Planning and Control Assignment related to Dell Inc


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Planning and Control Assignment related to Dell Inc

  1. 1. WA303 Assignmnet Planning and Control 1
  2. 2. Table of Contents Topic 1. Introduction 2. Dell Company Background 3. Dell's Environment PEST Analysis SWOT Analysis 4. Importance of Dell to monitor and adapt to the changing environment 5. 6. 7. 8. Relevant Marketing Strategy Further Examples of Strategies of Dell building marketing strategies because of the changing environment Conclusion References 2 Pg no 4 5 6 9 11 11 12 13
  3. 3. Introduction: Why it is important to continuously monitor and adapt to the environment in order to identify opportunities, threats and to build a relevant marketing strategy for Dell. 3
  4. 4. Dell company background Dell is an American multinational information technology corporation that develops, sells and supports computer and related products and services. It was founded in 1984 by Michael Dell. It is a public limited company that sells its shares on the stock exchange i.e. about 3.5 million shares of company stock. Dell is also one of the leading sellers of computer goods worldwide that has captured more than 15 % of market share globally. Their product line includes of desktops, servers, laptops, peripherals and workstations. Some of Dell's largest competitors existing in the market are Sony, Hewlett Packard, Toshiba, Asus, Apple, Acer etc. Objectives of Dell: To make sure that:    The products that Dell produces meet its customer's standards. The response time of inquiries and requirements should meet the needs of customers. The company should always maintain sufficient profits. Mission of Dell: To be the most successful computer company in the world by delivering the best customer experience to the markets served by Dell by meeting customer expectations of: highest quality, leading technology, competitive pricing, individual and company accountability, best-in-class service and support, flexible customization capability, superior corporate citizenship and financial stability. (Reviewessay,2011) Vision of Dell: It's the way Dell:  Do business  Interact with the community  Interpret the world around us by knowing customers' needs, the future of technology, and the global business climate. Whatever alterations the future brings Dell's vision; it will always remain a guiding force in order to meet customer's satisfaction and to become the most successful computer company and that also requires the need of up-to-date technology and loyal customers.(Reviewessay,2011) 4
  5. 5. Dell's Environment It is made up of forces exterior of the boundaries which can make an impact. As the forces alter over time, they create either opportunities or threats. Businesses do not exist in isolation, but works with the whole environment in general. External Environment It is an environment that consists of all outside organizations and forces that have potential interests or which can impact the organization's ability to achieve its objectives. It consists of: PEST analysis The environment of Dell is affected by bodies that directly or indirectly affect the ability of an organization to get a preferred result, according to Kotler and Armstrong “marketing environment consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers” (Kotler & Armstrong, 2003). Therefore, it may generate both opportunities and threats for the manager. Political The political environment of the business is crucial in the operating of any business in order to achieve its strategic goals. It may include the government regulations or the legal issues under which the company operates. In politically unstable countries for a company like Dell, even if the company operates production facilities or export its products, they may have to take into account the restrictive policies as they help to protect local businesses and manufacturers that hinder foreign companies from entering the local market. But the computer industry sees more opportunities in countries with no restrictions and offering free trade like China. Economical The growth of economical environment is affected by the economic situations of the specific country, influencing the purchasing power of customers, causes fluctuations in exchange rates, interest rates or inflations rates which in turn affects the profitability of the business. Software piracy is a huge threat faced in China although they have many economic opportunities but they lack skilled labour, so the computer companies like Dell have to offer the Chinese consumers a low priced system. Social The social environment deals with society's attitudes and cultural values.The level of education is increasing, as more people are getting educated and also the demand for computers is increasing. Also, these days' children are getting prone to the use of the computers from a very young age which opens up opportunities for computer companies like Dell, illustrating that in the near future people will hardly live or work without using a computer. Therefore, this will allow Dell to increase its 5
  6. 6. brand image, increase purchasing power of the customer and allowing it to get easily adapted to the trend and the environment. Technological Introduction of information technology has changed the world into global village. The computer technology brings a lot of opportunities to for advancement in technology; it facilitates manufacturers like Dell to enjoy good quality and low cost advantage in order to offer innovative products at competitive prices. In China the government's key resource used to be allowing permission of access to technologies built by institutions but in the later years it was seen that China’s annual manufactured computers made millions and became the third largest in the world. It brought great opportunities for technological businesses like Dell to get their name into the public domain and also an efficient approach for customizing services according to customer segments but as the use of Internet was costly, it was a threat faced by Dell China. SWOT analysis It is a strategic tool that evaluates an organization's strengths or weaknesses (internal environment) and opportunities or threats (external environment) in order to assess and develop a plan for moving forward. Strengths: They are referred as the business's resources and capabilities which helps to gain competitive edge. E.g. of Dell strength : One of World's largest and well known computer making brand that offers their customers with products, services and support through multi channels like on site, telephone, internet etc. Weaknesses: They can be referred as the non existing strengths. E.g. of Dell weakness: As Dell build computers and not develop them so they highly rely on the suppliers which may cause great troubles in quality, manufacturing and services. Opportunities: According to the analysis of the firm's external environment, new opportunities for profit and growth may be created. 6
