History, Products and Services of Dell - Case Study Example

Introduction This section talks about Dell’s history, products and services. Dell is remarkably a highly advanced company with strong consideration on products, services innovation and customer satisfaction. The following are brief information on the history, products and services of Dell (Dell.com, 3 & 5). Today, Dell is known to provide various line of products and services with great consideration on customer satisfaction such as servers, storage and networking; printing and imaging; notebook computers; desktop computers; electronics and accessories; enterprise services; consumer services; and business solutions. Dell was founded by Michael Dell in 1984. Direct selling of computers to customers through effective business model and effective channel distribution around the world was its first important strategy with strong consideration on customers’ needs for efficient and effective computing solutions. The strategy of direct selling of computer to customers eliminated additional cost associated with the middlemen. This strategy created significant savings among customers. This strategy was undertaken with only $1000 start up capital in 1984. The computers produced then were custom-built and were directly sold to customers. From the year 1989 to 2000, Dell was able to go for the innovation of its notebook computers which eventually lead to the creation of built-in Wi-fi in the said line of product. Such innovation was able to go with the flow on the demand for mobile computing in the new century. From 1991 to 1993, Dell created major innovation on its desktop. As it improved the microprocessor, Dell tried to promote even more its latest technology to customers which made it the top-five computer system maker in the world. Dell is proven good at revolutionising customer experience. From 1996 to 2006, Dell remarkably used its potential over the internet to widen up its coverage particularly on its internet-based support system for its customers. This was very remarkable for Dell since competent employees were hired to address various computer problems of customers. The good thing, Dell was able to handle this via online through remote online troubleshooting and diagnostics of probable problems. In 2006, more than 1 million customers were able to benefit from this service. Within this period of Dell’s history, it was also able to develop and further enhance servers and storage capacity. Dell was one of the five leading storage vendors to provide customers the capacity to manage mainstream and bandwidth-intensive applications. As it can be observed that from 1987 to 2006, Dell was into the strategic moves for global expansion which definitely was able to drive its spiraling growth. Such expansion gave opportunity for Brazil, Poland and India to be part in the expansion process. Dell remarkably was able to lead in the industry allowing it to achieve $50 million sale per day in 2000 and ranked number one in workstation shipments. In 2001, Dell achieved the first rank in the global market share and topped the standard intel architecture server shipments in the United States. From 2002 to 2006, Dell remarkably integrated electronic revolutions into its existing products and even it diversified into another related products such as projectors and printers. Moreover, it was able to integrate the Blu-ray Disc technology for an extreme performance of its notebook computer and its other existing line of products. Remarkably, from 1997 to 2006, Dell was able to maintain and improve its standard in creating enterprise with high consideration on innovating possibilities for services focusing on the needs of the people and its customers. For instance, in 2006, Dell opened up the opportunity to serve not only its customers, but extending and practicing corporate social responsibility. This is the reason that from 2003 to 2007, Dell was finally able to integrate its core values to its corporate social responsibility. Therefore, the year 2007 and the present time is Dell’s significant time to re-ignite its growth for long-term in line with building for its future. This includes fighting complexities in Information Technology Industry and further innovation for its growing business. Market segmentation In business, prospecting is the life blood of selling. The good thing about finding prospects is to be able to have specific target for the offering. Let us take it closely in products and services offering. It is good to look for the right customers who are most likely to buy or use the products and services offered because in such a way, there is a good chance to obtain market for the product and services and eventually ensure higher return of investment. This is the reason why market segmentation is very important to be implemented. In the case of Dell, the company was able to categorised their target markets. Dell’s products and services are offered for home use, for small and medium businesses, for public sector and for large enterprise and partners. It is therefore clear that its line of products can be substantially used by wide array of customers in different walks of life. This is a clear approach using customer-based market segmentation (Schneider, 183). In its website, different customers have the chance to browse products and services based on their needs and based on which category they belong. The company remarkably has different target customers which include young people, students, professionals, businessmen and simply ordinary people in the society with the need to use the offered products and services readily categorised by Dell. In its website, Dell provides specific products and services for Hospital providers and physician practices and the most known of its kind is the Electronic Medical Record (EMR) solution. In addition, Dell also targets the enhancement of system education by providing system that will work for the enhancement of instruction for the modern generation of learners. That is why Dell tries to provide products and services that teachers and district leaders can rely on for planning the effective instruction for learners. As mentioned, Dell is known for its move to transform education in the digital age. With Dell Connected Learning for schools, it can link together the needs of students, teachers, administrators, technologists, parents and communities. All of these are its potential target consumers. In addition, Dell has Mobile Clinical Computing Solution which ensures the security and availability of access to patient information anytime and anywhere. This product promotes data security, clinical efficiency and staff productivity. Teachers, students, clinical professionals and other related customers associated to the mentioned customers are the best segmented target market of Dell. As observed, Dell has the ability to promote its products directly to highly advanced nations with essentially advanced technology and at the same time have the total capacity to maximise it to the fullest. Geographically speaking, these countries are those that try to make use of the full potential of technology in which Dell products and services can be totally integrated. In those countries with full access to technology for their advancement, Dell specifically has different population that can be essential targets for its products and