Category: Dell

Dell is undoubtedly one of the big and most prosperous companies in the world. It has evolved to set a precedent for decades and its milestones can never be underestimated. Started by Michael Dell, the company began in 1983 by selling desktops and has grown to become a leading supplier of computer systems.

The company is also well known for its cost effective and direct models that have enabled it compete at the highest level with other competitors. The company has however not had it easy in its endeavour to succeed as it has faced tremendous challenges that have at times led to decline in its revenue and growth. This paper therefore endeavours to provide an insight on dell with analytical and cynical view.

A critique is meant to affirm its weaknesses and areas in which it has failed to produce much of the impact with dell objective being to attain success by being a company that provides personal computers and also one that ensures their customers have had the best experiences with their products.

This objective at some lengths has been attained in the history of Dell where it led in periods of the 2000 up to 2003 as the biggest and worldwide firm of computers in both the U.S and other countries such as Asia and North America. The year 2003 saw Dell shift its focus to other hardware products such as ink jet printers that led to the company attaining revenues from other quotas.

The subsequent year of 2004 was no different as the company attributed its success to four strategic initiatives. These initiatives were driving the economic growth, having an improved customer relations, product leadership, and continuous winning ways of Dell. In 2006 however the company started facing tremendous challenges that stemmed from management.

At the time the founder Michael Dell had left the position of CEO to Kevin Rollins. The question then is why Dell started experiencing challenges that had grave effect on the financial performance of the firm. The company had declined margins of sale and received negative news coverage. These made it possible for the former CEO Michael Dell to resume office and try to get the company to its former glory.

It however had to surrender its leadership position to companies such as Apple and HP. Dell had exited from low end products hence making the competitors able to catch up and overtake them. The competitors had also resorted to same tactics of lower prices hence capturing Dell customers. The company therefore resulted in manufacturing so as to re-establish itself as a powerhouse.

The change in technology in the recent years has made it easy for corporations to produce Smart phones and tablets that have relatively taken control more than the laptops. This trend has seen a rise in the revenue of companies such as Apple that have embraced tablets and smart phones. Dell in recognition that computers are at a slower growth rate have come up with strategic plans to introduce low cost tablets.

This will enable the company to increase sales and be able to catch up and have an edge with firms that do not produce tablets. Dell intends to do these with the idea that there are about other 15 competitors. This will have to mean that they need to produce something that is different and gives customer satisfaction.

The tablet will have a state of art technology from advanced technology of windows 8 to cloud technology that enables users to save and transfer data. A microchip for increasing speed will be combined with a battery that is more efficient than the Dell laptops.

This strategic plan of Dell needs a lot of advertisements as it needs to make known to the market on how good and different their product is from the rest. Dell on this note intends to use the low cost tablet message so as to attract a large number of people who have paid a lot more for Apples Ipad. This will all be based on the premise that Dell has for years been the leader in terms of quality and affordability.

Dell intends therefore to apply the high value segment to penetrate the market and make a considerable impact. A considerable 40% of the total expenditure will be required to set up a place for the manufacture of the new product, which is the tablet. With the market growth rate being at 16.3% the industry seems to be in a cut throat competition with already established market that poses a great challenge to penetrate.

The company will have to utilize its strengths so as to make the product to have a lasting impression on the customers. Dell is a well renowned brand that has lasted for years and these can create trust to customers.

An excellent financial position and quality products are part of the advantages that it enjoys that can make it penetrate the market. Dell also has a strong management team that has made it possible to be renowned globally as both a manufacturer and a distributor.

However, Dell hopes to enter into new venture may be dealt a big blow if some considerations are not put into place. Its insistence of forecasting as a way of producing raises a lot of doubts and provides the possibility of inappropriate forecast that may lead to low production or excessive production. The changing trends of technology pose a threat to the existence of tablets and Dell as a company.

This is so because some products over time become absolute. The entry of other competitors in the same line of product will mean there is increased competition. This can even spill to these firms entering the market with low cost product that will mean that Dell product will lose considerable revenue.

Dell has depicted itself as a firm capable of providing the customer experience required and even capable of creating the so called “dell effect “. However, its lack of observation of the changing markets has made it lag behind other corporate that were behind them a decade ago. This revelation shows that it has indeed taken them time to study the market and realize tablets and smart phones were the current technology needed.

The fall of Dell in 2007 was disheartening but that should have built them to become even more powerful and more aggressive. Its strategic plan of a tablet is more of trying to capture a market that already has its owners. With Apple Ipad leading, Dell will have to contend with second fiddle as they try concentrate high value end. These may be downplayed by the fact that there is the Apple which provides quality.

With the ever looming threats of a new venture, Dell is aspiring to a venture that has risks and may be a failure. This though does not mean failing may be achieved but means that Dell have to put in more effort in convincing the customers to buy their products and further use their strong points to approach these new venture.

Introduction

Michael Dell, the proprietor of Dell Computers, has been one of the most successful entrepreneurs shipping computers and computer components directly to customers in different locations around the world. However, things have not been rosy of late. Many undertakings in the computer ‘planet’ have seen their market share shrink.

However, Michael Dell has put in place initiatives to reclaim its market share. Pundits have kept asking if Michael Dell will successfully turn around the company and return it to its former glory. This essay seeks to expound on the initiatives and design structures that Michael Dell has put in place to revive Dell Computers.

