Analysis of the Activities of Dell - Research Paper Example

How Dell gained success How Dell gained success Dell is a well-established computer company that has opened branches all overthe world. It deals with various issues about the computer like, maintaining, selling, programming, and repair. It got its name from its founder, Michael Dell. It has assisted in solving various issues in Microeconomic world; mainly the unemployment rate(Litan, 2010). It has employed over a hundred thousand people in different parts of the world. Furthermore, the company has promoted a friendly market base because it also sells commodities of other companies. This company mainly dealt with the hardware part, but it also entered the software market after it acquired Perot Systems. The company has gained significant recognition in the world and is currently the number three supplier of computers in the world. This paper is going to highlight the business cycle of Dell, including risks the company faces, and the reason for their success. Dell computers face challenges in its demand. The company offers its computers at low cost. The low price makes customers buy the computers. Lower prices and high quality made dell computers become so popular all over the world. An increase in demand required an increase in supply. Dell expanded its company size and was able to manufacture many computers, making it the number one shipper of computers as by 2012. Consumer’s income always affects the supply of demand of a product(Hawken, 1988). It also depends on the commodity. A customer will not spend more than what he earns. Dell established itself in the high life areas of Texas. These are places where people are high-class earners. The demand for dell was on the rise here, and more people came to know about dell. It was the baseline for the success of Dell as more and more people came to know about it. After reaching the big markets, Dell reduced its prices to favor the low class earners. Prices of goods that relate to each other are forces that affect supply and demand. HP and Lenovo are the main competitors of Dell. Each company has different prices on their computers. HP computers are cheaper than Dell computers. This has made HP have higher demand in their products compared to Dell. If goods are of same characteristics, but from different companies, people will favor the cheap one. HP is the number one PC vendor in the world because of this. Dell is trying to improve its demand by reducing the prices of their goods. Computer companies always face competition in the markets based on the level of production. The systems in the computers are very similar that customers always take different types of systems as substitutes for one another. If a customer misses on Dell in the shop, he will go for an HP. This characteristic has made Dell increase its supply in various outlets, in the world. A preference of a customer is a force that affects supply and demand. A customer’s taste is a much-respected quality. Businesses always strive for their best to maintain the customer’s taste(Hawken, 1988). Some factors can change the customers taste for the product. Poor customer relation and service delivery can put off a customer’s preference for a given company. A celebrity endorsement of a product will raise its demand(Fortenberry, 2009). Dell used the endorsement from Kim Jong II. It made Dell gain many customers from Kim’s fan base and the Asian region. The company increased supply to Asia and other parts that Kim had a large fan base. A lot of eye related health facilities recommended dell for its health observance when it came to the eye. Dell put into consideration the health concern of its customers. Its management did this in order to maintain the customers’ taste and maintain their high supply. Another force in demand supply is the customer’s expectation. A person’s expectation for a product to help him in the future or currently will influence his purchase ability. Dell always tried its best to maintain the customers’ expectation. They promised to get the latest Microsoft Windows as soon as they arrive, and they never let the customers down. Fulfilling a customer’s expectation will maintain him. Dell increased its supply because there was a lot of demand. A rumor that the Dell products will be over in the markets, because of increased demand, further ignited the customers to buy more of their products. One cannot stand missing any of the Dell’s products. This is because of the expectation of the people. Fulfilling this made dell gain additional customers. A number of customers will influence demand and supply. Starting a business in a scarce population will lead to its failure. For a firm to pick up quickly, it should choose a location where there are many customers. Consumers are the backbone for any business. Dell opened its business in a city where there are many people. They fulfilled the customers’ expectation and attracted many people. It increased the demand for its goods. Supply too needed an increase. These factors made Dell rule the market, making it a multinational corporation. Quality of goods will influence the level of supply and demand. A high quality product will attract additional customers(Chaney, 2009). If a customer buys a product and he realizes it is not original and of poor quality, he will never buy a product associated with that company. Dell has tried its best to maintain the quality of its goods. The management always emphasizes on originality. Maintaining the flow of computers from the computer to the shop is a hard task. Dell has employed agents all over the world, who ensure the products reach the target market. They have barcodes stacked on every computer guaranteeing the customer originality. Most of their outlets offer free repairs to their spoilt computers so that the buyer feels secure with Dell products. This factor has made the demand for Dell products to be on the rise yearly. They maintain their demand by ensure supply is increased to meet the customers’ needs. Dell achieved success because it had the best market structure. Its structure was of pure competition. There are very many numbers of sellers of computers and their parts. The number of buyers is also high because there is increase demand of computers. Many computer companies create identical types of products. To enter into the competition is very easy but to get to the top is hard. Each seller has no power in the market. This makes Dell operate in a very competitive environment. The managers of the firm apply various marketing tools so as they reach the top. They had a plan on what they will be doing. Budgeting is included in this plan. This ensures the corporation is always on track for many years to come(Cavaciocchi, 2010). Even when the business is facing boom, a plan is always there for the employees to follow. Dell kept maintaining producing high quality of goods. Customers will forever flock the firm’s outlets. They do not need any form of advertisement to attract new customers. Satisfied customers carry the good news to other people(Ottman, 2011). Employees in Dell are highly