Dell is a company, whose main task is developing, manufacturing, selling, and supporting personal computers and other products that are related to the computers. This company is located in Texas and employs a total of 76500 people worldwide. In 1980s and 90s, it became the largest seller of personal computers and servers. It was in 2008 that Hewlett-Packard overtook it and became the second in computers sales. The products that are sold by Dell include personal computers, data storage devices, servers, software, network switches, and peripheral devices for computers. It has also been known for selling HDTVs, cameras, MP3 players, printers, and other devices that are normally built by other manufacturers.
Background
It was started in 1984 by Michael Dell while still a student at University of Texas at Austin. It started as a PCs Limited and started as a company for selling DELL PC-compatible computers that were built from stock components. The main aim of Dell was to sell computers directly to the people because of the belief that this could help him better understand the needs of the clients and provide more products according to the needs of the clients. He could then provide the most cost-effective solutions to his clients.
It was not until the year 1985 that the company produced its first computer which was made on its own design, the Turbo PC with a speed of 8 MHz the idea of selling these computers directly to the people that made this company to rise above scales to be the best computer sale computer and gained popularity from the national magazines which made it further to sell more computers. It changed its name to Dell Computer Corporation in 1988 (Ogg, 2009). From then Dell started making fast revolutions including the sell of its products on the Internet in 1996. It used its website to sell computers. In the year 2002, Dell expanded into the home entertainment sector where it tried selling television and handheld devices. In 2003, it changed its name to Dell Inc. to take care of the other non-computer products that Dell had started selling. The rest, as they say, is history.
Dells service concept
One of Dells service concepts is that of having direct contact with her clients. From the start of their operations nearly three decades ago, one of the service concepts of Dell has been to have a close relationship with the clients. This, they believe, will give them a chance to understand what the customer needs. Understanding the needs from direct contact with the customer is very important. This has leveraged Dell to sell more products than any computer hardware company in the world.
Dell value three golden rules that are very clear with every employee and partner of Dell. These rules include disdain inventory, always listen to the customer, and never sell directly. Disdain inventory is valued so that all customers are treated right without any despise of any. Even small clients are treated with utmost respect and understanding. Dell also strives to always listen to the customer (Business Review Weekly, vol. 21). All their decisions are based on thorough research done to find out what the client requires needs and will strive to provide exactly that. The last golden rule is that of not selling indirectly. They feel that this will deprive them an opportunity to learn more of their clients. Dell sell directly, a service concept which has made them grow leaps and bounds to be one of the most respected companies in the computer industry. It is not so much the quality of their products but the proximity they have with their clients. Most of the progress that this company has had is from their good understanding of their clients and meeting their requirements.
Dell focus on the best solution, not the best technology
Dell understands what they are and what they are not. They focus much on the solution required by the customer and not the technology (Chaffey, 2007). They have this clearly defined so that they focus on integrating many parameters to bring about customer satisfaction. They insist that they are not the superb product integrator but that they are superbly a good sales-and-logistics company. They also claim that they are not the developers of innovative technology. The management believes that todays technology is tomorrows commodity. When a technology is out, what Dell does is to wait for that technology to reduce in cost so that they buy it and convert it into a computer at state-of-the-art factories and then sell them at comparatively cheaper prices thus gaining preference from many clients. It is dangerous if everyone in the company start thinking the same way.
Dell Porters Five Model
Using this analysis, it means that for cases where there is a high barrier built to protect the industries which are already in the market, this will mean that it will be an uphill task for new entrants to penetrate into the market (Aaker, 2004). This will make possible for few industries to dominate the market. the threat for new entrants in computer hardware is very moderate. Currently, what is needed to start independent stores is low capital investment which poses a good opportunity for competition and entry possibility of new industries. In the industry of computer hardware, there is notable product differentiation where customers are loyal to a particular brand. This is a barrier to new entrants to the market. it is worth noting that customers loyalty can be lost too. There are some governments regulations which have made to have their own copyrights like the software this poses a high barrier for new entrants.
Dells use of Information Technology
Dell uses IT to boost operating practices, from customers, to suppliers and outbound distribution. It use Information Technology to refine its business model where it has developed performance metrics that they use for production operation analysis, balance inventory between suppliers and customers, manage collection of cash, market the profitability of operations, return on invested capital and getting the value of the market share. The table that is shown below illustrates how Dell uses Information Technology to leverage its operations in the market.
It also uses IT to improve on its relationship with the wider world where it gives Dell virtual integration reality throughout the whole chain of supply. Suppliers are now able to have real-time inventory control from Dell by use of Dell Information Systems. This enables them to have a one-on-one close relationship with Dell.
Dell also uses IT to manage business operations. There are advanced systems that are used to perform some of the operations. Dell uses Dell Order Management System (DOMS) where a sales representatives logs into the systems and places an order. The order is then directed to the engineering department where is checked if all the details are filled in the online form. If everything is filled, the order is then printed and the process of ordering the product begins.
All in all, Dell has leveraged itself with the use of Information technology where they have managed to stay ahead in the competition. With this trend, they are here to stay.
