The secret behind the success of a business organization or any general firm lies with the employment of efficient personnel. Highly professional and skilled employees are a factor that guarantees prosperity and a bright future for the organization. There is a wide range of available work force on the market, both competent and incompetent.
In order to hire only those that meet the necessary requirements of a type of job, appropriate selection criteria are necessary. This paper will look at the selection criteria used by two international companies, Dell and Ericson, and their importance to the firms. The paper will also discuss the advantages and disadvantages of internal and external selection of an employee to replace the author at a national Auto Parts Chain.
Personnel Selection Criteria
The sending of an application letter and attached curriculum vitae to either Dell Inc. or Ericsson is the first step for any person looking for employment in these two companies. A prospective employee’s application letter and curriculum vitae is a portrayal of the real person.
This is why both Dell Inc. and Ericsson put extra importance on this first selection criterion. Resume screening as a personnel selection criteria is of most importance to these two international companies especially because they at times offer online employment opportunities. This is because there may not be a possibility of a face to face interview with the person looking for employment. In this case, they solely rely on the resume to assess the suitability of the applicant for the job being offered.
A resume exposes some personal attributes of the applicant. First and foremost, the orderliness of the person is seen in the neatness and the way he or she has arranged the curriculum vitae. A shoddy resume is a possible indicator that the applicant is an outwardly disorderly person. A poorly structured resume may also point to the fact that the applicant does not place special emphasis on his or her work. In this case, the two companies may not risk hiring the services of such an applicant.
It is feared that the scrappy appearance of the resume may translate into negligence in the applicant’s duties if allowed to take the job on offer. This criterion is suitable in situations where the two companies have received a lot of applications and need to choose only those who are tailored to that particular job to move to the next step.
The second criterion in personnel selection is engaging the job applicants in a phone interview. The first thing to be tested in this case is the availability and reliability of the job applicant. This will depend on whether the applicant is available on phone or not. Applicants who can’t be reached by a phone call are automatically disqualified.
This is because they dishonestly provided a wrong phone number or are simply not available. Whichever the case, this is a potential indicator of the future unavailability of the applicant if granted the job. Dell and Ericsson would like to work with people who can be reached by phone at any working hours and this mistake on the part of applicants will cost them the job.
A phone interview is also important when analyzing the communication skills of the applicant. Proper communication skills are important features that the two firms look for in all employees. In the course of the interview, representatives of the either firms pay close attention to the applicant’s way of answering questions asked and manner of talking. Those who show unprofessionalism in their talk or give wrong answers stand a chance to lose the job.
Finally, a face to face interview is the last and most significant criteria in personnel selection. In this case, the Human Resource Manager of either Dell Inc. or Ericsson arranges for an interview with the applicants who have successfully gone through the above two processes.
A face to face interview provides the Human Resource Manager with an opportunity to verify the strengths and positive personal attributes of the applicants that had been identified in the other two processes (Dell and Fredman, 1999). For instance, the manager is able to gauge the cleanliness of the applicants that had been portrayed in their resumes by the way they would have dressed and how they would present themselves.
The most significant aim of a face to face interview is to determine the suitability of the applicants for the job. This decision will be arrived at through careful scrutiny of their skills and knowledge. This will be done using questions related to the job being offered. The resolution of the Human Resource Manager on which applicant gets the job lies with the outcome of the interview.
Advantages And Disadvantages Of External And Internal Personnel Selection
Selection of an employee from the Auto parts retail chain to replace the author as a store manager has a number of benefits. First and foremost, the internal recruitment will not only be used as a tool to appreciate an excellent employee but also as a motivation to other employees in the Auto parts retail chain.
Internal recruitment will also be effective in terms of cost because the employer will only have to add a certain amount to the employee’s salary as opposed to external recruitment where the new employee may demand a higher pay (Huber, 1994). Finally, internal recruitment will be effective because the employer is assured of the employee’s past good performance.
On the other hand, internal recruitment may have disadvantages such as lack of innovative ideas. The employee who will be selected as the new store manager will not bring any new ideas because he or she hails from the same organization. This will lead to minimal or lack of growth in the firm. Another limitation is that the employee may need extra training in order to cope up with the new duties and assignments of a store manager. This will waste the firm’s resources and time. This will translate into a loss to the business.
External recruitment will also be suitable because of the following three reasons. First, the organization gets new ideas into the business by hiring a new employee (Armstrong, 2006). The new ideas may be crucial in taking the business to a new level in production.
Secondly, the new employee will bring a spirit of competition into the business. Other existing employees will strive to perform better than the new employee in efforts to get the job (Legge, 2004). This will improve the production of the business. Finally, external recruitment will reduce training costs. This is because the hired employee has all the necessary skills needed to run a store.
On the contrary, external recruitment has the following two limitations. The outside selection of an employee to fill the position of a store manager will demoralize the internal employees. This may lead to a drop in the production of the Auto parts retail chain. Finally, outside personnel selection may lead to slower operations in the store as the new store manager struggles to adjust to the new job. This may have far reaching consequences on the income of the organization.
In conclusion, personnel selection involves three criteria that have their significance. These are resume scanning, phone interview and face to face interview. The combination of these three criteria leads to the selection of the best personnel. Finally, it is also evident from the foregoing that both internal and external personnel selections have their benefits and limitations to the organization.
Reference List
Armstrong, M. (2006). A handbook of Human Resource Management practice. London: Kogan Page.
Dell, M. & Fredman, C. (1999). Direct from Dell: Strategies that revolutionized an industry. New York: HarperColins.
Huber, B. J. (1994, November 16). Recent Trends in the modern language job market. Profession 23(9), 87-105.
Legge, K. (2004). Human Resource Management: Rhetorics and realities. Basingstoke: Palgrave Macmillan.
The merger between HP and Compaq elicited several issues. Indicatively, there are critical lessons about corporate strategy that can be learnt from this merger. The acquisition was unique from other dominant mergers that have occurred in the recent past. The stock market played a crucial role in the acquisition process.
This strategy enabled HP to develop a potential stepping-stone towards a remarkable global performance. The corporate strategy applied also enabled HP to acquire the largest share, (64 percent) of the total value. The next strategy involved the absorption of Compaq employees in HP. This integration also included the senior board members of the company.
The strategy was vital since it enabled the protection of key interests of Compaq. Particularly, this is critical in the process of decision-making and policy formulation. The acquisition involved the establishment and analysis of product plans. This important observation enabled HP to continue dealing in the Compaq products.
However, the product brand changed and combined both the companies. The strategy has enabled a successful process of marketing and product promotion during the period of merger. The two companies also rationalized the product lines. Apart from this, they engaged in the harmonization of branding and outlook. This initiative enabled Compaq to continue with its client base and market orientation. Hp decided to operate within four major frontlines and divisions.