Organizational Restructuring and the newly hired Executive Team

Dell has hired Ed Boyd to be the Chief Consumer Designer at their Brent Humphreys outfit. Brian Gladden, the General Electric veteran, has come to Dell to take over as the Chief Financial Officer. He has brought in a wealth of experience from General Electronics. Garriques heads the consumer group. Garriques in collaboration with other divisional heads have taken charge of operations. This has ensured that Michael Dell is free to explore opportunities that may be lucrative to the organization (Edwards, 2009).

New Organizational Culture

Organization culture is a particular way of behaving. It encompasses the beliefs about the world. It has much to do with experiments and experience. Dell has had a culture where its products are delivered directly to their customers and the company’s Chief Executive Officer still maintains this will not go away any sooner. Dell has strengthened a culture where a direct sale of their products over the telephone and internet has been initiated.

The customer specifies the features that he wants to be integrated into his personal computer and effects payment using credit card before delivery is made (Gattiker, 1990). After the payment, the machine is assembled and dispatched to the customer. Dell Computers stock a large variety of key components (Golaleh and Merle, 2001).

This enhances wide choice of customer specifications. Components of Dell computers can be assembled in the least time possible before they are dispatched to the customer. This is called mass customization and helps in boosting consumer confidence (Tantoush and Clegg, 2001).

New Strategies to reach customers

The principal beneficiaries of Dell Products have so far been government agencies, home-based consumers, and SME’s. However, these customers have received less attention from Dell because the company focused much on bigger corporations. However, things are changing as salespeople are currently being offered incentives to offer all-rounded solutions to small and medium size companies other than hard wares.

This has been initiated by the head of the group, Steve Falice. Response to customer’s demands has also improved. Issues that are raised by customers are responded on promptly. Dell is also initiating integration as witnessed in circumstances when GA Communications Mac’s was integrated into Dell’s business initiatives (Edwards, 2009). They have also contemplated purchasing stakes from software providers VMware and Microsoft.

Moreover, their takeover initiatives are also done competently and with appropriate speed. Dell begun selling 0.39-inches notebook, the world thinnest notebook as soon as Microsoft launched its Windows 7 operating system. The notebook boasts of features like heat sensing strip.

This has sent shockwaves in the market and show people that Dell is up to revolutionizing the market. Apart from Adamo XPS, Dell is also considering introducing its smart phones in the market. Michael Dell still maintains that Dell will still sell computers directly to its customers

Reference List

Edwards, C. (2009). Dell’s Extreme Makeover. Business Week, 10, 1-4.

Gattiker, U. (1990). Technology Management in organizations, New York: Sage publications.

Golaleh, E. and Merle, J. (2001). Restructuring for agility at Volvo Car Technical

Service (VCTS). European Journal of Innovation Management, 4(2), 64-72.

Tantoush, T. and Clegg, S. (2001). CADCAM integration and the practical politics of technological change. Journal of Organizational Change Management, 14(1), 9-27.

Dell’s decreasing sales in a highly competitive market is an issue that needs to be addressed quickly by the company’s management. They need to find out specific improvements that need to be made to help the company achieve its objectives in the industry. In addition, Dell needs to find out if its distribution channels and strategies conform to general consumer purchasing patterns in different markets. The firm may be forced to look for alternative marketing and distribution networks to complement existing ones to help it increase its sales volumes in the market. In addition, managers in the firm should evaluate the performance of all products which the firm sells to find out how they contribute to its long term financial performance. This will enable the firm to find out if it needs to make upgrades to existing products to increase their brand value in the market.

Dell also needs to address its high expenses to enable it to compete effectively with other firms in the industry. Since the firm is highly dependent on personal computer sales in different markets, it needs to implement new production policies to cut on its high production costs.

The firm needs to outsource its manufacturing processes to Asian countries which have low costs to help it reduce its high operational costs. This approach will help the firm to focus more on its core functions to help it increase the value of its products in various markets they are sold in. The global technology industry experiences a lot of constant changes due to consumers’ shifting needs and expectations. Therefore, Dell needs to find out the manner in which various market trends are likely to impact on the performance of their products in different markets they are sold in.

Dell’s managers need to find out how its current research and development processes conform to its long term growth targets in the industry. This requires the firm to assess the viability of some of its current and future research and development projects. Moreover, the firm needs to link its R&D processes with other important functions such as marketing, manufacturing and human resource development.

This will enable the firm to develop business valuable business concepts which conform to its long term growth targets in the industry. In addition, the firm will be in a better position to anticipate and deal with different types of challenges that are likely to affect its financial performance in the market. As a result, the firm’s managers will be able to allocate resources appropriately to ensure the firm’s current and future needs are addressed.

Dell needs to restructure its operations to reduce the expenses it incurs on goodwill and intangible assets. The management needs to use alternative financing options to reduce the firm’s dependence on loans from external financiers. In addition, managers also need to find out appropriate ventures which the firm can invest in to strengthen its future performance in the industry. In addition, Dell needs to align its research and development processes to current and future marketing needs to enable it to satisfy the needs and expectations of its customers more effectively. Therefore, the firm needs to interact with its customers through different communication tools to find out how it can develop products which satisfy their needs and expectations. Consequently, this will improve the long term performance of the firm in the industry.

The report covers the developments, challenges, and strategies that Dell Corporation has adopted to maintain its top status in the U.S. computer industry. The authors provide an analysis of how Dell Company enlarged its supply chains, cut down costs, and engaged a team of competent management to outperform its main competitors in the technology industry for a long period.

