Dell Inc Term Paper

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Dell Inc.

The head office of Dell is at Austin, Texas at the same place where the company was based. Dell Americas is also located in Texas, which is the regional business unit for the United States, Canada and Latin America. The regional headquarters offices of the company are in England, for Europe Middle East and Africa; in Singapore catering to Asia-Pacific; and in Kawasaki, Japan, to serve the market for Japan. The production unit for the manufacture of computers is located in Texas, Tennessee, Brazil, Ireland, Malaysia, and China. Dell Computer Corporation sells products and services meant for Information Technology and the Internet backbone. The proceeds of the company for the previous four quarters were $31.2 billion. (Stories of Entrepreneurs: Michael Dell)

Dell's product, pricing, distribution, and promotion strategies

Product

The Dell product line-up of high performance computer systems comprises of PowerEdge servers, PowerApp server applications, PowerVault storage products, Dell Precision workstations, Latitude and Inspiron Latitude C810 computers and OptiPlex and Dimension desktop computers. The company makes arrangement for system deployment and organization, helps customers through the evolution of technology and presents a comprehensive array of additional services. Dell devises and makes custom build products and services according to the needs of its customers and puts up for sale a wide range of peripheral hardware, together with handheld products, and computing software. (Brief Description of the Product/Service)

Pricing

To meet the demands of the multinational customers, the company presents a lot of schemes devised to give global capability, maintenance and coordination. By the use of these programs, the Company can be able to provide one-stop contact centers and answerability with international experts, unique international pricing, uniform service and maintenance programs worldwide and availability of central purchasing facilities. One of the major pricing goals is its worldwide potential. This primary goal presents customers a constant price structure that is applicable throughout the country. (Brief Description of the Product/Service) On a particular day not very long ago, the Dell Latitude C810 Laptop was marked at $2,307 appearing on the Web page of the company meant for small business units. In case of sales to healthcare companies, in the web page, the price of the equivalent device was stated as $2,228 a discount of 3%. State and local governments would have to dish out $2,072.04 or 10% lower compared to the price for the small business units. "The variation in prices is right." (Brief Description of the Product/Service)

In the midst of a slowdown, which is eating away its own profits, the top ranked PC manufacturer of the planet is using an aggressive futuristic strategy to corner a larger than before share of the PC market. The sales force of the company numbering more than 5,000 are always interacting with big corporate customers on their PC buying proposals and in their business they are comparing with the competitors of Dell. Moreover, Dell has been insisting flexible pricing in its agreements with suppliers, a lot of whom even recurrently keep Dell informed on their own prices. These permit Dell to fine-tune the price tags and inducements at once in the wake of changes in its own prices and demands from buyers, from one market segment of the PC market to another." (Brief Description of the Product/Service) "Our flexibility permits us to maintain a distinct stand even within a given day" states a Dell spokesman. A tele-sales executive shortly referred the price of a PC for $50 lower than the price announced in an advertisement in the New York Times on the same date." (Brief Description of the Product/Service) As Dell has no market intermediaries and the company delivers the product directly to the customer, they are capable of managing the prices. As the prices of the component are lower, the net prices of their laptops are lesser resulting in a more content and delighted customers. (Brief Description of the Product/Service)

The business of Dell is well-known by corporate purchasers. It is open that the company sells low cost, average servers, which are somewhat not the latest in technology offering. However, that method has poised certain major companies craving for more. According to Michael Koval, Chief Information Officer with Long & Foster Cos, a property dealer service unit in Fairfax, Va, "the major part of my computer workload is handled ably by a regular Dell server" (Dell Servers: Too Generic?) They come at a low cost, possess sufficient capacity to accomplish the workload and they are simple to organize." (Dell Servers: Too Generic?) But some of the Long & Forster applications, comprised of in-house commission-calculation technique are all set to need more stuff compared to Dell's server having the highest capacity, the PowerEdge 650 equipped with four processors in terms of its performance. Koval says "In case I am going for something larger, I would not buy Dell." (Dell Servers: Too Generic?)

Dells's assertion as the price warrior on Intel-based servers has gradually diminished. As stated by Glenn Gies, director of information technology with ElkCorp, a maker of building products in Dallas who changed to Dell servers in the year 2001 as "our hardware costs were going up due to purchase of Compaq products." (Dell Servers: Too Generic?) However, there was a period when Dell products were 50% cheaper than its competitors, the price gap has now narrowed down to a mere 3%. In the words of Gies: "The scenario at present is at an equal footing." (Dell Servers: Too Generic?) During February 2001, Dell initiated a drive to be the largest player in the PC industry. The company stated that it was deliberately selling at 10% less than its rivals to capture market share very rapidly. That statement, coupled with the familiar information that Dell enjoys price superiority over its rivals, was an indicator that to the remaining players of the PC industry that in case other companies attempted to equal Dell's price tag they will be waging a war they will eventually lose.

The policy and statement of Dell is akin to "low price assurance" notice is widespread among electronics retailers. A low price assurance addresses your rivals, "In case you attempt to chip away our prices, we are going to lower our prices still further." (Dell boosts guidance on strong hardware sales) Truly, this nature of risk has to be supported by the capability to really stay afloat selling at rock bottom prices without going bust. The potential to be in business with lower margins is truly what Dell does and because of this reason they are unbeatable. (Dell boosts guidance on strong hardware sales)

Distribution

In order to comprehend in a better manner the type of system employed to optimize the exposure in the market, it is pertinent to consider the type of delivery channel employed, direct or indirect. The direct distribution delivery system scores over indirect distribution due to a number of causes. The foremost is that through the direct distribution, Dell is able to interact effortlessly and cater to their target market. It lets them to be in charge of the information content that reaches to the intended market. Through the system of direct distribution, it is possible to eliminate the intermediaries, restructure the supply chain and aids in enhancing the Total Quality Management - TQM. Since it enjoys a leadership status in the industry of sales delivery of Laptop computers, Dell was capable of boosting the margins of their Laptops to never before figures by discarding non-value added elements of the sales and distribution process. By building a well-organized and efficient value chain, Dell has the advantage of lowering costs and boosting profits on sales. Dell even has a direct connection with their customer responses, such that they are capable of assessing the performance, contentment and/or malfunction of their merchandise as also the choices and inclinations of the customers. (Brief Description of the Product/Service)

Getting hold of such information lets Dell to rule the apex of the TQM process, adjusting to the modifications on demands. Considering the employing of direct distribution aids in recognizing what type of delivery channel is employed. Dell employs a pioneering distinctive channel distribution structure. The company is even redefining what the value of employing a special distribution channel is. The archaic description of exclusivity was restricted by the closeness of a retailer to its buyers. Due to information technology revolution, Dell is capable of employing a distinctive marketing system, which just uses a telephone access, or computer, and the logistics support of UPS/FedEx that circuits the world in its destination coverage. Dell has been capable to reap enough from the market for which the very existence of the company depends. (Brief Description of the Product/Service)

As the products of the company are obtained only through phone or through the Internet, Dell is a category leader of Internet retailing. Their present system is definitely in place as the company has not made any substantial initiative to deliver their products to conventional electronic merchandisers, and the company has created success history for itself and…[continue]

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