In the acquisition deal, the IT infrastructure division was slotted for Compaq’s leadership. The president of the Compaq was to provide the critical leadership in this special division. Operating within four divisions managed at a focal point was a transformational and unique corporate strategy.
The fundamental objective was to enable Compaq to exhaust all its products and attain its projected level of efficiency. HP chipped in to augment the low level of organic development evident in Compaq. Another significant strategy for the merger process was the development of a uniform business model. This strategy entailed the engagement of expert advice and assistance. Key partners from the two companies tested the operational structure.
The testing process provided a chance for identification and classification of expected challenges. A remarkable length of time was used for rationalization. During this period, several operations were undertaken. These included the closure of several manufacturing plants.
The merger also made specific improvements on different joint operations. These included improvements on product brands, manufacturing and delivery systems. Observably, the acquisition process applied diverse strategies that are crucial for effective learning and development.
The Advantages and Disadvantages Associated With the Strategies Followed By Dell and HP
The corporate strategy applied by the two companies during the process of acquisition has notable disadvantages and advantages. For instance, the strategy enabled a smooth and successful transition process.
This was achieved through fusion of the major product lines and brands. Apart from this, it is notable that the strategy enabled the reinforcement of the human resource and expert capacity. The companies brought together most of their senior, experienced and expert workers together. Other notable disadvantages emanate from this strategy.
For example, absorption of employees from Compaq may lead to the importation of foreign work ethics. Compaq had already failed to gain the competitive advantage. Ideally, a fresh group of employees would be ideal for the new joint venture. There could also be possible risks of infiltration on the capital and assets of HP. These include some of the advantages and disadvantages of the strategy.
Formation of strategic alliances in the international front requires proper assessment of the environmental conditions in the identified country. Therefore, in this case Dell has to assess the trade conditions in the UK before the establishment of a strategic alliance in the region. Such evaluation must take into account all the factors that affect the computer business in the UK.
Based on the PESTEL model, the first group of factors falls within the realm of political requirements. In this case, Dell Inc has to assess the current and future legislations that directly affect the computer industry. The computer industry is in the UK is a lucrative industry due to high demand of computer products.
However, the sector is heavily regulated by the government to ensure secure trade in computer products and services. Issues such as data security have subjected the sector to intense regulations in the UK. Dell will therefore have to adhere to the requirements before establishing its strategic alliance in the region. With regards to political stability, the UK region is one of the regions in the world that is politically stable.
With regards to economic issues, the UK is currently enjoying a state of economic recovery after the financial and economic crisis in the year 2008. The current economic conditions also favor the development of trade in the region.
Most countries in the region such as the England and Ireland also experience a constant growth rate in the GDP. However, it is important to note that the region’s economy relies on very complicated financial services such as the subprime mortgages in the U.S. such conditions may lead to a future financial crisis if they are not solved.
Socially, the UK region is one of the areas in the world that has a diverse range of social aspects that affect the manufacturing sector. The consumption in the country is heavily determined by the demographic factors such as age and gender.
Consumption of computer products and service is higher among the youths and adults in early middle age. The consumer purchase decisions in the region are also affected by the value of the brand. The media sector plays an important role in influencing the consumer behavior in the region.
Technological environment in the UK is highly developed. The UK is the center of innovation in the world. Apart from the U.S. and Japan, the UK is one of the regions in the world that has highly developed technologies. This therefore presents a good opportunity for Dell to establish its alliances in the region.
However, the company should be ready to experience intense competition due to the presence of other locally based computer firms. With regards to environmental issues, the UK has tough environmental laws that control the activities of the environment.
However the region has abundant natural resources that are important for operations of the company. Legal issues greatly influence the computer industry in the region. The UK has established regulations that are meant to control the establishment of trade.
In spite of the aforementioned factors in the PESTEL analysis, I will not suspend or limit the operations of the company in UK due to availability of natural resource, better trade conditions, proper strategic location that can be easily accessed by many consumers across the world. The region has good trade networks, which Dell can use to import raw materials from other parts of the world and at the same time export its finished products.
Dell Company is an international enterprise dealing with computers and its accessories. It is based in Round Rock, USA and employs over 96,000 employees in its worldwide branches. The name Dell was derived from its founder Michael Dell.
Growth of Dell Company is attributed to mergers and acquisitions including the take over of Alienware in 2006 and Perot Systems in 2009. Some of the products manufactured and sold by dell include: Personal computers, servers, software among other IT products. Marketing of these products depends entirely on the description of the market segment.
Manufacturing criteria of Dell also considers proximity to its customers such that just-in-time approach is of essence. In 2004, Dell Company limited took up an initiative to recycle products which lead to its subsequent award for promoting responsibility on the part of the producer.
Notwithstanding, the technical support offered to customers, Dell company utilizes extensive marketing strategy with an aim of reaching many customers. Use of advertisement and dell kiosks has increased product penetration in the market. Dell kiosks were oriented to give personalized service to customers i.e. by way of shopping, or telephone services.
ASUSTeK Computer Inc. participates in manufacturing and sale of ICT equipment and software programs. Some of its major products comprise of: laptops, personal computers, broadband products, mobile phones and computer accessories. Its location is in Taiwan.
Introduction
This paper presents a marketing report of two internationally based companies namely: Dell and ASUSTeK Computer Inc. Dell are based in Round Rock USA while ASUSTeK is located in Taiwan. The ASUS manufacture ICT equipments to be sold in international as well as local market whilst Dell assembles components. It is important to investigate whether the company’s management participates in strategic marketing and planning.
If so, then we shall explore the strategic Hierarchy of the business investment. Firms thrive under certain micro and macro environment. 2008 recession is one of the macro environments which affected negatively the productivity of both companies whilst the micro environment mainly captures marketing criteria used to outwit its competitors i.e. Apple. These environments will be investigated in-depth by this business report.
Dell and ASUSTeK Computer Inc have registered a substantial level of success from its business dealings due to maximization of efficient marketing strategies. The strategies which will be analyzed in the report comprise of: segmentation, target markets, positioning strategy, and ultimately SWOT analysis. Before concluding the paper, recommendation to the respective industries will be outlined.
Industry Background
Nearly all sectors in an economy depend entirely on information communication technology. ICT industry is therefore the backbone of both manufacturing and service sectors. This industry has registered a fast pace of progress in terms of technology. In the past, desktop computers with low speed were utilized.
This is not true in the recent times since Dell and ASUSTeK Computer Inc have managed to supply in the market mini computers with high level of speed. Dell’s brands such as Vostro, OptiPlex have the features of reliability, long life, and serviceability (Koehn, 2001). ASUSTeK Computer Inc is also manufacturing pocket PCs, broad bands, and graphics cards with a target of meeting individualized needs of their customers. This is a clear indication that ICT industry is dynamic in nature.
Apple industry which is a major competitor released iPad tablet computer which was quickly embraced by the business world. Use of ipad in Japan had a great impact in the business world simply because of its resolutions and advanced features. Another factor contributing to the success of iPad is the use of stylish, supreme marketing and excellent branding of the products.