In the report, the authors have clearly described the problem facing Dell, which concerns the company’s abrupt loss of customers and market share to its competitors. The loss of market share has been associated with the competitors copying Dell’s cost reduction strategies and supply chains.

The solution to this problem will not only enable Dell to win more customers but also revive its energies and regain its original top position in the PC industry.

The report examines how Dell Company’s success resulted from its ability to reach both the low income and high-income customers by expanding its outlets and making computers affordable and less technical to use. Dell had a policy of always seeking measures to reduce its production costs and listen to customers in order to understand their needs and obtain considerable market information.

Dell’s mantra states that the current company’s technology is its future commodity. Dell operates at considerably low costs and manages to hold low volumes of stock besides selling its products directly to consumers. The high-profit margins in Dell’s market segments give the company a competitive edge over its competitors.

Dell sells its products to governments and big companies in large quantities and at high prices; an aspect that places the company a step ahead of its competitors due to the high-profit margins and economies of scales. The authors have also stated the prioritization of customers’ needs, customization of products, and the expansion of service portfolios as the recent company’s resolve to tackle the emerging threats.

The report is clearly presented and provides an informative analysis of the strengths and weaknesses of the company. However, the report does not indicate the methodologies and techniques that the authors employed in coming up with the historical analysis of Dell Corporation. The industrial surveys referred to by the report are also not referenced or quoted in the report.

The report must be commended for its comprehensive analysis of the company’s marketing strategies and its recommendations. The recommendations provided by the report include expanding the company’s product line, charging competitive and affordable prices, enhancing marketing to reach the youth market, and opening a retail outlet stall.

These recommendations are adequate to restore the company to its original status, with the recommendation of raising prices to an affordable level being more successful than the option of lowering prices to outshine its competitors. Competitive prices act as an indication of quality to consumers and augment companies’ revenue margin.

Therefore, the new recommended marketing strategy is more effective compared to earlier alternatives since it is more concentrated and broad. However, the report did not provide sufficient recommendations about Dell’s long term problem of concentrating too much on data collection from customers rather than the alternative of relation-building that is advantageous.

This is an area where future reports should focus on and formulate appropriate recommendations to solve this problem. Nonetheless, the report is excellent, and the implementation of these recommendations can restore Dell to its original number one position in the computer world.

The company chosen for this analysis is Dell Inc., the USA Multinational Corporation, and its activities in the UK. The Dell Inc. headquarters are centered in Round Rock, Texas United State. Dell Inc. deals with selling, developing, and repairing computer and computer related products. It has managed to employ more than 103300 of workforce from various parts of the world.

The multinational corporation (MNC) model for companies such as Deal Inc. is centralized Hub (CH). In this model, the nature of the MNC tactic is based on principal control export, and the corporation implements group supervision while maintain exchange of information within the supply chains. The company understands that its triumph rests on the public and thus it emphasizes on export.

The function of the supply chain is to decide how the products reach the consumers. The company anticipates diverse barriers in a nation they want to start a supply chain of innovative and scale-exhaustive products. Besides, the companys philosophy stresses on cost improvement and value guaranteeing products, and the need of central control during product improvement, procurement, and manufacturing.

The Dell Inc. headquarters resides in the US, the home country, for authorizing the controls desired and building tactical judgments to the supply chain in other countries.

Analyzing the Strategies

In the UK, the market sale for the Dell Inc. products has continuously been reduced over the recent years. The reason for the drop is lowering the performance of the Dells Personal Computers and mobile divisions in the market. Most of the users of Dell products have changed their taste to emerging technologies of smart phones and tablets.

The producer of the best iPhone and iPads, Apple, aggravates this. Being Dell Inc.’s competitor in production of computer and computer related products, it is a threat to the company. Additionally, Apple has changed its aim to transforming community from using huge Personal Computers to using smart phones and iPads.

Consequently, Dell Inc. earnings dropped and the firm management lowered the targeted revenue. Besides, it lay off workers to cut a high number of workplaces, shut down some of its manufacturing plants and sold some of its financial services.

However, these cuts are not going to untangle its situation, as these strategies are not enhancing any creativity, hardworking, and innovativeness to Dell workers.

Political Environment Analysis

In the UK, apart from the normal political debates, the country has enjoyed peaceful moments for a long time. The political parties only differ in opinions but work together for the good of the country. Moreover, UK is safe from economic instability.

However, the economic growth in the UK has been low (0.2%). The country has not increased the number of job vacancies, as its interest rates are low. This has weakened its economy to an extent of affecting the jobs available, peoples living standard and business investments.

For the Dell Inc. to remain competitive in the UK market, it has to keep up with the technological innovations. New technology emerges within hours and Dell Inc. has to be aware of such technologies.

To counter the above effect, the Dell Inc. has diverged into software firm, data storage, and computer servers. Moreover, the Dells supply chain has changed from cost-efficient equipment they used to facilities for ordering customized products from headquarters.

Consequently, this will alter the Dell Company to a corporation offering value added services to its consumers on wider perspective and for a long-term basis.

Introduction

Dell Incorporation produces and sells computers and computer-associated equipment. This paper provides suggestions on how Dell can minimise its ethical problems and improve its agency relationships.

Under what conditions is it ethically defensible to outsource production to low cost producers?

