several computers visible on desks within the game have recognizable Dell XPS model characteristics, sometimes even including the Dell logo on the monitors.

In 2007, Dell switched advertising agencies in the US from BBDO to Working Mother Media. In July 2007, Dell released new advertising created by Working Mother to support the Inspiron and XPS lines. The ads featured music from the Flaming Lips and Devo who re-formed especially to record the song in the ad "Work it Out". Also in 2007, Dell began using the slogan "Yours is here" to say that it customizes computers to fit customers' requirements

http://images.ookaboo.com/photo/m/Dell_wiki_m.jpg http://www.geekyblog.net/images/dell-design-studio1.jpg

Retail

Dell first opened their retail stores in India

In the fall of 2007, Dell announced partnerships with major computer retailers, including Wal-Mart, Best Buy and Officeworks. These partnerships ended Dell's historical reliance on the direct-to-consumer channel and allowed the company to access the mass merchandise distribution channel, which is an enormous potential business opportunity for the company. Dell continued its direct-to-consumer marketing initiatives but also sought to promote its new partnerships in television and print advertising, often in conjunction with its retail partners. In doing so, Dell has begun to compete more heavily on price, as retailers such as Wal-Mart are known as low-price shopping destinations for all types of goods. Recently, Dell's marketing efforts have been less focused on product features and customizability and more focused on low price as the defining feature of Dell computers.

Environmental record

Dell committed to reduce greenhouse gas emissions from its global activities by 40% by 2015, with 2008 fiscal year as the baseline year.[86] It is listed in Greenpeace's Guide to Greener Electronics that scores leading electronics manufacturers according to their policies on sustainability, climate and energy and how green their products are. In November 2011, Dell ranked 2nd out of 15 listed electronics makers (increasing its score to 5.1 from 4.9, which it gained in the previous ranking from October 2010).[87]

Dell was the first company to publicly state a timeline for the elimination of toxic polyvinyl chloride (PVC) and brominated flame retardants (BFRs), which it planned to phase out by the end of 2009. It revised this commitment and now aims to remove these toxics by the end of 2011 but only in its computing products.[88] In March 2010, Greenpeace activists protested at Dell offices in Bangalore, Amsterdam and Copenhagen calling for Dell's founder and CEO Michael Dell to 'drop the toxics' and claiming that Dell's aspiration to be 'the greenest technology company on the planet'[89] was 'hypocritical'.[90] Dell has launched its first products completely free of PVC and BFRs with the G-Series monitors (G2210 and G2410) in 2009.[91]

In its 2012 report on progress relating to conflict minerals, the Enough Project rated Dell the eighth highest of 24 consumer electronics companies.[92]

[edit]Green initiatives

Dell became the first company in the information technology industry to establish a product-recycling goal (in 2004) and completed the implementation of its global consumer recycling-program in 2006.[93] On February 6, 2007, the National Recycling Coalition awarded Dell its "Recycling Works" award for efforts to promote producer responsibility.[94] On July 19, 2007, Dell announced that it had exceeded targets in working to achieve a multi-year goal of recovering 275 million pounds of computer equipment by 2009.[95] The company reported the recovery of 78 million pounds (nearly 40,000 tons) of IT equipment from customers in 2006, a 93-percent increase over 2005; and 12.4% of the equipment Dell sold seven years earlier.[96]

On June 5, 2007 Dell set a goal of becoming the greenest technology company on Earth for the long term. The company launched a zero-carbon initiative that includes:

reducing Dell's carbon intensity by 15 percent by 2012

requiring primary suppliers to report carbon emissions data during quarterly business reviews

partnering with customers to build the "greenest PC on the planet"

expanding the company's carbon-offsetting program, "Plant a Tree for Me".

The company introduced the term "The Re-Generation" during a round table in London commemorating 2007 World Environment Day. "The Re-Generation" refers to people of all ages throughout the world who want to "make a difference" in improving the world's environment. Dell also talked about plans to take the lead in setting an environmental standard for the "technology industry" and maintaining that leadership in the future.

Dell reports its environmental performance in an annual Corporate Social Responsibility (CSR) Report that follows the Global Reporting Initiative (GRI) protocol. Dell's 2008 CSR report ranked as "Application Level B" as "checked by GRI".[97]

The company aims to reduce its external environmental impact through energy-efficient evolution of products, and also reduce its direct operational impact through energy-efficiency programmes. Internal energy-efficiency programmes reportedly save the company more than $3 million annually in energy-cost savings.[98] The largest component of the company's internal energy-efficiency savings comes through PC power management: the company expects to save $1.8 million in energy costs through using specialised energy-management software on a network of 50,000 PCs.[99][100]

SEGMENTATION

The corporation markets specific brand names to different market segments.