From this brief analysis, we can conclude that, ICT industry emphasizes on introducing sophisticated product into the market in order to capture the attention of the target group and out-beat competitors. It must always be the objective of the company to satisfy the needs of the customers by producing quality goods and services.
Company background
In 1984, Michael Dell formed PCs limited to sell IBM PC-compatible computers from components of stock. These computers were sold directly to customers.
The aim of PCs limited was to understand the needs of the customers so as to be able to supply customers on a direct basis. Due to the success of the business, Michael dell dropped out of school to channel more energy on the new business. This was after he received a support of 300,000 Dollars from his immediate family. In 1985, Dell Company managed to market ‘Turbo PC’ on its own.
This computer was sold for 95 US Dollars. At that time PCs limited utilized the national computer magazines as the advertisement channel. Orders placed by the customers were organized in such a manner that it fell on a selection criteria. In its first year of trading, the company recorded gross earnings of 73milion dollars. In the year 1985, the company assumed another name, ‘Dell computer Corporation’ and began its international business expansion by entering Ireland.
In 1996, Dell started selling computers through its website and in 2002 its line of business stretched to include television and other computer accessories. This necessitated rebranding of the company name as ‘Dell Inc’. CEO Kevin Rollins took over from Michael Dell in 2004 and served till 2007.
During this time, Dell acquired Alienware as a subsidiary company which introduced AMD microprocessors. Due to its dismal performance, Michael Dell took over as CEO again and in 2008 and acquired EqualLogistic with an objective of gaining a grip in iSCSI Storage Company.
Acquisition of this company reduced manufacturing costs to its lowest level. Dell announced in 2009 a motive of purchasing Perot Systems to become a subsidiary company. Perot Systems specialized in strategic consulting, development of application and system integration (Koehn, 2001). It also dealt with outsourcing in addition to running call centers and handling claims.
ASUSTeK Computer Inc deals with computers and its application in information communication. Its products consist of consumer electronics such as desktop personal computers and other hardware devices. Some of the subsidiary organizations are: AMA Corporation, ASUS computer international, ASUSTeK holdings and other several well developed companies.
ASUS and Germin have engaged themselves in developing mobile phones located in some specific places. The product developed will be called Garmin-Asus nuvifone series. Furthermore, the company entered into partnership with DeviceVM LTD to integrate new technology of Splashtop which allows a user to boot computers and access internet within the shortest time possible.
There is also a possibility of forming a joint venture with Giga Byte technology Co. This means that Giga Bytes would transfer its assets and operation into the joint venture. Partnership between ASUS and a Chinese company, Huan Hsin Holdings, Ltd, would lead to manufacture of notebook casings. Another form of joint venture was with Disney Consumer Product inclined to development of Disney Netbook which is very efficient to use.
Strategic marketing and planning
Strategic marketing and planning describes how a business conducts its activities with an objective of realizing maximum returns from investment (Baker, 2008).
It captures overall activity of the business starting with production, establishment of market segments, interests of the customers, financial base of the business and the human resources. For a business venture to meet its wide goals and specific objectives, the management is under strict obligation to shape the company’s products in a manner that will lead to realization of market needs. Strategic planning therefore relates to the overall direction of the business.
Top management of a business venture ought to conduct a comprehensive review of the market and its opportunities continuously which enable them make a long term strategic arrangement. Strategic marketing plan integrates both the goals of a business with the needs of the customer.
In order to realize strategic marketing plan, planners need to segment the market with reference to such factors as Geography, Demography, Psychographic and behavioral factors (Baker, 2008). This stage is preceded by profiling the market segments while taking note of income potential, market share potential, and productivity potentials. Finally, a market segment marketing strategy is developed. This will require a choice between a market leader or product line, mass marketing or target marketing, direct or indirect sales.
Strategy used by Dell has its basis on the following key elements: direct sales, market segmentation, sharing of data and information with supplies, customer care services and bunch customization. It is the hope of the company that the strategy will lead to realization of Dell’s goal of becoming ‘virtually integrated’ business (Koehn, 2001).
This means that the customers, suppliers and the business are pooled together such that activities are conducted in real time basis. The aspect of selling directly to customers enables Dell to gain knowledge of customer’s preference and needs. Feedback after a direct sale acts a source of information about design problems consequently leading to improvement of company’s products.
ASUSTeK Computer Company participates in improving its products so as to meet individualized needs of the customers. This is evident with advent of new multimedia notebook and other products. Infiltration into foreign markets like China in addition to joint ventures with international business is a move towards realization of goals through strategic marketing and planning. As stated earlier, ASUS entered into joint with several businesses including Huan Hsin Holdings and Giga Bytes Company limited.
Macro-environmental forces
These forces have its sources from outside the company. They comprise of factors that affect the running of an organization but cannot be controlled directly (Pride, 2009). The recent globalization is one of the macro-environmental forces affecting the running of business investment.
Globalization means that competition is stiff as more differentiated products enter the market. A company must make use of innovative marketing techniques in order to move with social, technological, political and economic changes. Dell and ASUSTeK Computer Company have a technical team mandated to research on the possibilities of introducing new products to match market requirements. Invention of multimedia devices and programs is actually a move towards countering macro-environmental forces.
Micro-environmental forces
These are factors which influence directly company’s strategies and they include: customers, employees, suppliers, shareholders, competitors and other internal factors (Pride, 2009). A firm can use these elements to formulate a workable marketing strategy after sourcing sufficient market information.
Marketing mix can be used by a firm to arrive at the best combination which will ensure that the customers are satisfied. In terms of positioning its sophisticated products, Dell utilizes numerous distribution channels available worldwide. Advertisement through print and visual media is part of the promotional strategy employed by Dell. The slogan ‘ Yours is here’ which was formulated in 2007 aimed at creating awareness that Dell manufactures and sell customized computers thus satisfying individual needs.
Dell kiosks available in many parts of United States are places where customers get a glimpse of various computer products and they can subsequently place an order. Joint venture entered between ASUS and DeviceVM LTD was aimed at capitalizing on new technology of Splashtop which allows a user to boot computers and access internet within the shortest time possible. This is a clear distinction of micro-environment formulated by ASUS to remain competitive.
SWOT analysis
This is the analysis of individual competencies by measuring, strengths, weakness, opportunities and threats (Kotler, 2009). It is the responsibility of the management to maximize on the strengths, reduce weakness, make advantage of the opportunities that comes along, and counter the impediments of threats.
Strengths
During their financial year ended July 2005, Dell registered more than 1 Billion Dollar profits translating to 28% growth. This growth is purely a result of its renowned brands. Direct sales to customers, use of information communication technology and maximum use of customer relation management assist Dell to capture on trustworthy customers. Another specific strength for the company is relatively cheap and readily available labor.