trained. This makes Dell a professional organization. The public image of Dell is very good because of their good service delivery. Dell has established itself into a multinational corporation. They have gained enough money for them to use powerful marketing means. Every employee has a business card, sales brochures, an established website, uniforms, and well recognized logo. They have the will to get to the top. They never lagged behind even after they hit the international markets. This tool keeps them focusing, and forever aiming for the best. Good marketing involves a database(Lavinsky, 2012). Dell has a simple database where customers can view it easily. The management keeps in touch with all outlets easily, and this ensures efficiency. Dell ensures they have ruled the market by reducing prices of their goods. It makes them conquer competitors with ease. They try very best to keep in touch with their customers. This is in the form of opening many channels where customers can reach them. People can purchase their products from the internet and through mobile communications. The managers of Dell utilized their creativity. They knew by maintaining health standards and protecting the environment; they will get endorsements. These are new ways Dell advertised themselves to the customers and take over the markets. Furthermore, Dell had a human resource department that took care of their employees. They were motivated and did their work out of heart. This had a positive effect in the organizations, because workers were social with the customers. They interacted while doing business, and the customers were very satisfied. The employees were very useful because they advised buyers on what fits them. Customers have all their time purchasing the computers, and it requires the right employees to keep them around them. Dell built a lot of partnerships. It acquired so many corporations in America. They took over the markets previously owned by these corporations and capitalized on it (Lavinsky, 2012). Dell faces so many risks. Internal risks include poor leadership. There are many departments like purchasing, finance, sales and marketing. These departments have heads, and if they have poor skills, the company may suffer losses. This paper recommends that, firms should interview people and look for the ones with adequate training. Making poor decisions is another internal risk Dell is facing. If the decision affects important parts like strategic plans, the firm will fail. This happens if there is selfish thinking, poor advisors, or arrogance from the management. This paper recommends the policy makers in the firms to involve many partners, as experts, in making important decisions. Fighting for power is another internal risk Dell is facing. With the delegation of power, every branch will have a role to play. People fighting for power may ruin the public image the company has created for years. If the firm lacks delegation of powers, there will be lack of coordination in the firm (Litan, 2010). Workers will depend on the management only, whenever there is an important decision in question. This paper recommends that every firm should have separation of powers to avoid fighting over control. Corruption is an internal risk dell is facing. If there are fund embezzlements, the firm cannot realize its intended target of profits. There will not be any growth. This is corporate crime, and this paper recommends firms to have an efficiency and transparency system to keep away corruption. There are external risks Dell is facing like economic factors. Nobody can predict the market conditions. Price fluctuations can affect the sale of Dell’s products. If there will be a change in consumers’ incomes, Dell can take this as an advantage because there prices are always friendly, whatever the economic changes comes in place. There is no firm, which can predict this risk. This paper recommends firms to employ market researchers who will know if this risk is to their advantage or disadvantage (Ottman, 2011). Natural calamities are an external factor Dell is facing. Example is earthquakes and floods. No firm can predict this risk. There will be loss of property and lives included, if they occur. This paper recommends firms to have emergency response teams. Managers should consult with Geographical experts who may predict what may happen in the future. Political factors are another external threat. This may result to civil war, which will destroy the markets. This paper recommends firms to open business in areas of political stability. Dell is a multinational corporation, whose business cycle fall in the boom part. They are now the number one organization that supplies computers. Furthermore, the company has opened branches all over the world hence their customer base is always growing. In times of the Katrina, Dell faced recession in some parts of their outlets. There was a reduction in profits. They picked up from the calamity and expanded fast. Dell has never been in depression because their leaders have focus and have a business plan. They operate under a planned budget; therefore, they cannot face any underfunding (Chaney, 2009). In conclusion, any small firm can grow and hit the international market. They have to apply certain market factors that will aid their growth. If a firm is picking up, the owners should open another one like that in a different place. It is like a business expansion. When the firm looks like it is facing failure, the managers should offer it a business opportunity. Challenges are there, and any entrepreneur can challenge it. Forming an alliance is important in improving the business. The collaboration will be powerful, and it will command a huge market base. A small business can grow if it diversifies. An entrepreneur should make his business known. He can participate in business exhibitions and give a talk. Diversifying will help the business target other markets, and it will grow in the end. Applying for contracts can help a business grow. If it wins a tender, it will generate revenue that the management will use in financing productions. Government contracts are the most lucrative and these businesses should aim contracts like this. References Cavaciocchi, S. (2010). Economic and biological interactions in pre-industrial Europe, from the 13th to the 18th century. New York: Firenze University Press. Chaney, P. (2009). The Digital Handshake: Seven Proven Strategies to Grow Your Business Using Social Media. Chicago: John Wiley & Sons. Fortenberry, J. (2009). Health Care Marketing: Tools and Techniques. Atlanta: Jones & Bartlett Learning. Hawken, P. (1988). Growing a Business. Chicago: Simon and Schuster. Lavinsky, D. (2012). Start at the End: How Companies Can Grow Bigger and Faster by Reversing Their Business Plan. Washington: John Wiley & Sons,. Litan, R. (2010). The Economic Payoff from the Internet Revolution: Brookings Task Force on the Internet. New York: Brookings Institution Press. Ottman, J. (2011). The New Rules of Green Marketing: Strategies, Tools, and Inspiration for Sustainable Branding. New Orleans: Berrett-Koehler Publishers. Read More