  7. 7. of Dell opportunities:      Using diversification strategy by introducing new products like printers, LCD television, security devices, softwares, broadband etc. Advancement and Improvement in technology to create new products, new market segments and to enhance the manufacturing process in order to decrease the overall cost of production. Keeping up with the rapid changing industry by continuously creating innovations in order to gain competitive edge. Backward and forward integration that may result into increased quality and service and lower cost. Keeping the leadership at low cost is also an important opportunity for the company. Threats: When changes to the external environment are made, a firm may face threats. of Dell Threats:       Existence of other competitors and new entrants in the computer market may make it harder for Dell to sustain its market share. Aggressive marketing done by competitors Rapidly changing technology Recession and change in exchange rate of other countries and change in government policies and regulations, tariffs etc can pose huge threats for the company. Due to the identical prices set by rival firms, the difference in price may no longer be an concern for the consumer and may switch to competitor's brand rather than waiting for customized computers offered by Dell. As the rate of growth in computer industry is falling down, so if today Dell owns huge market share, tomorrow if the demand falls then competition will become more intense and Dell will have to work harder to differentiate its products from the substitutes available in the market in order to keep holding a significant amount of market share. 7
  8. 8. Importance of Dell to monitor and adapt to the changing environment Dell's environment has become too complex due to increased globalization and therefore should be understood properly to run the business smoothly. It may refer the surroundings on which the business functions and the environment encompasses of political dimension and cultural and environmental aspect. The business should analyze the consequence of the dimensions and customs of getting adapted to the environment for the long term survival and always remain profitable. Dell's environment consists of all the external bodies that effect the operating of the business. The factors of business environment are mostly external and are beyond the control of individual industrial enterprises .Also; it can either pose a threat for the company or may offer huge opportunities for exploitation of the potential market. (rightwingpolitics,2011) A business like Dell adapts its environment for survival and its role in the society is crucial as it supplies goods and services, opens job opportunities and puts in for the economic growth of the country. It important that the business survives as its success alters to better economy and increases the standard of living of people in the society. Dell environment may consist of: Political, Economical, Social or Cultural, Technological, Legal, International or Organic factors. (rightwingpolitics,2011) All businesses are usually affected by its environment; it also affects the external forces. The environmental forces are dynamic; they keep varying along with the business. Dell may not be able to change its environment but among other businesses, it can mould the environment in its favor. (rightwingpolitics,2011) Dell may get benefitted in a number of ways after doing a through environmental study, which may consist of the development of broad strategies and long-term policies, developing action plans to deal with technology advancements, to foresee the impact of socio-economic changes at the national or international levels on the firm’s stability, analysis of competitor’s strategies and formulation of effective countermeasures and to keep oneself dynamic. (rightwingpolitics,2011) Also, it may be important to adapt to the changing environment to identify opportunities and threats in order to: Achieve Business Objectives If Dell gets adapted to its environment it can meet its organization's objectives. These objectives may include: profit maximization, growth, power, employee satisfaction, outstanding quality of products and services, increased market leadership, joy of creation and service to society. Improves process of making decisions It's vital to understand the way economy functions in order to improve the process of making decisions by Dell. This can be done by analyzing the economic environment, to see how it acts as an external constraint .Therefore, it requires understanding of the external environment to get adapted to the environment. Getting 8