ASUS’S strong financial base is derived from manufacture and sale of computer related components and equipments. During the financial year ended 2009, its revenues amounted to TWD 667.7million. The strength of the company also lies on the many subsidiaries located across the globe. This company attracts many customers due to its standardized products which meets immediate needs of the customers.
Weakness
Existence of large product and component supply can cause failure in operation of Dell business investment. In the year 2004, several computers were recalled due to the likelihood that they could explode or cause some technical problems. Inability to change suppliers reduces the choices available to the company.
Usually Dell contracts with specific few suppliers which then increase the risk in case supplier defaults to supply or delivers substandard components. ASUS faces a weakness of penetrating markets where Dell has established itself. This is contributed by the fact that Dell has strong market defense mechanisms.
Opportunities
A change made in the position of a chief executive was an opportunity for the company to make more profits. Although Kevin Rollins came in as CEO, Michael Dell remained the chair person in the organization. Another opportunity for dell is the introduction of new products in the market as a diversification strategy.
Television set, printers and phone accessories are different categories of products at the exposure of Dell. Selling low price and rebranded PCs in US market is a move towards formulating new market segments. ASUS has an opportunity to enter rich nations located in the Middle East. This will lead to more revenue generation.
Threats
Competition is one of the biggest challenges facing dell in the global market. Apple and other new entrants contribute to stiff competition in the market. Even though Dell ventured into low cost markets i.e. Middle East, competitors still infiltrate such market segments. Fluctuation in the world currencies is another milestone pulling down the prospects of Dell. Recent recession saw frequent changes in the exchange rates. This is not a conducive environment for business as well for ASUS which depends on the global market.
Market segmentation
To ensure that all categories of customers were attended to, Dell made its market more homogeneous (Rainer, 2009). In the year 1998, most of the products were sold to businesses or government associations. Major part of the customers comprised of corporate sector that purchased approximately 1 million PCs annually.
This corporate lot bought PCs at the highest price level in the industry thus contributing to supernormal profits. Example of these corporate sectors include: Ford Motors, Toyota, Shell oil and Michelin. Sales to individuals and small businesses were conducted by phone or internet.
Dell customers utilized toll free line where they could call, place an order or get information about a product through fax. Payment was also effected through credit card.
In the international arena, call center with tall free lines were based in Europe and Asia. These centers were very efficient such that calls were rerouted to specific countries where customers could be attended effectively. An example is a call from Kenya which is rerouted automatically to US for an English speaking sales representative. Dell also conducts its sale activity via internet.
ASUS Computer Company managed to sell its products to different customers after deriving different market segments. This company serves both individual and corporate sectors with a bigger proportion of sales contributed by firms. Pricing strategy helps to differentiate the markets for ASUS products.
Normally, corporate sector purchase product at a higher price level compared to small scale retailers and direct consumers. Supply of new netbook is part of the segmentation strategy where individuals are differentiated from the business world. Netbook was a very effective invention for the business fraternity since fast internet access enabled spontaneous placing of orders.
Target markets
Both print and visual media has been used by Dell to reach specific class of customers. Graphics used in advertisement takes into consideration the audience. To capture the attention of college students, Dell gives detailed specifications about the product which in real sense meets the needs of the student i.e. high internet interactivity. Online marketing by targeting specific corporate world and monitoring the results of an advertisement is an inclination towards reaching variety of market segments.
ASUS Computer Company is considering setting up markets in the sub-Saharan countries to capture the fast pace of socio-economic changes. Products manufactured by ASUS regard highly both younger and older population. PCs meant for the older class are simplified to ease its usage. The company also identifies the nature of young college students who value games and high mobility thus manufactures PCs and laptops to satisfy their needs.
Positioning strategy
This strategy allows a company to avail its products to a place where there is a proximity to customers (Dann, 2004). Advertisement, packaging, and distribution are critical factors to attain wider market coverage. Dell opened up Dell kiosks where customers could catch a view of various products before placing an order.
This is a good description of positioning strategy. Sales agents in various countries play the role of availing dell’s products to its customers. Display of beautiful models is a marketing approach utilized by ASUSTeK Computer Company.
Recommendations
Whilst e-commerce is the present approach to trade, Dell must consider advertising its products in an innovative manner. It is prudent to review marketing strategies in a continuous basis so as grasp socio-political and economic changes. Due to globalization effects, Dell and ASUS should establish more customer experience centers in African countries which are still in the verge of achieving its development goals.
Conclusion
Dell and ASUSTeK Computer Company are among the leading dealers in computers and its accessories. The success of these two organizations is credited to strategic marketing and planning initiated by the management. This is evident from analysis of segmentation, target markets, positioning strategy, and SWOT analysis of Dell and ASUSTek organizations. A recommendation made is for the companies to infiltrate African countries apart from Europe and Asia. This will expand market share of both organization.
References
Baker, M. (2008).The Strategic Marketing Plan Audit. Cambridge: Cambridge Strategy Publications
Dann, S., & Dan, S. (2004). Introduction to Marketing. Milton: John Wiley &Sons.
Koehn, N. (2001). Michael Dell,” in Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell. Boston: Harvard Business School Press.
Kotler, P., et al. (2009). Principles of Marketing. Sydney: Prentice Hall.
Pride, W., et al. (2009). Marketing: Core concepts and applications. Milton: John Wiley &Sons.
Rainer, K., &Turban, E. (2009). Information systems and the modern organization. In Introduction to information systems. New Delhi: Wiley.
ICT industry is a backbone for any sector in an economy. It is know for its competitiveness and innovative criteria. In the recent past, ICT industry registered a fast pace in invention and innovation while expanding in its market share. Its trend is towards high speed computers. This is evident by introduction of fiber optic.
Company back ground
Dell international company limited deals with information a technology and is based in Texas (Koehn, 2001). Its main are of operation is to develop computers, sell them and offer after sale services. Some of its products are: Latitude, Dell, Vostro, n-series and precision. ASUSTeK Computer Company is located in Taiwan and deals exclusively with computer products. Laptops, servers and motherboards are some of the products manufactured by the company
Strategic marketing and planning
This captures overall course of the business. It is involved with market segments, interests of the customer and the processes employed in purchase (Dann, 2004). Decisions about production, finance and human resources are involved in strategic marketing and planning. Dell Company has continuously built on its brands to suit the needs of the customer. Advent of new multimedia notebook and other products by ASUSTeK Computer Company is part of its strategic marketing plan.
Macroenvironmental forces
These are forces originating from outside the company. Both Dell and ASUSTeK Computer Company were affected by the recent world recession. The two companies made intensive advertisement and introduced new brands in order to outsmart its competitors i.e. Apple, IBM and Digital.
