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2). The company has demonstrated this effect time and again as it enters new, standardized product categories, such as network servers, workstations, mobility products, printers and other electronic accessories; in fact, almost 20% of every standards-based computer system sold in the world today is a Dell: "This global reach indicates our direct approach is relevant across product lines, regions and customer segments" (Dell at a glance, 2007, p. 3).
Today, Dell competes on a global basis, and it manages its business through three key geographic segments as shown in Table 1 below:
Dell Geographic Business Segments.
This business unit accounted for about 64% of the $56 billion the company earned in revenues in 2005 (Allison, 2006). This market region includes the U.S., Canada, and Latin America (Dell Annual Report, 2006); one Dell executive, Lawrence Pentland, was recently assigned control of the operations in Latin America. Within the Americas, the company reports that it is further segmented into Business and U.S. Consumer; the Americas Business segment includes sales to corporate, government, healthcare, education, and small and medium business customers within the Americas region, while the U.S. Consumer segment includes sales primarily to individual consumers within the U.S.; the company maintains regional offices in Argentina, Brazil, Canada, Chile, Colombia, El Salvador, Mexico, Panama and Puerto Rico (Dell at a glance, 2006);
This region covers Europe, the Middle East, and Africa with regional offices located Austria, Bahrain, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Morocco, Netherlands, Norway, Poland, Romania, Russia, Portugal, Saudi Arabia, Scotland, Slovakia, South Africa, Spain, Sweden, Switzerland, Turkey and United Arab Emirates (Dell at a glance, 2006)
This region includes Asia and the Pacific Rim, as well as Australia and New Zealand (Annual Report, 2006) with regional offices located in Australia, China, India, Indonesia, Japan, South Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand (Dell at a Glance, 2006); however, declining average selling prices for desktops and laptops together with the increase of low-cost competition from Asia, has begun to diminish Dell's traditional cost advantage, compelling the company to identify new ways to distinguish itself from the competition (Allison, 2006).
Sources: As indicated.
While it continues to approach its path to success in innovative ways, Dell has kept a close watch on how best to manage its affairs in an environmentally responsible way. For instance, the company's emphasis on introducing more energy-efficient hardware has proven highly successful. Indeed, Dell's sales of liquid crystal display (LCD) monitors now surpass the company's cathode ray tube (CRT) computer sales, a trend that has introduced an era of flat monitors that use one-third the power of CRTs: "Ultimately, the flat panel is less expensive," as a result, according to a Dell manager (Halal, 2004, p. 27). Furthermore, the company has recognized the environmental impact of its used hardware systems and has taken steps to address the problem. To this end, Dell has made plans for the appropriate disposal of its customers' obsolete systems, and has even provided incentives for them to use Dell for this purpose. For instance, Ella, Meyer and Young (2004) report that like most major computer manufacturers, Dell has sponsored a trade-in program for its customer; the company's DellExchange program facilitates Dell customers donating, trading, or selling used Dell computers.
In addition, during its first quarter of fiscal 2006, the company employed component cost declines to achieve profitable growth as the cost environment improved; the Form 10-Q states: "We expect the component cost environment to continue to be favorable during the second quarter of fiscal 2006 and will continue to adjust our pricing as necessary in response to future competitive and economic conditions. The strength of our direct-to-customer business model, as well as our strong liquidity position, position us to pursue share gains in any business climate" (emphasis added) (Form 10-Q, 2006, p. 7). By keeping abreast of what real people want, the skilled executives at Dell have attempted to remained focused on the most profitable mix of products and services; for instance, the company's Form 10-Q from June 2005 indicates that Dell:
The company] continued to take share in the market as demand for mobility products remained strong contributing to our U.S. Consumer revenue increase. Desktop revenues continued to be a significant portion of the overall consumer business during the first quarter fiscal 2006. We saw strong growth in our printers and consumables, as we continued to focus on growing these products. (Form 10-Q, p. 5)
Furthermore, during 2005, Dell started its shipment of products from its third U.S. manufacturing facility located in North Carolina, and launched a new customer-contact facilities in Oklahoma City, Canada, India, Germany and El Salvador; in addition, the company recently announced expectations that it will continue its global expansion in the coming years: "Our investment in international growth opportunities contributed to an increase in our non-U.S. revenue, as a percentage of consolidated net revenue, from 38% in fiscal 2005 to 41% during fiscal 2006" (Dell Annual Report, 2006, p. 2). As of the end of calendar year end 2005, Dell sales accounted for fully 33% of all personal computers sold in the United States (Dell Annual Report, 2006). Although desktop sales continue to experience record low prices, the company reports that it continues to see notebook adoption accelerate. This trend of notebook adoption in the U.S. market is expected to remain strong well into the foreseeable future (Dell Annual Report, 2006).