Future of Dell
The future of Dell is challenging. The company is to improve on customer service as the paradigm of future leverage in this industry is more on the satisfaction of the customers more than providing the right solutions (Verma, 2007). Going by the current trends in Dell and the computer industry at large, Dell has already cut a niche in the market and it is there to stay.
Background
It was started in 1984 by Michael Dell while still a student at University of Texas at Austin. It started as a PCs Limited and started as a company for selling DELL PC-compatible computers that were built from stock components. The main aim of Dell was to sell computers directly to the people because of the belief that this could help him better understand the needs of the clients and provide more products according to the needs of the clients. He could then provide the most cost-effective solutions to his clients.
It was not until the year 1985 that the company produced its first computer which was made on its own design, the Turbo PC with a speed of 8 MHz the idea of selling these computers directly to the people that made this company to rise above scales to be the best computer sale computer and gained popularity from the national magazines which made it further to sell more computers. It changed its name to Dell Computer Corporation in 1988 (Ogg, 2009). From then Dell started making fast revolutions including the sell of its products on the Internet in 1996. It used its website to sell computers. In the year 2002, Dell expanded into the home entertainment sector where it tried selling television and handheld devices. In 2003, it changed its name to Dell Inc. to take care of the other non-computer products that Dell had started selling. The rest, as they say, is history.
Dells service concept
One of Dells service concepts is that of having direct contact with her clients. From the start of their operations nearly three decades ago, one of the service concepts of Dell has been to have a close relationship with the clients. This, they believe, will give them a chance to understand what the customer needs. Understanding the needs from direct contact with the customer is very important. This has leveraged Dell to sell more products than any computer hardware company in the world.
Dell value three golden rules that are very clear with every employee and partner of Dell. These rules include disdain inventory, always listen to the customer, and never sell directly. Disdain inventory is valued so that all customers are treated right without any despise of any. Even small clients are treated with utmost respect and understanding. Dell also strives to always listen to the customer (Business Review Weekly, vol. 21). All their decisions are based on thorough research done to find out what the client requires needs and will strive to provide exactly that. The last golden rule is that of not selling indirectly. They feel that this will deprive them an opportunity to learn more of their clients. Dell sell directly, a service concept which has made them grow leaps and bounds to be one of the most respected companies in the computer industry. It is not so much the quality of their products but the proximity they have with their clients. Most of the progress that this company has had is from their good understanding of their clients and meeting their requirements.
Dell focus on the best solution, not the best technology
Dell understands what they are and what they are not. They focus much on the solution required by the customer and not the technology (Chaffey, 2007). They have this clearly defined so that they focus on integrating many parameters to bring about customer satisfaction. They insist that they are not the superb product integrator but that they are superbly a good sales-and-logistics company. They also claim that they are not the developers of innovative technology. The management believes that todays technology is tomorrows commodity. When a technology is out, what Dell does is to wait for that technology to reduce in cost so that they buy it and convert it into a computer at state-of-the-art factories and then sell them at comparatively cheaper prices thus gaining preference from many clients. It is dangerous if everyone in the company start thinking the same way.
Dell Porters Five Model
Using this analysis, it means that for cases where there is a high barrier built to protect the industries which are already in the market, this will mean that it will be an uphill task for new entrants to penetrate into the market (Aaker, 2004). This will make possible for few industries to dominate the market. the threat for new entrants in computer hardware is very moderate. Currently, what is needed to start independent stores is low capital investment which poses a good opportunity for competition and entry possibility of new industries. In the industry of computer hardware, there is notable product differentiation where customers are loyal to a particular brand. This is a barrier to new entrants to the market. it is worth noting that customers loyalty can be lost too. There are some governments regulations which have made to have their own copyrights like the software this poses a high barrier for new entrants.
Dells use of Information Technology
Dell uses IT to boost operating practices, from customers, to suppliers and outbound distribution. It use Information Technology to refine its business model where it has developed performance metrics that they use for production operation analysis, balance inventory between suppliers and customers, manage collection of cash, market the profitability of operations, return on invested capital and getting the value of the market share. The table that is shown below illustrates how Dell uses Information Technology to leverage its operations in the market.
It also uses IT to improve on its relationship with the wider world where it gives Dell virtual integration reality throughout the whole chain of supply. Suppliers are now able to have real-time inventory control from Dell by use of Dell Information Systems. This enables them to have a one-on-one close relationship with Dell.
Dell also uses IT to manage business operations. There are advanced systems that are used to perform some of the operations. Dell uses Dell Order Management System (DOMS) where a sales representatives logs into the systems and places an order. The order is then directed to the engineering department where is checked if all the details are filled in the online form. If everything is filled, the order is then printed and the process of ordering the product begins.
All in all, Dell has leveraged itself with the use of Information technology where they have managed to stay ahead in the competition. With this trend, they are here to stay.
Future of Dell
The future of Dell is challenging. The company is to improve on customer service as the paradigm of future leverage in this industry is more on the satisfaction of the customers more than providing the right solutions (Verma, 2007). Going by the current trends in Dell and the computer industry at large, Dell has already cut a niche in the market and it is there to stay.
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