SWOT analysis
This gives details of the company’s strengths, weakness, opportunities and threats. Direct market approach used by Dell Company facilitates it to link up with a variety of its customers both corporate and institutional (Koehn, 2001). In addition, Dell offers price for performance, customer support service and customized products. Dell has a weakness of attracting college students. Its opportunity lies on building personal computers. The threat to the market is fast pace of developing accessories.
Market segmentation
This is dividing the market according to factors like: geography, demographic, psychographic and behavioral factors (Pride, 2009). Both companies have explicitly segmented its market while targeting different customers. Most of the young people are located in the urban centers. It is therefore important the companies avail its products within the vicinity of such a population.
Target marketing
Its marketing strategy is intensive advertisement and opening up of Dell kiosks in various countries. Dell Company has also exploited the use online marketing by targeting specific customers, tracking down the results of an advertisement and building relationship with advertisement partners. The company continuously introduces new products in the market to meet individual customer needs. Acer, Apple and Acer are among its competitors
ASUSTeK Computer Company is exploring on diversifying the market segment such that the product reaches several people within a short period of time. Furthermore, it uses target marketing after classifying the customers into young students and older generation. The products are tailored to meet their needs.
Positioning strategy
In order to reach specific target customers, brands must be advertised, packaged and distributed appropriately. Their prices must be affordable to the customer. Display of beautiful models is a marketing approach utilized by ASUSTeK Computer Company. Opening up of Dell kiosks is part of the positioning process.
Recommendations
Dell needs to make use of media in an innovative manner. Powerful promotions go along way in winning customer’s heart and ultimately making sales. More customer experience centers for both companies should be established in order to bridge the gap between the product and potential customer. It is important to expand on target audience so that new products can penetrate the market.
References
Dann, S., & Dan, S. (2004). Introduction to marketing. Milton: Wiley.
Koehn, N. (2001). “Michael Dell,” in Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell. Boston: Harvard Business School Press.
Pride, W., et al. (2009). Marketing: Core concepts and applications. Milton: John Wiley & Sons.
Dell is known for its innovative model of customized production (Holzner, 2006). In this model, a customer provides specifications of the kind of computer he or she wants and then the company tailors or configures production as per the order.
Therefore, there was no effort at standardization but rather building capacity to respond to customer desires, needs and interests (Holzner, 2006). The production process was informed by market dictates and individual customer preferences or desires.
Therefore, critical in the Dell design and supply model is being able to read customer needs and desires correctly (Holzner, 2006). Failure to capture customer needs or changing preferences and the model does not work.
To supply the computers, Dell unlike traditional distribution sought to eliminate all intermediaries thus being able to deal with the market directly (Holzner, 2006). To be able to deal with customers directly, production had to be decentralized thus; the company seeks to do the manufacturing close to the clients.
And given the products are customized to customer needs and preferences, for efficiency purposes, Dell has deployed just in time mode of production, which translates into lowering of costs related to storage or inventory management. This is very critical because it helps an organization to avoid all sorts of losses associated with parts breaking, depreciation and general wear and tear.
To deal with widespread customers and be able to configure products to their taste, Dell engages strategic partners (Holzner, 2006). While it does the general manufacturing process, the machine is configured within the proximity of the customer to take into account the needs of the individual customer.
The internet portal plays a critical role in enabling Dell deal directly with customers (Holzner, 2006). Further, through direct sales personnel or personal selling, Dell has been a model company in supply chain management.
Adoption of Dell Model in Auto-Industry
The auto-industry has largely been dominated by Fordism or Toyota model of production (Knights & Willmott, 2006). Fordism is anchored on traditional management theories or the scientific management theories advanced by Fredric Taylor, Henri Fayol and others(Knights & Willmott, 2006). Focus is on specialization, standardization, mass production and output based compensation (Knights & Willmott, 2006).
The Toyota model applied in auto industry employs the concept of batch production, which leads to more variations in models produced. If the auto industry were to take on the Dell Model, it would mean that focus becomes customization rather than standardization.
Secondly, the industry players would have to decentralize much of motor assembly and related configuration. Moreover, production would have to be backed by customer needs surveys rather than just producing a batch or producing massively and selling the new model of cars through aggressive marketing.
Additionally, the organizations would have to work towards eliminating as many intermediaries as possible to deal directly with customers. Like Dell, this would imply having to rely on information technology to get customer specifications and related feedback. Moreover, the auto-industry players would have to engage more of the direct sales approach to selling.
Through direct selling, the industry interacts at a more personal level with customers as opposed to receiving feedback from intermediaries. Where direct selling is not possible, then an auto-industry player is better placed instituting or engaging in strategic alliances or long-term agreements with few suppliers (Blanchard, 2007).
Long-term agreement with suppliers helps towards better control of the supply chain as opposed to encouraging competition within the supply chain.
When supplier compete in as much as it may increase efficiency, it may also compromise the organizations intent on dealing with customer needs and customizing products to their preferred specifications.
A Flow Diagram Showing the New Supply Chain Model.
Reference List
Blanchard, D. (2007). Supply Chain Management: Best Practices. New Jersey: John Wiley and Sons.
Holzner, S. (2006). How Dell Does It. New York: McGraw-Hill Professional.
Knights, D. & Willmott, H. (2006). Introducing Organizational Behavior and Management. London: Cengage Learning EMEA.
Dell is the leading manufacturer of computers and computer accessories in the world. It has experienced a market growth over the past one decade. Moreover, the firm currently trades globally. Besides its main specialization, the company produces various electronics, especially personal computers and accessories.
This growth has forced this firm to rethink some of the best ways through which it can carry out its activities to achieve the best in the market that is getting increasingly competitive. As Ryan and Lee (2009) argue, business automation is the best way that Dell could use to overcome the many challenges in the market.
Automated processes are very important to the firm. In other words, the firm could perhaps utilize automation technology to increase its competitive advantage. The emerging technologies are very important, as they have made it possible for firms to computerize most of their processes. This has enabled such firms to cut operational costs (Curcin, Ghanem, & Guo, 2010)). In this article, the main interest is to determine the best-automated processes for Dell’s marketing department.
Automated Process at Dells Marketing Department
The marketing unit of Dell has the toughest task in the organization. The task of ensuring that the firm remains competitive in the face of stiff market competition is not an easy task. This unit should therefore consider automating some of the marketing activities in the organization.
One of the most current and very popular automated processes in the marketing department is the online marketing. This involves selling products through the company’s website. Amazon has grown into a big firm with one of the strongest brands in the market, having perfected the art of online marketing. Dell should therefore move from brick and moter selling strategy to selling through the internet. Product promotion would be done online and the sales process would be completed online.
The chart below shows the stages that should be taken by marketing department in order to make the process successful. It is important to note that all the units identified in the chart below are units within the marketing department (Huser, Rasmussen, Oberg, & Starren, 2011). They are sections of the marketing department and their heads/managers report to the marketing manager. Nevertheless, the accounting and finance units also report to the marketing department. Logistics unit is answerable to the Logistics Department.