Perhaps no other issue remains as important for this company today than its ability to manage change. While it continues to expand its operations on a global basis, the company's capacity to keep pace with its growth has been seriously challenged but not exceeded. To this end, Dell expects the competitive pricing environment to continue to be one of its most challenging endeavors, especially in its desktop, PC and mobility products; the company also anticipates continuing to reduce their pricing as necessary in response to future competitive and economic conditions (Dell Annual Report, 2006). Dell's most recent annual report also indicates that it remains focused on attracting and retaining key personnel as well as further investing in their global information technology infrastructure to support its rapid global growth and the increased complexity of the company's product and service offerings (Dell Annual Report, 2006, p. 3).
The research showed that Dell, Inc. is a leading manufacturer of computing systems for individuals and businesses on a global basis today. The research also showed that competing in a dynamic industry such as Dell requires keeping a close eye on what the competition is doing and what consumers want - and this fairly sums up the company's business plan. If Dell is able to keep pace with its customer service function while continuing to outpace it competitors, the future will likely hold great promise for Dell as it seeks to expand its operations throughout the world. The company's financial performance to date is proof positive that it is doing something right, and the executives at Dell clearly recognize the challenges and opportunities that a global marketplace represents.
Agrawal, Mani, T.V. Kumaresh and Glenn a. Mercer. (2001). The false promise of mass customization." The McKinsey Quarterly, 62.
Allison, K. (2006, June 29). Dell reorganises struggling Americas unit. [Online]. Available:
Dell annual report. (2006, March 15). Yahoo! Finance. [Online]. Available: http://biz.yahoo.com/e/060315/dell10-k.html.
Dell at a glance. (2007). Dell, Inc. [Online]. Available: http://www.dell.com/content/topics/global.aspx/corp/background/en/facts?
Dell, Inc. (2007). Yahoo! Finance. [Online]. Available: http://finance.yahoo.com/q/pr?s=DELL.
Ella, W., Meyer, M.J., & Young, R.M. (2004). Disposal of old computer equipment: A mounting environmental problem. The CPA Journal, 74(7), 70.
Fields, G. (2004). Territories of profit: Communications, capitalist development, and the innovative enterprises of G.F. Swift and Dell Computer. Stanford, CA: Stanford University Press.
Form 10-Q-- Dell, Inc. (2005). [Online]. Available: http://biz.yahoo.com/.
Halal, W.E. (2004, March-April). The intelligent Internet the promise of smart computers and E- commerce. The Futurist, 38(2), 27.
Appendix a Current Dell Products and Services
Source: Dell at a glance: Products and services, 2007
Servers: Dell's standards-based PowerEdge line of servers is designed to provide customers affordable performance, reliability, and scalability. Options include high performance rack and tower servers for enterprise customers and aggressively priced tower servers for small organizations and workgroups/remote locations.
Storage: Dell/EMC and Dell's PowerVault lines of storage products offer customers a comprehensive portfolio of cost-effective hardware and software products to store, serve and protect customer data. The portfolio includes external storage, tape backup products, network attached storage, fibre channel arrays, storage area networks, and rack solutions.
Printing and Imaging Systems: Dell features a wide array of Dell-branded printers, from photo printers for consumers to large multifunction lasers for corporate workgroups. The Dell printer product line is focused on making printing easier to buy, own, and use. All Dell printers feature the Dell Ink Management System…[continue]
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