Case of Dell in Australia - Essay Example

Case Study Report on Dell Australia Introduction For Dell, one of the key areas of competition is over access to distribution channels to ensure that products could be brought to market. Power lay in the hands of those who could take a product and deliver it to a customer — hence the increasing strength of retailers like Dell. This trend of 'disintermediation' will undoubtedly continue as the growing ease of access to technology enables a wider customer base to be reached. The introduction of computer-based shopping via the Internet provides manufacturers with a cheap and effective way of reaching their customers directly.B2B and B2C become the main models used by companies to reach their target audiences nod meet customers demands (Bearden et al 2004). It seems likely that direct selling from the manufacturer will grow exponentially. Indeed, it is this very transferability of information which virtually guarantees the demise of traditional industry boundaries. Companies are increasingly finding that, if they combine their information assets with those of other companies, the combined information resource is considerably more useful to all sides: two and two, in this instance, can make a lot more than four. Put together a social security or tax database with another database of people who owe debts and you have a means of tracking individual debtors over long periods of time and collecting the debt from them when they finally have the money to repay it (a process known as debt surveillance and already being offered by some companies) (Dedrick and Kraemer 2001). Question 1 The corporate objectives of Dell are to make self-help more useful and easier to use, improve customer support and direct customer relationships. Clear and effective strategy allows a company to redefine itself — at all levels, from strategy to the operation of individual processes (Drejer, 2002). Dell, a company that is comparatively unconstrained by physical geography (a seller of services across the Internet, for example) can reconfigure its distribution to take advantage of the variances in domestic tax regimes at virtually no cost: it does not have any physical assets of any consequence that need to be relocated. For dell, its value chain can be seen as a series of interrelated functions within any organization that link its inputs (raw materials to a factory, in-bound logistics to a retail outlet) to its outputs (outbound logistics, the sale of goods to customers), the virtual value chain refers to the value that can be generated by exploiting the information generated by any stage of this process. In this way, information, which in a physical value chain is merely one part of the supporting infrastructure, becomes, in a virtual value chain, an end in itself and one which has commercial value (Dedrick and Kraemer 2001). Question 2 The main competitors of Dell in Australia are Compaq, IBM and Hewlett-Packard. Thus, computer market is divided on small and individual consumer market: the main competitors here are Gateway, Compaq, Hewlett-Packard, Apple, and eMachines (Dedrick and Kraemer 2001). In the potable PC, Dell has to compete with such giants as Toshiba, IBM, and Compaq. In this new environment, small companies may have advantages that larger ones lack (Hollensen, 2007). They will be able to offer added value services, for example by personalizing products that they sell based on the information gathered and manipulated through these new media. the main Internet service providers are Sun, Compaq, HP, and IBM. The main threats in Australia are increased competition and leadership position of other US-based companies. The other threat is low prices proposed by other companies. Many Australian consumers are brand loyal buying well0known American and European brands. Dell has to invest in advertising and public relations in order to reach its target audience and popularize its brand in Australia (Dedrick and Kraemer 2001). Question 3 In Australia, Dell serves both businesses and individual customers. For individual customers, Dell proposes standardized services and offers customers enough to replace personalized attention. Lower prices, a combination of prices and quality provided by customer service department, and speed of service offered by quick oil change specialists are some of the compensatory benefits customers are often willing to settle for. Individual customers are diver in character but demand high quality and innovative solution (Perreault et al 2003). The other target audience is represented by e-commerce market. “in areas including broadband and wireless communications, business-to-business and business-to-consumer e-commerce, ASPs, server and storage infrastructure, Internet content, and e-consulting” (Dedrick and Kraemer 2001, p. 6). Products and services are therefore undoubtedly similar as far as the "bottom line" of need satisfaction is concerned. However, another essential distinction separates them further. Also, customers can be differentiated based on language, communications protocols and power sources. Dell serves small businesses and large enterprises selling such products as the Latitude line, the Inspiron, the Precision line and PowerEdge servers. These customers demand high security and low cist of services provided(Dedrick and Kraemer 2001). The main types of relations are B2B and B2C. B2B relations are typical for service providers and government institutions, with national and multinational companies (Kotler and Armstrong, 2005). In Australia, these groups involve wholesale retailers and construction companies, financial and business institutions. B2C relations are established with small or geographically isolated customers. In dell, segmentation is based geographical criteria and the type of business: large and small, state or private company. Question 4 In order to improve its market position, Dell should concentrate on the state enterprises and educational institutions. In this situation, mass-customization will institutionalize flexibility: it will allow Dell to respond to market needs as they change rather than some time later. Its greatest use, therefore, is thought to be in unstable and unpredictable markets where traditional product development life‐ cycles and marketing plans are irrelevances. Conversely, it brings little advantage in markets where customers' needs remain the same year on year. Being better positioned to respond to customers' needs means that the company will make sales (of new rather than existing products) that it would not otherwise have made (Kotler and Keller 2005). Conclusion The case of Dell Australia shows that the company obtains a strong position in this market but is faced with fierce competition. It creates a successful marketing strategy involving B2B and B2C relations. To make it happen requires that a company uses the opportunities opened up by the information revolution to redesign the processes that it uses to handle information. It needs to re-examine how to obtain the necessary information from a customer, convert that information into a product description and then pass that information to whatever unit of production is going to develop the product. The principles are the same for all industries, from consultancy, where a consultant is undertaking a particular study, to manufacturing, where a particular product is being developed. Without the appropriate flows of information, mass-customisation cannot and will not work. Bibliography Bearden, W. O., Ingram, Th. N., LaForge, L.W. 2004, Marketing, Prentice Hall. Dedrick, J., Kraemer, K. 2001. Dell Computer: Using E-commerce To Support the Virtual Company. Drejer, A. 2002. Strategic Management and Core Competencies: Theory and Application. Quorum Books. Hollensen, S. 2007, Global Marketing: A Decision-Oriented Approach. Financial Times/ Prentice Hall; 4 edition. Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall; 11th edition. Kotler, Ph, Keller, K. 2005, Marketing Management. Prentice Hall. Perreault, W.D., Cannon, J.P., McCarthy, E.J. 2003, Marketing: Principles and Perspectives. McGraw-Hill/Irwin; 4 edition. Read More