Labour contracting is not a restricted word that is only understood by few United States multinationals because the technique also significantly concerns other employers; put differently, it is the association between United States companies and overseas suppliers in terms of company resolutions and control. Dell, a leading computer company, may attempt to take advantage of all the suitable features of globalisation, such as minimising the level of labour costs and staffing to obtain intellectual resources (Geis, 2007).

Moreover, Dell may want to acquire precious expertise from knowledgeable overseas employees and thus use less intellectual and physical efforts. In other words, Dell may attempt to achieve more for less. Therefore, Dell management may justify themselves for exploiting external expertise for the advantage of their company in a number of ways. In the report on its ethical responsibility, Dell may argue that it applies the electronics industry code of conduct to ascertain high working and ethical standards in all its operations.

Additionally, Dell may defend outsourcing its production to low cost producers from zones with lower labour costs, such as India, by claiming full compliance of the country’s ethical requirements. The managers may contend that they use contracting from these zones owing to lack of adequate casual workers from the United States and the United Kingdom (Ip, 2008).

Dell may also defend concentrating its production in regions with low labour costs by alleging that sourcing from a wide pool of countries enables the company to work with diverse people all over the globe and create an alliance with them. Another defence should be that every Dell supplier is obligated, by Dell contract terms, to function in total observance with the guidelines and regulations of the nations where it works and is mandated to implement and enthusiastically follow the EICC code of conduct.

Dell should mandate its suppliers to present the recorded confirmation of their assurance to put into operation its ethical supplier standards through a self-complacency tool. Moreover, Dell management may also justify themselves that they do not depend on self-audits of their offshore contractors as a proof of ethical compliance, but they also visit these offshore factories to assess the truthfulness of their ethical reports (Ross, 2007).

Most multinational companies in the UAE, however, are unwilling to train new members of Emirati staffs, particularly due to the comparatively small figure of educated Emirati; they thus simply shift employers. Citibank management, for instance, alleged that they would willingly hire Emirati if they had competitive proficiencies, work practices and the corresponding income expectations.

Michael Dell, Dell’s CEO, defended multinationals by claiming that an Emirati can cost a corporation 50 percent more than an expatriate (Carmel & Tjia, 2005). Additionally, many multinationals have to incur the costs of cultural adjustments as they endeavour to attract country nationals, such as Emirati. Abert Momdjian, the CEO of Calyon International bank, pointed that the bank may be forced to downsize to five-day working in a week from the normal six days and change to an 8 a.m. to 4 p.m. workday instead of calling for morning and evening hours.

Governance mechanisms review

Governance mechanisms refer to protective mechanisms that stockholders employ to keep in check and monitor the conduct of agents from going beyond the scope of their mandate. These mechanisms assist to ascertain that managers act in a way that is coherent with the best concerns of the stockholders. The governance instruments also help to adjust the interests of organisation executives with those of the shareowners.

This section considers the governing mechanisms employed by Dell Company stockholders to regulate the conduct and interests of its managers in the company’s business. Dell Incorporation should employ a board of directors at the heart of the company’s corporate governance structure. Dell’s board members should be directly elected by the company shareholders and under the company’s articles of association, they should thus represent the owners’ interests in the organisation (Ross, 2007).

The board should have the mandate to review all the corporate decisions made by Dell managers and ascertain that they are in conformance with the shareholders’ best interests. The company’s board should have the legislative right to employ, sack and compensate company staff, the company chief executive officer not being an exception. Additionally, Dell incorporation board should be responsible for ascertaining that audited financial statements of the company reveal accurate presentation of its financial position.

Therefore, the company’s board should exist to trim the information imbalance between shareholders and the executives as well as to check and regulate executive actions for shareholders. The shareholders should also employ independent auditors to act as their watchdogs in reviewing the credibility of the business’ financial statements.

The role of independent auditors should be to ascertain that the executives do not misrepresent the company’s financial information and that financial reports exhibit detailed and accurate data on how the management, the agents of shareholders, are running the business entrusted to them (Ip, 2008).

This system may, however, at times fail to work as envisaged in many companies. Notwithstanding that many companies register correct information in the financial reports, and even if most independent auditors review the reports professionally, there is significant evidence that the minority of companies have perverted the system assisted by the audits.

Additionally, stakeholders should possess some residual power of selling their stake in the company as one of the governance mechanisms against their agents, the management. When shareholders sell a great number of their stocks, the price of the company stocks will drop. When the share’s price of Dell declines significantly, the value of the company may be lower on the capital market than the actual value of its stocks.

This takeover constraint may restrict the scope of Dell managers to follow policies and make decisions that put their own stakes over those of shareholders (Geis, 2007). In case Dell management disregards shareholders’ interests and the company is acquired by one of the other leading information technology companies, such as HP Company, senior executive leaders typically lose their independence and, possibly, their positions.

How prevalent is the agency problem or threat of an agency problem in the UAE corporate environment?

While Dell Company’s agency dealings regularly work well in the corporate world, setbacks may arise when the management and shareholders have diverse objectives and when management takes actions that do not suit the interests of the shareholders, especially in the United Arab world.

Management can perform this since there is information unevenness between Dell stockholders and its management; management almost always have more information on the assets they are controlling than the shareholders do (Carmel & Tjia, 2005). The magnitude of Dell’s agency problems in the United Arab Emirates escalated in 2008 when a chain of scandals swept through the company, most of which can be ascribed to self-interest seeking senior management and inability of corporate governance systems to keep the management in check.

Dell Company’s subordinates manipulated data and distorted the factual performance of some units to inflate their pays, an issue that was hidden from the company’s shareholders. When such incidences are exposed to the public, they may damage the reputation of the company.

