Dell Identify and Evaluate Marketing Opportunities Essay

The most critical shifts in Dell’s contextual factors, including industry dynamics, trends, technology changes and shift of the competitive landscape are following: The industry has changed significantly over the last 20 years. The traditional business model in the PC industry was inside-out, supplying machines based on orders from distribution, resell and retail channels, thus following the indirect selling concept. Dell’s direct model was at this time a new, challenging concept, taking orders directly from the end-consumer, and thereby, eliminating the middleman, costs and time. This was the initial crucial shift away from the traditional schema, allowing Dell’s quick

Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use.

Dell. Dell’s products—computers, servers and printers—are commodities. Dell tends not to develop the technologies underlying these products. Instead, it purchases the components from firms that develop the technologies (semiconductors and computer software). Dell’s direct-to-customer marketing strategy is not unique, but the extent to which Dell performs this strategy better than anyone else in the industry gives it a competitive advantage. Its size, purchasing power, quality control, and efficiency permit it to operate as a low-cost provider.

The advantages of Dells model are: The internet allows Dell an extensive scope and reach for its products at a relatively low price (Dedrick and Kraemer 2001). Using the internet Dell has been able to automate many of its business functions, such as product configuration, order entry and technical support (Dedrick & Kraemer 2001), therefore the company can achieve higher revenues without customer service costs increasing greatly. Online configuration ensures that the customer gets exactly what they want. Dells build to order strategy means that inventory levels are low, they only hold approximately 4-8 days of stock, therefore inventory costs are low (Breen 2004).

Compared to its rivals, Dell has a low market share in the international Market. This is a weakness because international diversification is very important. Since most of Dell's revenues come from the US market, having a low market share in the international market is more risky.

Dell is a multi-national information technology corporation which designs, develops, manufactures, markets, sells, and supports a range of computer systems and services that are customized to individual customer requirements. As one of global PC suppliers, Dell set 2 strategic objectives to achieve, to be the No.1 global market share PC supplier, and optimize the balance of liquidity, profitability, and growth with a focus on increasing the mix of their product portfolio to higher margin products and recurring revenue streams. (Dell annual report 2009, pg 4). Dell existed in one of the biggest

Dell is a leading computer technology organization. Dell constantly keeps up with changes in their market to stay competitive. Dell is focusing on cost from issues of storage to transportation of products.

Dell is a software company that started off with changing up the buying aspects of a computer. Dell would personally customize

Threats-Increasingly popular brand names in the competition.-Strong relationships that are held between competition and the retailers.Competition can basically create the same computers since Dell builds computers, not designs them.Weaknesses- Dealing with a large amount of supplies from many different countries can cause a large issue when products are recalled.-They build computers, not develop them.

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Affordability of latest technology through Direct Sales Services - Dells uses direct customer relationship or as it calls it “customer intimacy” as its distribution strategy. This means meeting customer needs directly and cutting middleman interference as much as possible. This is done either through dedicated sales representatives, telephone based sales and online at www.dell.com. As a result, the purchase price would be lower than other competitors.

In addition Dell’s reliance on suppliers also creates risk and uncertainties. “Reliance on suppliers, as well as industry supply conditions, generally involves several risks, including the possibility of defective parts (which can adversely affect the reliability and reputation of Dell’s products), a shortage of components and reduced control over delivery schedules (which can adversely affect Dell’s manufacturing efficiencies), and increases in component costs (which can adversely affect Dell’s profitability).” (Form10-K 2005 p9)

Because of these views DELL has the competitive advantage over others because of many reasons. The level of inventory costs is really low since the case of fastest reply to demand changes, it is also observable that customer pays for an order before DELL pays its supplier for the products components.

Thus, the centerpiece of Dell Inc. 's current marketing strategy is direct marketing to the enduser.

Where previously Dells major concentration of about 80% was the Small office, home office sector (SOHO), that market has now been saturated with competitive pricing and different PC options. It would seem that business aren’t too particular about getting customized PCs anymore, rather they are now looking for the cheapest deal they can find with the finest technology to offer. As a matter of fact, domestic consumers now control the industry growth as their PC sales are double than that of businesses.