Where is Dell Vulnerable

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Brand Management
MKT 511

Submitted To
Mr. Mahmud Zubayer Course Instructor Department of Business Administration East West University

Submitted By
Md. Mizanul Haque Md. Samiul Alam Khan Sayed Ishtiaque Hossain Goutom Kumar Sikder ID No. 2008-2-95-077 ID No. 2008-2-95-111 ID No. 2009-1-95-020 ID No. 2009-1-95-044

Submission Date
October 31, 2009

Question 1: What have been the key success factors for Dell?

Answer: Dell, one of the leading computer system companies, has been tremendously successful for the past decade. The key success factors for this company is identified below Speed of delivery: Speed is one of the most important parts of the key success factor for Dell. Dell Global Services simplify the management of the IT environment so the people get up and running quickly, with lower deployment costs, fewer hassles, and less time spent on non-strategic tasks. It has to pay only for the services need, gain instant access to the latest innovations without additional infrastructure investment, and take the business from maintenance to momentum. Quality customer Services: As part of the service option, Dell services provide practical, executable plans to help to gain clear insight into what is driving the IT complexity. Dell’s fully configurable support offering, featuring a modular suite of professional support services, designed to address the unique set of technology. Database solution: Business database is the backbone of the business operation. Without a reliable and scalable database platform the enterprise may not be prepared for the spikes in demand future business. Product customization for business and consumer customers and 24 hour order entry system: Through the use of Premier Dell.com, customized customer Web pages at the dell site, the company has created a 24 hour order entry system. Big customers can click on the site to see all kinds of information about their preferences and needs. The site can be accessed worldwide by any company subsidiary, and employees, not just purchasing agents, can use the Premier Dell.com to purchase computer according to automated policy.

Build to order system: Dell computers are build-to-order; it carries an industry-leading four days of inventory. It takes delivery of components just minutes before they are needed. AT its Austin, Texas, factories a Dell system can in some cases is built, have the software installed, be tested, and be packed in eight hours. Building relationship: Like most of the successful companies, Dell put the most resources into building relationship with the most profitable customers. Competitive prices: Dell provides the most competitive prices to their customers to provide the best they can get at the same price from other providers. This is only possible by the JIT approach of Dell because by this method they can minimize there cost at the lowest point possible. Superior relationships with suppliers: Dell have built a superior relationship with its suppliers so that it helps Dell on maintaining there JIT approach in a tight schedule – an industry leading four days of inventory. Excellent cost structure: Dell has built up an excellent cost structure by following the JIT approach with harmonizing and balancing build-to-order and build-to-stock system. For this reasons Dell has been so successful for the past decade. Dell should maintain this performance and key success factors intact to conquer the future.

Question 2: Where is Dell vulnerable? What should it watch out for?

Answer: In our opinion, Dell is most vulnerable in the following sections. If they do not take any preventive mechanism, they can suffer from a severe disaster for the following reasons. They should watch out for Vulnerability to competitive marketing actions and crisis: Dell is vulnerable to competitive marketing actions from both the existing competitors and the new entrants. The main reason behind this is the market consists of relatively low market share of the total market. So there are plenty to explore and this can allure the corporate giants and other market forces from other industries to invest huge in this sector to grab a position in this market. Threat of New Entrants: The explosive growth in personal computers in the late 1990s attracted new entrants to the market. In addition, the participants, drawn by projected growth rates further stimulated the market with dramatic price cuts. However, the computer hardware industry has been in a consolidation phase for a number of years. Threat of Substitutes: The threat of substitutes is low in the computer hardware industry. Consumers only have two choices for PCs or laptops. However, the cost of switching between the two systems is significant, thereby making it unlikely that customers will substitute one for the other. Intensity of Competition: The number of competitors in the PC and laptop markets is relatively low; nevertheless, the level of competition is exceptionally high. In the PC market, the largest vendors are IBM (although its PC business is now owned by Lenovo), Sun Microsystems, HP, and Dell. Smaller vendors include Gateway and Toshiba. So it is very hard for Dell to maintain its position in this tight competitive situation.

Larger margins: Dell has to maintain larger margins than previous to maintain a healthy atmosphere of its existing business. For this purpose the company must generate innovative ideas and constant value building towards all the group of consumers both corporate and retail. Marketing communication effectiveness: Dell has a good marketing communication with its suppliers and customers. But Dell should try to build more effective marketing communication mix so that it can surpass its competitors. So to prevent harsh and harmful events for the company, Dell should take proper precautions to avert disaster.

Question 3: What recommendations would you make to senior marketing executives going forward? What should they be sure to do with its marketing?

Answer: Our recommendations towards the senior marketing executives to go forward are given below – Focus on innovation Dell should focus on innovation. In many cases, companies that do their own R&D are able to stay ahead of the industry through the development of new products. Putting more emphasis on R&D has some potential benefits. Through increased R&D spending, Dell may be the first to introduce products to market and establish first mover advantage. Dell's recognizable brandname would allow it to expand into new products and potentially create insurmountable barriers to entry for its competition. Currently Dell's strength is the sales of mature products through mass production, bringing quality and price without the cost of R&D. Divesting As is the nature of many larger companies, Dell is competing in several different product markets. Divesting products or services that the company is not competing near the top of the market will increase internal focus. The key benefit of this strategy is the improved focus on core business. Stripping away these segments would enable Dell to become more streamlined. Specifically, it would require all segments to work for similar customer bases. Establishing a singular customer focus to each employee allows Dell to leaps in product creativity and adds more than value to its brand. Strengthening differentiation advantage This strategy encourages Dell to return to its core competencies. It pushes the company to improve upon those competencies which helped differentiate it from the beginning. Specifically, improvements will include the enhancement of customer service, the addition of suppliers, new marketing campaigns, the modification of retail sales and the expansion of turn-key solutions. This strategy seeks to widen Dell's competitive advantage through the further refinement of its existing core competencies.

Japanese value building process Dell can follow the Japanese value building process such as zero customer feedback time, zero product improvement time, zero purchasing time, zero setup time, and zero defect. This will help to reinforce the value building process of Dell and eliminate any existing flaws. Thus Dell’s marketing executive can reinvigorate the existing excellence to excel further in the future.

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