When shareholders are faced with agency problems, their duty should, however, be to shape the conduct of the management to perform in line with the objectives set by the stockholders, minimise information imbalance between them and the management and launch mechanisms to get rid of members who violate stockholders’ goals and mislead them (Carmel & Tjia, 2005).

In the UAE, Dell Company is experiencing the problem of persistent clientelism and frail judicial structures. Repeatedly, badly classified property rights tend to sabotage Dell’s efficient contract enforcement significantly. In the UAE, company ownership concentration is a universal phenomenon and company ownership spreading as in the United Kingdom and United States is an exception, not a decree.

Additionally, to expand the control over the company further than its current ownership, Dell can only boost its concentration further, through methods like dual class shares, pyramidal ownership arrangement and cross-ownership (Carmel & Tjia, 2005). Consequently, the major potential agency conflict in the UAE tends to occur between domineering Dell stockholders and minority domestic shareholders.

The other form of agency threat is the expropriation problem where the top managers and the stockholders frequently tend to deny minority owners and, at times, other shareholders, prevent the fair allocation of profit from company resources and divert it to their personal accounts.

Conclusion

It is apparent that over the past decade, Dell has recently set a great yardstick for other technology companies, in terms of ethical responsibility and good agency relationships. If the company can take into consideration the issues discussed in this paper, the results can not only boost the company’s ethical standing, but also its financial position to make it the best company of the twenty first century.

References

Carmel, E., & Tjia, P. (2005). Offshoring information technology: sourcing and outsourcing to a global workforce. Cambridge: Cambridge University Press.

Geis, G. (2007). Business outsourcing and the agency cost problem. Notre Dame Law Review, 1(1), 82-87.

Ip, P. K. (2008). Corporate social responsibility and crony capitalism in Taiwan. Journal of Business Ethics, 79(2), 167-177.

Ross, A. (2007). Fast boat to China: high-tech outsourcing and the consequences of free trade: lessons from Shanghai. New York: Random House Digital, Inc.

Introduction

Compensation is a systematic process of rewarding individuals after execution of certain functions that are delegated to them. It san important activity in any setting since it shows how well individuals are valued and recognized. As noted, compensation entails ensuring provision of fair and adequate remuneration to workers in an equitable manner. The process should be free from discrimination and it should be guided by well-laid parameters or key determinants that include academic level and experience. It ensures that employees receive what they deserve appropriately. Notably, every organization has a compensation strategy that enables them to pay workers fairly and adequately. The strategies also enable them to plan and reward employees based on their input levels in various business units.

Most companies have well written compensation strategies while others operate under work/ life compensation systems. These strategies are instrumental since they provide essential incentives that foster equality. These paper discuses the imperativeness of compensation practices and how the strategies influence decision-making. Conversely, it covers the impact of the strategies on performance in institutions. It adopts Dell Corporation as the company whose compensation strategy is under scrutiny. The company is adopted due to its exemplary performance and effective management of employees. It is also adopted to aid this study since it has experienced few industrial go slows over the years that shows how satisfied its employees are as compared to other companies. Thus, the study is to ascertain how well its compensation strategy is executed and key challenges that the strategy poses.

Description of the company and its compensation strategy

Dell Company is a renowned corporation that started its operations in the year 1984. The company was founded with a core mission to produce quality computers and electronic gadgets to satisfy consumer needs (Owen, 2013). Since its inception, the company has been recording exemplary performance. This is evident as depicted with its income base that stands at $102billion, its strong asset base, and profitability levels. Similarly, its effective management of employees has seen it improve on its productivity.

This is because it does not experience the effects of employee turnovers that have been impeding performance in most institutions (Owen, 2013). This was evident in 2006, when the company was one of the institutions awarded for retaining and nurturing employees due to better terms of work. Notably, the company’s exemplary capacity to manage the resources at its disposal including human capital has enabled it to remain very competitive in the electronic industry. It has a large market share that it has achieved due to the quality of its products.

The exemplary performance that the company has been able to record over the years from its first year of business where it reported over $73million is attributable to a number of reasons. Firstly, the performance is attributable to its effective operating strategies that foster innovation and creativity. Secondly, the company’s compensation strategy has been a critical pillar behind its good performance. The activity based compensation strategy that it operates under, has ensued that employees are treated with immense decorum and that their welfare are taken care of properly. For instance, the strategy has enabled the management to pay employees well and subject them to fair terms of work (Owen, 2013).

This has been raising their satisfactory levels that in turn lead to high performance. Thirdly, flexible organizational structure and effective communication channels has enabled the company to execute its activities properly. They have ensured that quality is not compromised through systematic awareness creation on stakeholder needs in terms of product features (Owen, 2013). They have also promoted communication between stakeholders especially investors whose input is vital for capital mobilization. The company has also been able to expand its market share since it provides quality computers that enable users to get up to speed solutions at their convenience (Owen, 2013)..

As noted, the company has a good compensation strategy that fosters fairness to stakeholders. The strategy that is referred to as activity based compensation practice was adopted due to its ability in ensuring that remuneration of employees are adequate and are proportional to each employees work. The strategy is preferred in most settings since it provides well documented guidelines by which rewards are determined. Under the strategy, managers of the company are able to apply proper benchmarks that guide salary value or amount that each employee should get.