Process: Dell Ordering, Delivery and Payment Process
Sales Unit
Sales Unit
Accounting Unit
Logistics Unit
Accounting Unit
Finance Unit
Receive the Order
Process the Order
Authenticate Payment Mode
Delivery of The Product
Generate Customer Bill
Collect Payment
The above chart is a computerized process of Dell Company that would enable the customer to receive orders, deliver products, and receive payment electronically. The process given above assumes that customers have knowledge of the products they need. Customers might have acquired product information from various promotional points that the firm uses.
Others might have prior knowledge as regards to the existence of the product, having purchased the product earlier. Moreover, customers might be aware of the existence of the product through friends and relatives. As such, the process starts from the ordering stage.
Order Receipt
At this stage, the sales unit is expected to receive orders from customers. Customers would place their bids and the sales unit would receive the bids appropriately. Because the entire system is automated, orders would automatically be given order numbers to help in the identification process.
The order number would be sent to the customer at the processing stage, which would still be done by another section of the sales unit. This section would first confirm the availability of the product and the ability of the firm to deliver it to the customer within the desired time before sending the order number to the customer, which in essence, is a confirmation to the customer that the order will be delivered (Hacking, 2011).
The accounting unit will have the responsibility of authenticating the payment mode proposed by the customer. This would involve confirming the validity of the card. Furthermore, the accounting unit would as well confirm the validity of the payment mode. This unit would then inform the logistics unit that the customer is in a position to pay and therefore products could be delivered.
The logistics unit upon this communication would pack the product and transport it to the location indicated by the customer during the ordering process. When giving the logistics the green light to deliver the goods, the accounting department would simultaneously generate a bill that would be attached to the product being delivered. The logistics unit would have this as the main document to be presented to the customer during the delivery process.
Upon the receipt of the product, the finance unit is expected to effect the payment of the products automatically. The system would then generate a cash sale receipt to be electronically submitted to the customer via the email. The complete transactional information for the entire product should then be submitted to the Marketing Manager who should then compile the process to come up with comprehensive details of the sales process.
References
Curcin, V., Ghanem, M., & Guo, Y. (2010). The design and implementation of a workflow analysis tool. Philosophical Transactions of the Royal Society A: Mathematical, Physical, and Engineering Sciences, 368(1), 4193.
Hacking, I. (2011). An Introduction to Probability and Inductive Logic. Cambridge: Cambridge University Press.
Huser, V., Rasmussen, V., Oberg, R., & Starren, J. (2011). Implementation of workflow engine technology to deliver basic clinical decision support functionality. BMC Medical Research Methodology, 11(43).
Ryan, K., & Lee, E. (2009). Business Process Management (BPM) Standards: A Survey. Business Process Management Journal, 15(5).
IBM endeavors to prepare a common size financial statement with the common size being on the total of each side of the accounting equation. On the income statement, each item is expressed as a percentage of net sales. This helps evaluate internal make up of financial statements (Forbes, 2011). The purpose of this type of accounting is to evaluate financial statement accounts across companies.
Over the years, IBM has witnessed an increase in its major revenue, indicating an increment in comparison to Dell. This could be attributed to the fact that IBM focuses mostly on major companies. Additionally, the company invests in IBM’s five major business services, namely: Global Technology Services, Global Business Services, Software, Systems and Technology, and Global Financing.
Global Technology services are the main income generators, most notably in 2010, and attracted a total of 39% of the company’s total revenue (Forbes, 2011). Software on the other hand accounts for the pre-tax income.
The most notable IBM’s software products are Tivoli, Lotus and Rational. Its research and development team has continually endeavored to provide the company with the best information as regards the markets of its products (Forbes, 2011).
This is arguably true as IBM’s mainframes have over the years been in the market and still present a profitable products line for the business, in addition to other personal computers and servers. In the information technology firms, IBM is still ranked high and is listed in Fortune magazine as among the world’s most admired companies.
One of its most identifying characteristic has been the zeal to invest in low-margin business; for instance the personal computer division that was later sold to Lenovo group and later focusing on more high-value products and services. Its most valuable expense in 2010 was the purchase of Netezza at $1.7 billion (Forbes, 2011).
Dell has not been doing badly either, although its revenue is far behind IBM’s. Its philosophy of actively managing demand in real time and selling what is has in its stores has ensured that the company soar to greater heights. If it relied on what it wants to sell, the company would have witnessed low profit margins than recorded (Dell, 2011).
Its success is further promoted by the fact that Dell’s customers are mostly the high-end buyers who adopt new technology, often making the market adopt new product life-cycle transitions (Dell, 2011).
Its profit margins have risen steadily and more funds have been directed into research and development for the innovation of more features. Additionally, its operating expenses have been on the rise perhaps an attribute of the global crisis that initially affected the market of all products.
The company’s manufacturing system has concentrated on the building products place orders, working closely with its major suppliers while concentrating more on consumer research to realize a flexible system. Most if its funds have thus been directed into research and development. The earnings from the shares cannot really account for much of the company’s income.
Thus it is agreed that the forecast accuracy in Dell could be around 70-75%, attributable to its careful accounts selection (Dell, 2011). The company’s management has over the years focused on the high-end products with a more prolonged shelf-life.
This, however, is mostly applied when the consumer market is highly unpredictable. Of the two companies, IBM is more successful and somewhat unpredictable in its development of new technologies.
Competition in the business environment continues to increase with the development of technology, increase in internet connectivity and expansion of the market bases. Several international companies expand their market bases and develop more consumer-friendly goods and services in order to cope up with the competition (Cory 46).
Several business ideas take centre-stage as businesses strive to remain relevant in the market under such circumstances. Companies continue to develop innovative ideas in the production sector to maintain their customer base as well as win the market bases of their competitors. In the wake of increased technological advancement and communication development, the pressure of maintaining the market bases keep rising in the business world.
Sustainability of businesses depends upon the ability of the firm to supply the right quantity of goods with high quality to the right customer base at the right time. For this reason, the competition in the supply chain of goods and services proves to be more vital in sustainability than the competition between individual companies.
Supply chain competitive advantage depicts the capabilities of a company to develop strong, sustainable, and defensible position over its rivals in the market (O’shannassy 175). In order to achieve this, there is need for adequate market information for the business entity to conquer the rivals. Numerous practices continue to arise in the competition sector as creative firms aim to stump their authority in the markets.
Dell Inc
With the aim of maintaining the market base, the company developed a mechanism of understanding the specificities of consumer needs and developing goods that are purely satisfy such needs. For example, the needs and demands for individual users of computers vary widely with the needs of computers for companies and other organizations.
Understanding the specific needs of each consumer group and developing computers and other electronic gadgets from those particular needs provide the basis for which Dell has a competitive edge over other computer application manufacturers.
