Dell Direct: A Running Case with Real Data

Introduction

Dell is the leading global dealer in the PC business. Its market share experiences stiff competition from Hewlett-Packard, Apple, Acer, and Toshiba (Malhotra, 2010). The prevailing battle in PC’s market is not in computers but printers. The Purpose of this paper is to analyze Dell’s history in the computer business and its plan for expansion into the printers market, which is the prevailing battleground for the PC business.

Michael Dell founded Dell as a retail business for IBM’s disk drives and random access memory chips (Ibid). It expanded its business and in 1984 started manufacturing and selling IBM clones through retail outlets directly to consumers. Through direct sales to customers, dell would sell its PC’s at about 40% of the market price of IBM computers and products. Today, dell controls 29% of PC exports followed by Hewlett-Packard (26%), Apple (9%), Acer (9%), and Toshiba (6%), in that order. Other small dealers share 21 percent of the remaining market. The business model enhances customer support, product customization and, cost and time reduction. In spite of its market domination, Dell should align its identity with its image, in order to enhance sustenance of its business (Argenti, 2007).

Dell Computers and Data Preparation

Computer-assisted personal interviewing is a technique for data collection that uses a portable computer. It is a viable alternative of interviewing that reduces manual coding and editing, enables a fast speed delivery of raw data, and enhances data quality. The processes involved in computer-assisted personal interviewing data synchronization, importing date in snap software, appending data to the database, and data editing and coding. These are functions facilitated by the software diversity provided by Dell computer programs. Its devices are effective and efficient owing to the emphasis of technology. The use of enhanced technology facilitates fast and accurate data processing.

Presentation for Dell Management

Dell Computers is a global leader in the computer business (Malhotra, 2010). However, the manufacture and sale of printers is an emerging market for which Dell must strive to control. In this case, it must engage effective management of storage devices and server computers. In respect to the emerging trend, Dell introduced handheld computer, a line of Ethernet switches, and consumer electronics including digital music players, and LCD televisions.

The history of Dell Computers demonstrates key lessons. First, the foundation for value creation is knowledge of the customer. Second, the key to success in new markets is moving from the virtual to the physical world. The inverse creates barriers to entry. Third, innovation is pivotal to the maintenance of the velocity of progress. In relation to the customer service, Dell uses the direct-to-customer model of business. Dell reduces cost and time by eliminating resellers and retailers. In addition, it enhances Dell’s capacity for understanding the consumer, in terms of their expectations. The conventional value chain begins from suppliers to the manufacturer, to distribution channels, and to the customers. Dell’s value chain is shorter than the dominant model because it eliminates distribution channels. Its products move from suppliers to Dell and then to the customer.

However, the ideal value chain is the virtual integration model, which eliminates traditional roles and boundaries in the value chain. This is the current model that Dell uses to enhance customer support and product movement.

Recommendations

The key success factors for Dell are brand loyalty, brand equity, and product differentiation (Malhotra, 2010). The company is popular for its innovation in the supply chain management and electronic commerce. However, the changing trends in the PC business necessitate diversification in investment (Ibid). Dell should invest in diverse sources of income, in order to reduce costs and losses of due to product recalls and compensations due to misrepresented products. In addition, Dell Computers needs to align its identity with its identity. It is relying heavily on technology and innovation (Argenti, 2007). The overdependence on technology, together with the gap between identity and image, may cause complications for future business.

Conclusion

Dell’s successful business in PC business is inspirational to the current and prospective dealers in the computer business (Malhotra, 2010). Its direct-to-customer model of sales has several opportunities for business management. First, Dell conducts pricing of its services and products based on performance. Elimination of retailers and resellers coupled with efficiency in distribution, manufacturing, and procurement enable the company to offer to its customers richly configured and powerful systems for the money spent on purchases. Secondly, the model facilitates customization of products and services. Through Dell’s built-to-order system, customers get precisely what they want. Thirdly, Dell’s model promotes customer service and support. The company utilizes close contact with the customer to provide exceptional tailored customer service. Fourthly, the model uses the latest technology. The model requires efficiency implying that application of latest inventions is mandatory. It is easier and quicker to introduce new technology in Dell’s product lines than in the indirect distribution system characterized by slow movement of products and services. This keeps related costs low. Fifthly, Dell is an exemplary model because it provides a superior shareholder value.

References

Argenti, P. (2007). “Corporate Communication (4^th ed.)”. New York, NY: McGraw-Hill.

Malhotra, K. (2010). “Marketing Research: An Applied Orientation (6^th ed.). Upper Saddle River, NJ: Prentice Hall.

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