Best practices the company applies and compensation-related challenges that it faces

Imperatively, Dell Company applies best management practices that ensure its sustainable growth. The management practices facilitate accountability and effective utilization of resources. This enables stakeholders who include employees and suppliers to benefit more due to the large pool of proceeds that are realized when finances are properly utilized. In particular, the company’s best practices revolve around operations, financial management, resource allocation and management of employee welfare. Firstly, the company has put in place favorable compensation strategies as a best practice to retain employees and ensure that they are satisfied. The practice is set with an aim of providing proportional remuneration to the work that is done by each employee. The practice has seen the company rise to higher levels because it is able to retain highly proficient employees.

For instance, best compensation practices have enabled the company to improve on its productivity levels for the reason that employees are willing to inject more effort. Secondly, the company applies favorable terms of work as a best practice including adherence to labor laws. It operates under favorable terms that enable employees to feel that they are part of the organization. In particular, the company gives employees many fringe benefits that are meant to motivate them and boost their morale. They offer them leave allowances, register them to pension schemes, good amounts of bonuses and subject them to fair working hours (Owen, 2013).. The management of the company does this in recognition that the employees are the company’s basic asset. Their contribution is significant in attaining high level of performance. Therefore, they must be treated with care and dignity as human beings.

Despite the noble gains that employees have been able to attain including the company due to its best practices, the company is facing some challenges that it must address. The challenges include the risk of operating under financial deficits, the risk of reducing its future expansion programs and the risk of loosing money. These risks may make the company face many financial complications since high spending on wages is becoming detrimental especially in the current society. This may be a problem since the company spends a lot on wages as compared to its competitors. This happens because it pays good remuneration, bonuses, overtime dues and other allowances. Therefore, the management of the company must consider reviewing some of the company’s policies to facilitate sustainability (Srivastava, 2008).

How the company applies compensation practice to determine the positive or negative impact to the company and its stakeholders

Indeed, activity based compensation system is very important in ensuring that fairness is observed when resources are being distributed to stakeholders.

It is also important in determining whether an institution and its stakeholders are impacted positively or negatively with the listing initiatives. This explains why companies that aspire to attract, receive positive results and retain their employees must the strategy to ensure effective management of its compensation practices (Srivastava, 2008). This is essential in enabling them to calculate employees compensations based on standardized figures or percentage values that are well defined. Imperatively, the compensation strategy that Dell company has adopted has enabled it to mange its compensation activities very effectively. It has also enabled the company to address employees’ non-monetary issues objectively and appropriately without experiencing any challenges. This is because the company applies the strategy professionally to address salary needs of individuals. Remarkably, Dell officials use the strategy to calculate rewards based on the key parameters that are used as guidelines. The parameters that include work experience, nature of work, job group and others help HR officials to remunerate each person fairly (Srivastava, 2008).

Ways in which laws, labor unions, and market factors affect the company’s compensation practices

According to Hitzeman & Hammer (2010), various factors affect compensation policies in most settings. The factors that are instigated socially, politically, and economically normally influence performance negatively or positively in most companies. This is evident since effective adherence to various legal requirements by companies earns them credibility and goodwill from stakeholders. Adherence to the requirements also enables most companies to benefit from stakeholders loyalty since they would feel valued. However, the regulations may also drive some operators out of business especially if they are not favorable. For instance, high taxation rates may make many companies incapable to continue with their activities. Key factors that are discussed in this section are business laws, labor unions and market factors.

Firstly, laws are essential rules that guide operations in various settings. Laws are set to ensure that sanity is upheld and that best practices are adopted at all levels in an institution. The laws also give clear guidelines on how companies should treat their workers and what is expected from workers (Hitzeman & Hammer, 2010). Particularly, they define recommended working hours, terms of payment or minimum and maximum payment standards, conditions of work and ensure protection of rights. Indeed, Dell Company that has been adhering to labor laws has been able to benefit immensely. The laws have enabled it to treat its workers appropriately and in turn get quality services including high returns. The laws have also been able to facilitate the implementation and designing of its compensation practices. However, the laws are threatening to affect the implementation of its working times. This is evident since the laws especially in US requires one to work specific hours as opposed to long times as the company’s management would want.

Second factor that has been affecting the company’s compensation plans is the labor unions. Indeed, the unions in US have been giving most companies including Dell sleepless nights. The unions in their clamor that they are protecting employees’ rights sometimes come up with demands that are considered unrealistic. This is apparent because they come up with demands that are unsustainable in most companies due to low economic capacity. For instance, in the 2012 labor unions were advocating for the minimum wage to be increased for all employees. The percentage increase that they were proposing of about 25% made many companies to start objecting their decisions. If such a move is adopted, then Dells compensation strategy and plan will have to be adjusted (Hitzeman & Hammer, 2010). This means that it will continue incurring a lot of wage burden in its already strained budged.

Evaluation of the effectiveness of traditional bases for pay at the company under study

The company has been using various payment bases for issuing rewards such as salary, bonuses, overtime payments, commissions and medical allowances to its employees who form its key stakeholders. Similarly, it uses various bases to pay its suppliers and settle its debts. The bases have been instrumental in promoting fairness to all stakeholders when payments are being made. Key bases that it has been using to compensate stakeholders include work experience, quality of work, output per day and level of professionalism. The techniques form the company’s traditional compensation bases that are relevant to date (Hitzeman & Hammer, 2010).