Most multinational companies in the computer applications and electronic sector tend to assume that the needs and demands of their products are constant regardless of the part of the world they target. However, Dell understands that developing market demand statistics for a particular region in the world require an in-depth understanding of the consumer needs in such areas (Buchanan and Simmons 1).
In such context, the development of customized goods for the consumer becomes relatively easy given that they understand their demands and needs. Therefore, Dell enjoys more customer information thus improving its chances of consumer satisfaction. This helps in tightening the grip they already have in the market base.
Production of goods from Dell Company begins from an order by consumers. The production team receives an order and develops a document with detailed description of the kind of machine the consumer needs. In this document, the unique configurations and settings as per the consumers’ descriptions help in the assembly and manufacture of the good using Dell diagnostics.
This is contrary to other firms that manufacture their goods, send to the market, and let the consumers extract their needs from the company’s own configurations. In such a setting, the ability of consumers to enjoy the services of such goods greatly decreases, thus leading to low quantity of sales (Buchanan and Simmons 2).
In the Dell production unit, a system of aftersales service is in place. In case a good develops a problem, the buyer simply calls the company, and the production team draws diagnosis from the document developed when ordering the machine in question.
Buchanan and Simmons in their article note further that supply chain in the business world provides a great opportunity for profit maximization (3). In the liberal markets and the capitalist world, the supply of goods goes through a system of chains passing through several intermediaries before reaching the final consumer. If the number of intermediaries is high, the profit margins greatly reduce. For this reason, Dell has a fixed number of suppliers in the market. This helps in cost reduction thus leading to increased revenue.
IKEA
The Swedish largest furniture supplier IKEA was founded more than seventy years ago; the mission of this company remains the development and supply of cheap furnishings to consumers. In order to maintain the supply of cheap furniture to the large customer base, IKEA management teams developed several strategies.
For example, the use of low priced raw materials, the purchase of supplier capabilities, and development of strong supplier relationships form the basis for success of this firm. In the production segment, the firm replaced the use of more expensive oaks with the use of less expensive but high quality pines for teak woods. This helps in reducing the costs of production while maintaining the quality of goods produced (Buchanan and Simmons 4).
Consolidation of suppliers is important in the success of businesses. IKEA resorted to highly efficient suppliers of materials to engage in long-term business in order to reduce the cost of production. To enhance consolidation, Vietnam has been IKEA’s main source of raw materials for the production segments.
This consolidation of supplies ensures efficiency in the transport, procurements, and accountability in the raw materials sector. Even though the risks of engaging one supplier are high, the reliability of the suppliers plays an important role in the success of the business.
In the business world, building long-term relationship and partnership is basic for successful business life. IKEA enjoys this kind of relationship with most of the suppliers of the furniture they sell. Such relationships occur through great working partnership with the suppliers.
IKEA gives financial and business advice to their suppliers on how to find the best raw materials and produce at cheaper costs. Often the business firms would engage different kind of suppliers depending on the cost. However, developing a partnership in which one party engages in offering financial advice to the other on ways of minimizing costs is difficult (Buchanan and Simmons 5).
Most firms would consider this as an excess baggage in the production chain thus would opt out for established suppliers at relatively higher prices. However, IKEA enjoys providing advice to the suppliers on the best production methods and cost minimization procedures. In such situation, the suppliers often stick with IKEA leading to sustainability in the production and supply of furniture to the market.
IKEA also offers consumer choice production system. In the display segment, there exist catalogues developed in artistic designs of the trending furniture styles. Therefore, customers can enjoy the display and choose from the catalogue the kind of designs they need. It is from these choices that IKEA gives direction to the suppliers to deliver.
This method helps in reducing the number of in-store furniture displays. Similarly, consumers have the liberty to make choices of their preferred furniture designs rather than picking from the already manufactured designs available in the stores. This helps in consolidation of the customer base, as well as reducing the quantity of investment held by furniture at the display stores (Buchanan and Simmons 5).
The marketing strategy put in place by the company encourages consumers to spend more time in the showrooms thus increasing the chances of purchases. Having understood the consumer purchasing behavior, IKEA developed an aesthetic interior design with great ambience in which the customers enjoy a walk through. The arrangement of the furnishings and the furniture in the storerooms gives consumers desire to make more purchases (Torekull and Kamprad 247).
The store’s unique floor space plan encourages shoppers to walk through the entire set-up with ease. Similarly, children playgrounds fitted with toys and baby-sitting facilities are available within the stores. This ensures that parents have ample time to shop without interference from their children.
Most business firms do not offer such facilities, as they require more expenses. Clearly, this is a great step towards gaining competitive advantage over competitors. However, IKEA masters the needs and aspirations of different kinds of customers and puts them into consideration in the plans and designs of the store chains across the world.
Seven-Eleven Japan
Seven-Eleven is the leading retailer chain in food products such as rice balls, bread, pasta, and box lunches in Japan. Company has mastered the art of technology use, especially in the credit card and e-commerce sectors to boost their services to consumers. Customers can easily make orders via the internet and pay bills using the credit cards, thus ensuring convenience and efficiency.
This coupled with the fact that, Seven-Eleven offers its service on a twenty-four hour basis, the consumers easily access the goods at cheaper cost with ease (Buchanan and Simmons 5). The sustainability of this advantage lies upon the employment of efficient technologically well-informed experts to ensure success.
Given the high number of consumers in the market, the company’s ability to supply products as per the market demands becomes difficult. In order to counteract this, Seven-Eleven developed a high-level of manufacturer relationship, as well as supply relationships. Even though this meant sharing information with the supplier competitors, it proved successful in market conquest. Exclusive relationship between the company and vendors plays an important role in the market capitalizations.
With the aim of maximizing production and supply to the consumer, engagement with individual vendors became hectic and costly. The company, therefore, encouraged the vendor to form a cooperative society to consolidate the costs and revenues of the business (Buchanan and Simmons 7).
The Japanese Delicatessen Food Cooperative Society is responsible for focused working, improved standards of productions and protection of the vendors against other competitors. Putting together the work forces ensures quality and efficiency in productions and distributions of the food products to the customers.
Question Responses
In the current competitive business world, several companies continue to build competitive advantages over their rivals through the sales and distribution segments. The choices of supply chains and distribution channels help such companies develop high levels of consumer demand goods thus increasing their sales.
Most companies engage in understanding the common consumer trends and the dynamics with which they evolve in order to develop a successful competitive distribution channel (Johnson and Scholes 78).
For example, Dell developed a coherent position in the PC’s by developing a telephone-based sales and an order scheme; it aimed at replacing the traditional distribution behavior in which the consumer derived their satisfaction from the company configurations. With the ability of individuals and firms to receive customized PC’s the supply and sales by the company improved.
The common goal of the three companies in developing competitive advantage in the market is based on consumer satisfaction and understanding at all levels in the supply chain. Dell in its contexts ensures that the consumer, whether individual or firms, get customized computers and electronics. IKEA, on the other hand, understands the consumers’ needs in the markets against the costs incurred in purchases.