  9. 9. adapted to the political environment will allow the organization to make decisions according to the current political environment and the organizations won't fail to comply with laws and regulation thus avoiding legal actions (e.g. losing company license). Product Development The products and services of Dell should be developed in line with the cultural environment in place, legal or political mandates as well as economic bindings. E.g. In technology industry such as of Dell, it's very important that the Dell computers in Middle-East should support the language Arabic and incase if the business wants t to update their products version, it should such type that is accepted culturally. Also, getting adapted to the political environment is essential for a product to get developed and the companies should develop products that are legally acceptable. Staff motivation Businesses usually prefer recruiting employees from the local market as they already understand the environment and may adapt to it quickly. The most important thing is cultural dimension, the managers should be able to understand cultures that govern the domestic people and then develop strategies that may suit best. The Managers should try to shape the skills of the employees to those that suit best to the business standards. Also, considering the political environment the managers should choose to motivate their workers in a way that does not go against the legal rules and regulations. Competition In order for a business to compete with other businesses it should first be able to understand the environment and then get adapted to it, to ensure its long term survival in the market. Also, such firms can effect addressing of barriers to entry in the political environment. Business Growth and Investment Proper investment and business growth refers to the essential features that help a business get adapted to its environment. In this case of foreign investors the economic environment plays a vital role to successfully discover business opportunities and to ensure growth. 9
  10. 10. Relevant Marketing Strategy It is a strategy that is designed to be relevant to current environment. It may help a firm to adapt to the environment when creating a marketing strategy. Few examples of relevant marketing strategy of Dell China that may bring opportunities or threats are: In China, the government promotes national Computer vendor to foreign companies. Also, there is a lot of red tape involved in securing government contracts and the government treats the domestic companies favorably. Due to the restriction on the use of internet by the Chinese government, the internet growth is another threat to Dell. There is high potential for the growth of internet in China, which gives a foreign company like Dell the opportunity to develop into a new market. A company like Dell should be aware that in Chinese culture, customers are yet unaware of card sales due to the vast cost of the computers so DELL should instead make investments in services like face to face or door to door to increase consumers' faith and trust in their company. Use of internet brings all companies an opportunity for publicity, and it is also a rapid way of tailoring services according to their customer's segments. A threat to Dell may arise in the technological segment as accessing internet in China is expensive. To increase the market share, Dell invested its capital into equipments that produces higher quantities of their products relatively at a lower operating cost and selling the products cheaper with lower profit margins to China, India, Vietnam and the other third world countries. Dell is getting famous in China and the key to its strategy is a domestically designed computer called SuMa and it hopes to take sales away from the home grown powerhouse. Already Dell has built its manufacturing plant in Xiamen, South Eastern coast of China in order to promote the next day delivery to other 400 cities which is one of the companies. Dell in China is planning to dispose the low priced entry level market and instead strengthen its position in the mid market. This change portrays that the company is confident about its position in the market and doesn't require competing with other local brands. Further examples of Dell building marketing strategies because of the changing environment  Dell reveals new business strategy for the technological environment, i.e. creating opportunities for the B2B internet related market in order to grasp the opportunity to build their internet capabilities and increase market share. The CEO of Dell, Michael Dell summarized the strategy by saying, "We are combing Dell's Internet expertise, and our unique ability to organize resources around distinct needs to create new Web-related capabilities. The Dell advantage is based on direct relationships, low cost, speed to market and ecommerce expertise as much as it is on Internet hardware, appliances and customers services and support." (Dell, 2000) Also the strategy included 'Service Provider Direct' a three tiered package of service, support and comarketing programs designed specifically to benefit ISPs, ASPs and Web hosting companies and the current program users include Exodus Communications Inc. , NaviSite Inc. and Corio Inc. 11
  11. 11.  Dell also reveals new business strategy for both the technological and the cultural environment by adding additional services like infrastructure computing, it’s a power app appliance servers that are designed for specific internet structure tasks like web serving, caching and load balancing. Therefore, as the consumers are more educated and aware of customer services they appreciate solutions of full range server and storage for the internet infrastructure buildings. Conclusion: Therefore, it's essential for Dell to monitor and get adapted to its environment in order to survive, identify opportunities and threats and to improve leadership skills i.e. the business supervisor can prevent from using improper tactics for a specific atmosphere which suits one or more atmospheres. PEST and SWOT analysis plays a major role in the process and helps an organization (Dell) to build relevant marketing strategies. In order to build good relevant marketing strategies, the managers should remain flexible and inclined to discover or join new spots. As the globalization is increasing and environment is getting complex the business should not be resistant to transform. 11
  12. 12. References Book: 1. Kotler, P., & Armstrong. (2003). Prinicples of Marketing. USA: Pearson. Websites: 2. Anton. (2011). Dell Pestle Analysis.[online].Available: [30th July 2011] 3. Reviewessay.(2011).Dell mission and vision statements.[online].Available: [24th july 2011] 4. rightwingpolitics.(2011).Adapting to business environment: Importance Analysis.[online].Available:[1st August 2011] 5. Bahsin.(2011).SWOT analysis of Dell.[online].Available:[31st July 2011] 6. Dell.(2000).Dell reveals new business strategy.[online].Available:[2nd August 2011] 12