services. The above mentioned customers are moving around the world. They can have easy access to the information about the products and services of Dell through the web. This enables the company to target specific population around the world that essentially has needs for its segmented products and services. Academic institutions, clinical institutions and other diversified groups associated with them can develop the need for Dell’s offerings in such a way there is already diversified and segmented information about the offered products and services. Dell also tried to emphasize the experiences of its customers creating a significant negotiation for product’s price and term (Schneider, 183). The good thing about considering customers’ experiences is that their behaviors toward the offering can highly be categorized. This is the reason why there are line of products suited for students and other products suited for professional or businessmen and more. This suggests the fact that Dell tries to consider behavior of its users so as to eventually understand further the level of their needs. Differentiation and positioning Porter believed that product differentiation plays an important role in order to obtain competitive advantage (Porter, 9). Dell eventually was able to develop brand identification and customer loyalties over time. Brand identification and customer loyalty were developed by Dell through its past advertising, customer service and product differences. However, the most significant approach was the marketing of its products in such a way customers will be able to save more. From its history, Dell tried to sell its products directly to customers without passing through brokers. Brokers or middlemen are usually the reason why the final product ends up expensive for the customers. Dell was first in the industry to try this kind of approach and the bottom line is that it was able to make a significant move. The said approach was first in the industry and this contributed to the fact that Dell’s products and services were highly emphasized among any other. Therefore, it is clear that Dell was able to achieve successful differentiation of its products by focusing on price and quality positioning. As stated earlier from the history of the company, it was not only on price that Dell emphasised. Dell was able to focus on quality and this was clearly emphasised in its website where customer service was one of its top priorities. This eventually is achieved through manufacturing of highly reliable products based on the needs of customers. In the totality of Dell’s strategy for product differentiation, its major approach was highly linked to competition positioning. Ansoff matrix The step to decrease the price for Dell’s offerings was a specific approach to obtain specific share in the market and this in the long term tries to address the issue of market penetration. There are greater advantages when products have significant market share. After all, market penetration increases the product’s market power and ability to stay in the competition. Thus, in order to obtain this, Dell remarkably was able to create competitive pricing strategies. Parts of Dell’s market development are through product expansion, market expansion, pricing policies and its distribution channels. In today’s highly dependent world on technology, Dell essentially was able to expand its market potential over the internet. In order to maximise this, Dell was also able to create regional branches in order to cater the needs of customers for its products and services all throughout the world. Over time, Dell also was able to create new products for its markets. These products were essentially what they are today but it is clear Dell was after of the innovation since it absolutely tries to create different market segments with different needs. Thus, it has no other choice but to create more innovative products and make a new demand for them based on customer’s needs. In fact, Dell always tries to think of possibilities and they always boil down to the development of new offerings. Diversification seems not a problem for Dell considering that it has already established the needed credentials for its products’ brand. Even if it tries to market new products, its loyal customers will always have the urge to try them. In fact, since its products are developed based on customer-centered principle, it would not be hard to find a new market potential for whatever seems to be new out in the market. Application of BCG Matrix The good thing about BCG matrix is that there is a good chance to evaluate the products based on their growth potential and market share. In the case of Dell, its market share potentially reached on top in 2001. Due to this event, existing rivals in the industry continue to challenge Dell and eventually there are now greater considerations on what products to be prioritised that have essentially high market share and high product growth. According to the report from Bloomberg Businessweek (par. 13), digital imaging and utility computing have greater market opportunities. Applying the principle of BCG matrix, Dell must necessarily focus on these areas since there is greater market opportunity. However, these areas need to have more cash as well in order to operate. However, Dell is not that gallant enough to invest much more on product innovation and development unlike its rivals in the industry specifically on the areas of digital imaging and utility computing (Bloomberg Businessweek, par. 11). The bottom line is about setting what to prioritise. It is clear now that Dell significantly wants to have high profit by eventually trying to go for low investments but essentially wants to achieve higher market share. The question now is to ask if this is possible. The answer is evident from Dell’s history. It started to optimize its offerings and offered them directly to customers. Clearly, this minimised add up costs on the offerings which can significantly create high market share in the long run. Now, there can be no impossible knowing that Dell is actually good at what it is doing. Summary Dell is one of the leading companies in its industry based not only on the innovation of its offerings but because of its application of marketing concepts. These concepts applied have been focused on how to strategically create competitive advantage. Competition is very tight and because of this, Dell was able to go for innovating strategies which the bottom line is to gain competitive advantage. Marketing is essentially one of the best strategic tools an organisation can essentially use in order to achieve its corporate goals. Dell is a company that knows the importance of marketing in business. Creating a formula in order to gain competitive advantage is one of the best areas that need to be explored in marketing. Dell has just begun its exploration. For as long as Dell would remain good at what it is doing, then to stay on top of the competition would not be a problem. References Bloomberg Businessweek. Nov. 3, 2003. What you don’t know about Dell. 3 Nov. 2003. Business Exchange. 30 Nov. 2010 Dell.com. History. 29 Oct. 2010 . Dell.com. (2010). Products & Services. 29 Oct. 2010 Porter, Michael E. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press, 2004. Schneider, Gary P. Electronic Commerce. Canada: Cengage Learning, 2008. Read More