For this reason, IKEA chain stores have catalogues from which the consumers can pick their desired designs for manufactures. Seven-Eleven, on its part, draws the service of internet as consumers make online orders for the foodstuffs they need. All the services are interrelated and ensure that the needs and designs of consumers form the basis for the entire supply. These moves have helped the three companies to develop a sustainable competitive edge over their rivals in the market.
According to Klein (319), competitive advantages developed by companies ensure sustainable success if they maintain the trend into the future. For this reason, the firms that develop competitive advantages must come up with measures to ensure their sustainability. Market production and supply sustainability depends on the ability of the firms to supply quality goods and service to the consumers.
In Dell’s scenario, the market capitalization strategy enables the firm to supply more customized computers and electronic to both individual and firms. Similarly, the document developed at the reception of an order ensures ease of telephone diagnosis of problem in the gadget thus developing a sense of warranty.
IKEA, on the other hand, with an aim of developing cheap and quality furniture to its wide customer base, embarked on acquiring cheap raw materials from Vietnam (Torekull and Kamprad 249). This proves to be advantageous to the firm since it has been receiving cheap and quality pines for production. The ability to produce more furniture at relatively low prices provides a basis for more sales thus increasing the chances of business sustainability.
Diversity in production plays an important role in maintaining the customer base, thus ensuring sustainability of the competitive advantage. For instance, Seven-Eleven employs a group of innovative individual responsible for analyzing the dynamic needs of the markets to ensure that production remain relevant to the market needs.
Developing a variety of goods and foodstuffs plays an important role in the success of Seven-Eleven. When the first quality packed-lunch joined the Japanese market from the firm, profits rose as the customers realized the packed lunch offered the same quality as homemade lunch (Ishikawa and Nejo 37). The number of people heading back home during lunchtime decreased as more individuals in the working class embraced the Seven-Eleven box lunches.
Conclusion
Business entities must supply products and services that satisfy customers’ needs in order to survive and prosper in the business world, as well as survive competition from their competitors. The competitive advantage of a firm arises from the differences between the value it offers to the customers and the cost with which such values arise.
Competitive advantage arises if the customers develop a perception about the superiority of a product or service over similar services. In such a circumstance, the customers’ purchasing power increases. Similarly, competitive advantage may arise when a firm totals costs of production and supply falls below those of the average competitors in the market.
Works Cited
Buchanan, Lauranne, and Carolyn Simmons. “Competitive Advantage through Channel Management.” Thunderbird 1 (2004): 1-7. Print.
Cory, Henneth. “Can Competitive Intelligence Lead to a Sustainable Competitive Advantage?.” Competitive Intelligence Review 7.3 (1996): 45-55. Print.
Ishikawa, Akira, and Tai Nejo. The Success of 7-Eleven Japan Discovering the Secrets of the World’s Best-Run Convenience Chain Stores. Singapore: World Scientific Pub., 1998. Print.
Johnson, Gerry, and Kevan Scholes. Exploring Corporate Strategy. 5th ed. London: Prentice Hall Europe, 1999. Print.
O’shannassy, Tim. “Sustainable Competitive Advantage or Temporary Competitive Advantage: Improving Understanding of an Important Strategy Construct.” Journal of Strategy and Management 1.2 (2008): 168-180. Print.
Torekull, Bertil, and Ingvar Kamprad. IKEA: The Story of Ingvar Kamprad & IKEA, the World’s Leading Home Furnishing Company. New York: HarperCollins, 2005. Print.
It is worth noting that macro-trend analysis is usually the first step in making strategic analysis. The major aim of the analysis is to identify potential threats and opportunities to a business. The major question to be answered in trying to do such an analysis is “what are the probable implications that will impede the growth of a business and the likely impact of the things that affect the business growth?” (Tuthill & Smallberg, 1997).
Founded by Dell Michael back in 1984, the guiding principle for DELL was that if the company will manage to sell directly to customers, then it would be better placed to establish best strategies to meet customers’ demands and needs.
DELL is headquartered in Round Rock, Texas. The company develops, produces, sells and supports pcs servers, data storage devices, network switches, personal digital assistants (PDAs), software, televisions and computer peripherals. The paper describes the political, economic, social and technological factors that describes DELL’s macro environment.
Political factor
Ideally, doing business internationally calls for adherence of laws, rules and regulations of the host countries. Due to the fact that different governments have distinct way of doing business, DELL will be faced with both favorable and unfavourable laws that may foster or hinder marketing.
In regions where political stability has been compromised for instance Egypt, Libya, Ivory Coast and Tunisia where the company could probably expand their business to, will discourage such initiative. Where there are restrictive policies aimed at protecting domestic industries, the only option for the company is to partner with local business entities.
On the other hand, globalization has forced governments to do away with restrictions; this in the long run will work in fostering international trade from where DELL will benefit as it will reach the market areas that were initially harsh to do business (Tuthill & Smallberg, 1997).
Social
It is no doubt that the demand for computers as well as other related services largely depends on the level of education of persons in certain region. Governments have put effort in lace to foster education and knowledge acquisitions. This will in the long-term provide the company with a larger market.
Similarly, the current generation is IT compliant and have unsatiated demand for cutting edge technology, this group of persons when tapped properly by the company will ensure that their revenue grow as well as market base. The population size is also increasing and currently the world’s population is projected to clock 7 billion; this will provide a platform for the company to broaden it market base.
Economic
The fluctuating nature of currencies coupled with unpredictable financial crisis pose greatest threat to DELL. Individuals who are not able to pay cash for computers have turned to paying through instalments. Economists have predicted that the growth of the industry in the next five years will be 10.0% this will give DELL an avenue to increase their market share (Menon, et al. 1999).
Technology
According to Mullins & Walker, 2010 cutting edge technology is the way to go in the present world of doing business. With technology, the company can utilize it in marketing which in turn will tremendously reduce the cost of marketing hence increasing profits.
The internet will offer a good platform to ensure that the company’s name is always in public domain. New innovations will make it possible for the company to develop new products and services that meet their customers’ needs.
One major problem with technological innovation is the cost of installation. Additionally, the trend clearly depicts that an innovation thought to be the ultimate solution today is rendered absolutely useless tomorrow due to the pace of innovation and creativity.
Some market areas for instance China where the internet is fully controlled by the government brings another challenge. For this reason, position of computers is much less important to consumers (Mullins & Walker, 2010).
References
Menon, A. et al. (1999). “Antecedents and Consequences of Marketing Strategy Making”. Journal of Marketing (American Marketing Association) 63(2): 18–40.
Mullins, J. & Walker, O. (2010). Marketing Management: A strategic Decision Making Approach. New York: McGraw-Hill.
Tuthill, B. & Smallberg, D. (1997). Creating Worldwide Software, Second Edition. Mountain View: Sun Microsystems Press.