Notably, these techniques are effective since they take into cognizance all factors that affect performance. They ensure that the accrued benefits are divided in a systematic manner that enables stakeholders and the company to benefit. In particular, the company has been using output levels and position of individual including job group as bases for which employees’ salaries are being determined. The bases are fair and non-discriminatory since they ensure that every employee receives the right about of monetary and non-monetary rewards. Notably, these traditional bases have been used for along time and they facilitated fairness in most settings thus any institution that aspires to receive the best from employees or treat their employees well should adopt them.

References

Hitzeman, S. & Hammer, J. (2010). Marketing a Worker’s Compensation Practice —A Low Budget, Shotgun Approach. Web.

Srivastava, S. (2008). Compensation practices. Web.

Owen, K. (2013). Dell Inc.Company Information. Web.

Introduction

According to Osterwalder and Pigneur, a business model “describes the rationale of how an organization creates, delivers, and captures value” (14). Dell is one of the biggest multinational companies with 165th place in the ‘Global 500″ ranking (Dell’s Competitive Advantage & Strategy par. 1). One of the factors for the success of the company is the implementation of a direct sales business model. Direct selling together with building relationships with suppliers allow the company to regulate the correlation of demand and supply efficiently. However, with the development of the portable computer market, Dell lost its positions. The corporation had to improve its business model and shifted attention to “personalized and remote” customer services and introduced social media to its direct sales model (Dell’s Competitive Advantage & Strategy par. 27). In addition to traditional business strategies, Dell needs more investments in innovative technologies and learning to provide sustainable development of the company and its competitiveness in the market.

Ideation Process

Ideation is one of six business model design techniques. It is usually treated as “a creative process for generating a large number of business model ideas and successfully isolating the best ones” (Osterwalder and Pigneur 136). Dell, similarly to other companies, included ideation into its innovation processes. One of its aspects is crowdsourcing which makes the ideation process at Dell corporation customer-driven (Bayus 226). A method of generating ideas on open innovation platforms involves customers and other stakeholders in the process of the company’s innovative development (Hossain and Islam 613). However, discussions on such platforms need to be directed to result in ideas that can be implemented. A disadvantage of this approach is that it demands many resources from the team managing the platform.

Moreover, only three percent of such ideas are usually implemented (Hossain and Islam 620). Nevertheless, the IdeaStorm Platform managed by Dell is a tool that empowers communication with customers. It provides an opportunity to “understand various issues related to customers’ ideation and idea commercialization” (Hossain and Islam 620). For example, the ideas suggested at the platform and already implemented into practice include investment in mini projectors, children’s PC, rugged laptop for marine use, etc. (Bayus 228). Moreover, the ideas of preinstalled Linux, Ubuntu, or Fedora and multitouch screens were partially implemented, and more ideas are waiting for analysis and evaluation. Dell’s ideation process based on an online open innovation platform is still at an early stage but can become a powerful resource in the future.

Industry Analysis

Dell has been among the leaders of the PC industry for decades. Its outstanding supply chain management, focus on innovations, and direct business model provided the leading positions. After losing some market share, the company shifted its focus on the customers that led to sales improvement. Dell Corporation as an industry can be assessed based on Porter’s Five Forces Analysis (Pratap). The threat of new entrants in the PC market is not significant at the moment. Thus, Dell as a reliable brand has conditions for sustainable development. As for the bargaining power of buyers, it is evaluated as low to moderate (Pratap par. 5). It is conditioned by the fact that there are few powerful players in the PC market. The bargaining power of suppliers is also weak. It is the result of a big number of suppliers compared to the number of manufacturers. The threat of substitutes for Dell is moderate while the degree of rivalry in the industry is high.

Environmental Scan

All big corporations are expected to be environmentally concerned. Since industries usually have a negative environmental impact, attention to these issues is a demand of time. Dell states that thinking about environmental impact is a part of the company’s policy (Environment par. 1). First of all, the company focuses its attention on producing ecologically friendly goods. Moreover, Dell is known for its sustainability efforts. They are realized in the design of products, recycling, and other aspects. One of the company’s concerns is the reduction of its impact on the environment through the effective use of resources and waste management. Green packaging and shipping is another aim of the company together with involving recycling technologies for Dell products and packages. Apart from preventive efforts, Dell already fights the pollution by removing plastic from the waters and using it as material (Environment par. 7). Thus, it can be concluded that Dell is an environmentally responsible company that also contributes to its image.

Works Cited

Bayus, Barry L. “Crowdsourcing New Product Ideas over Time: An Analysis of the Dell IdeaStorm Community.” Management Science, vol. 59, no. 1, 2013, pp. 226-244.

“Dell’s Competitive Advantage & Strategy.”ToughNickel. 2015, Web.

“Environment.” Dell, Web.

Hossain, Mokter, and K.M. Zahidul Islam. “Ideation through Online Open Innovation Platform: Dell IdeaStorm.” Journal of Knowledge Economy, vol. 6, no. 6, 2015, pp. 611-624.

Osterwalder, Alexander, and Yves Pigneur. Business Model Generation. John Wiley and Sons, Inc., 2010.

Pratap, Abhijeet. “Porter’s Five Forces Analysus of Dell Computers.”Cheshnotes, Web.

