Essay Preview: Dell
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Dell Computer Company was established by Michael Dell in 1984, and it has grown to be the industry leader in the personal computer industry through aggressive risk taking and cost lowering strategies. The strategic idea that Michael Dell had while starting his company when he was 19 years old has not changed as the company has transformed into a billion dollar corporation. This strategic plan encompasses the aspects of individualized products and direct sales to the end customer, lowering retail costs. (Dell Case Analysis, 2004)
The low overhead costs created by their partnerships with suppliers and amazing use of just-in-time inventory help to reduce retail prices, leading to the successes of Dell accumulates today. Down to business approaches, such as being one of the first companies to make e-commerce and internet usage a centerpiece in their corporate strategy has also benefited the personal computer leader. (Dell Case Analysis, 2004)
The explosion of business over the internet helped Dell tremendously. As they followed the vision of built-to-order personal computers and direct sales from the companys inception, the internet gave computer buyers a more convenient medium to purchase Dell computers. The quality control measures Dell undertakes also promote customer loyalty. As purchasing products over the internet became more popular in the late 1990s, there is a noticeable increase in Dells sales and market share during the same period. Dells computer prices were already attractive, as there is no retail middleman to mark up prices between the factory and the end consumer. Dells low prices were especially attractive considering the purchased computer is totally customized to the customers specifications.
Most recently, Dells segmentation strategies were geared toward a younger demographic. Marketing toward teen to college aged students with the “Dude, youre getting a Dell,” advertising campaign works toward creating life-long customers. Many people will purchase their first personal computer during their high school and college years, and Dells low prices and award winning technical support and customer service make this a perfect demographic for the computer giant to target. (Dell Case Analysis, 2004)
While the threatening Y2K scare led forecasters to predict a heavy decline in the personal computer market, Dells sales growth in the United States and Europe increased dramatically during this time. This increase is likely due to falling personal computer prices and the rising trend of internet purchasing behaviors. The most predominant speed bump in Dells business strategy came with the Asian economic crisis in the late 1990s. The personal computer industry, as rapidly growing as it is, only experienced minimal growth in most Asian countries through the late 1990s. This led to further forecasts that industry sales figures would begin a dramatic decline due to personal computers reaching the product life cycles maturity stage in most of the highly developed countries. (Dell Case Analysis, 2004)
Dells direct model starts and ends with their customers. With the power of direct and their team of talented people, they are able to provide customers with superb value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use. With its singular focus on the customer, the model takes five basic tenets and creates a unique way of buying and selling technology. That not only sets Dell apart, it means that the customer experience is revolutionary.
The five tenets of the model are: Most Efficient Path to the Customer: They believe that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost. They