Its Business/Corporate class represent brands where the company advertising emphasizes long life-cycles, reliability, and serviceability. Such brands include:

Dell Vostro

Dell Vostro is a line of computers from Dell aimed at the small business market. The current lineup of Vostro laptops includes five laptops, including two budget models, the A90 and A860, and the mid-level Vostro 3000 series. Higher-end models are the 1220, 1320, 1520, and 1720.

Dell Latitude

Latitude is Dell's business laptop brand. The Dell Latitude is targeted for business use. This means that standardized parts are used throughout the line and are available for several years for support purposes. By contrast, theDell Inspiron is aimed at the consumer market and its specifications change regularly. Latitude computers are also differentiated in their feature sets, due to their business focus. For example, they often include security features such as smartcard and contactless smartcard, and TPM security, which are not needed by most consumers. A lid clasp (as opposed to a magnetic latching system), DisplayPort video out (as opposed to HDMI), and support for legacy standards are all results of the requirements of the business market.

Some models also have the capability of Latitude ON which can be selected during the configuration of the laptop. Latitude ON is essentially a system within a system. It requires a separate add on module which contains its own microprocessor and Operating system. This allows the laptop to function in the realm of a Netbook.

The primary competitors to the Latitude series are the Lenovo Thinkpad line and the HP Elitebook line, both of which offer similar business oriented features and durability of the Latitude line.

Dell's Home Office/Consumer class emphasizes value, performance, and expandability. These brands include:

Dell Inspiron (budget desktop and notebook computers)

the Inspiron line mainly consists of mid-level computer systems.

Studio (mainstream desktop and laptop computers)

Dell's Studio brand is a range of laptops and desktops targeted at the mainstream consumer market.[1] The computers sit above Dell's Inspironand below the XPS consumer lines in price and specifications. They differ from Dell's lower-end Inspiron models by offering slot-loading optical drives, media keys, more cover design options, faster processor options, HDMI and eSATA ports, LED-backlit screens, and backlit keyboards.

At launch, the Studio was offered in three models: the Studio 15 and the Studio 17 named after their respective screen size in inches, and the Studio Hybrid, named for its usage of laptop components in the form of an ultra small form factor desktop

XPS (high-end desktop and notebook computers)

Dell XPS (Xtreme Performance System) is a line of gaming and performance computers manufactured by Dell.

Adamo (high-end luxury laptop)

 Dell subnotebook focused on design and mobility. Dell also claimed it is the "world's thinnest laptop", at 0.65 inches thick.[7] It is a slim luxury ultraportable intended to compete with Apple's MacBook Air, Lenovo's ThinkPad X301, or HP's Voodoo Envy 133 laptop

Results from a survey on Laptop usage trends

Dell

Apple

Others

SWOT ANALYSIS

Strengths

World's largest PC maker. Among the best known brands throughout the world.

Dell uses Customer Relationship management (CRM) and information technology approaches to gather the data for its loyal customers. So, a customer can select a basic PC model, add desired items and upgrades until the PC is fully kitted to consumer's own specification.

Consumers can even keep a track of delivery by contracting customer services that are based in India.

Cuts heavily on operating cost by cutting out the retailer and supplying directly to the customers.

As a last step, the finished goods are then dropped off to the customers by trusted courier services. Dell has the total command of the supply.

Weakness

A product recall is extremely difficult. In 2004, Dell recalled 4.4 million laptop adaptors because of a threat that they get heated up and can cause electric shocks and fires.

Dell is hugely reliant on a few large suppliers since it is just a computer maker and not a computer manufacturer. This causes it to get locked in for periods of time and is unable to switch supply due to supplies.

Dell's sales revenue from educational institutes is only 5% of the total clearing stating that it has not been able to attract college students.

Customization has created complexity for some customers. Customers just can't buy Dell as simply as any other brand because each product is customer-built according to user's specification. This may take days before the product is ready.

Opportunities

Dell has been able to make its mark into the Indian industry. Growing at a current rate of xx%, it has become the largest PC provider in India.

Dell is increasing its risk taking abilities by pursuing a diversification strategy. It has introduced many new products into its range such as printers, LCD televisions, toners and other non-computing goods.

Threats

New entrants keep entrants keep entering into the market. The competitive rivalry exists in the PC market nationally and internationally.

Price gap among brands is shrinking every passing day.

With increasing middle class per capita income, Dell's consumer base is increasing as its direct model saves c

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