Information about the Company

Dell Incorporation (Dell, Inc.) was established in 1984 as PC’s Limited by Michael Dell. By 1989, the company was able to “commence their business dealings across country boundaries” and soon afterwards “go outside of the United States to Europe, and the company was able to achieve $50 million of sales turnover” (Dissanayake, 2012, p. 27). In 2014, Dell, Inc. “shipped over 10.8 million units growing 8.5% on the year”, mainly in the U.S. and Asia-Pacific excluding Japan region taking the third position on a worldwide basis after Lenovo Group Limited and Hewlett-Packard Company accordingly and leaving Acer, Inc. and Apple, Inc. behind (PC leaders continue growth and share gains as market remains slow, according to IDC, 2015, para. 11).

Nowadays, scope of Dell, Inc. products and services includes business and consumer hardware (PCs and servers), networking and storage-related services, enterprise solutions and software technologies

SWOT Analysis

Strengths

• Customer-focused marketing strategy
• Product diversification

Since its foundation, Dell, Inc. announced “a consumer concentrated approach” avoiding intermediates so that “the company was able to pass the benefit to the consumer while reducing the cost of the product” (Dissanayake, 2012, p. 27). This unique customer-focused marketing strategy distinguishes Dell from its competitors by providing additional competitive advantages. Hence, Dell, Inc. has used direct sales channels (phone, The internet, and mail) to sell customized products and services at low prices.

After Michael Dell, the founder, and private equity firm Silver Lake Partners bought back Dell from public shareholder, new Dell’s strategy called Project North Star was announced: “to accelerate our solutions strategy and to focus on the innovations and long-term investments with the most customer value” (Dell, 2015). Hence, Dell’s shift to IT solutions and services will enlarge products range and attract new customers.

Weaknesses

• Product recalls
• Single supply chain

Dell, Inc. needs to improve its production quality control because when in 2006 the company experienced a battery problem with one of its product, “its poor reputation routinely contributed to the virality of angry blog posts and memes” (Dilworth, 2013, p. 27). Since it was impossible “to ignore the online howls of customer discontent”, marketing team had “to go out and participate in these forums that were just incredibly unpleasant” (Dilworth, 2013, p. 27).

Nowadays market trend has changed due to “demand for commoditized products, changes in customer channel preferences, emerging market growth, component cost declines, a more capable supply base and globalization” (Davis, 2010, p. 3). Since customers need cost reduced products and services fast, Dell, Inc. should “move from a single supply chain to a client segmentation supply chain approach” and develop “long-term demand sensing to continually refine its portfolio” (Davis, 2010, pp. 1, 4). Hence, Dell’s competitors have an edge in supply chains, so it should be improved.

Opportunities

• New target market
• Online customer service

An analysis of enterprises’ unmet needs and expectations revealed a new target market for Dell, Inc. The growing impact of “Big Data and public/private cloud services… on virtually every vertical industry” was detected (Hughess, 2013, p. 1). The new target market is connected with Dell’s core philosophy of developing strong customer relationships to help customers to cope with constant data volume increase. Therefore, Dell can now use “its services capabilities to help companies manage the complexity inherent in cloud migration, security/risk/compliance, and other transformational processes” (Hughess, 2013, p. 3). According Abraham (2012), “creating a new product for an existing market, which is also a product-development strategy” is an excellent opportunity for a company (p. 139). Although the new target market for storage services demands large investments, it will pay off by customers’ loyalty.

Geographically, Dell’s global presence in IT market is presented by the following figures: “9M Dell’s global PC shipments in Q2 2013 (Gartner)”, “11.8% Dell’s global market share in Q2 2013 (Gartner)”, and “$735.1B Value of global connected device shipments by end of 2015 (IDC)” (Dilworth, 2013, p. 28). Hence, new global B2B target market requires customer service to be always at hand. Nonetheless, new technology gives an opportunity for Dell, Inc. to be always online. Hence, Dell can change its customer service strategy by connecting “employees through social media training seminars… to engage with customers on their social pages, based on their role” (Dilworth, 2013, p. 28). This new 24/7 online customer service trend should be developed because it ensures customer’s satisfaction.

Threats

• Economic recession
• Foreign competition

Continued world economic recession affects all the industries including PC market with “a year-on-year decline of -2.4%” (PC leaders continue growth and share gains as market remains slow, according to IDC, 2015, para. 1). Although total shipments in 2014 “were slightly above expectations of -4.8% growth… the final quarter nonetheless marked the end of yet another difficult year – the third consecutive year with overall volumes declining” (PC leaders continue growth and share gains as market remains slow, according to IDC, 2015, para. 1).

However, Dell’s foreign low-cost competitor Lenovo Group Limited “continued to push hard in EMEA”, “outpaced the market in the U.S.”, and its shipments “reached a record 16 million units in 4Q14 with year-on-year growth of 4.9%, and annual shipments up over 10% from last year” securing the first place for Lenovo Group Limited in PC market five top vendors (PC leaders continue growth and share gains as market remains slow, according to IDC, 2015, para. 9).

References

Abraham, S. (2012). Strategic management for organizations. San Diego, CA: Bridgepoint Education, Inc.

Davis, M. (2010). Case study for supply chain leaders: Dell’s transformative journey through supply chain segmentation. Gartner Research, ID Number G208603, 1-11. Web.

Dell.(2015). Web.

Dilworth, D. (2013). Dell-ving into the future. DM News, 35(12), 26-29.

Dissanayake, D. (2012). Integrated communication, integrated marketing communications and corporate reputation: Evidences from Dell Computer Corporations. International Refereed Research Journal, 3(3), 26-33.

Hughess, P. (2013). Storage and data management services: Vendor profile. IDC, 1(243115), 1-7. Web.

PC leaders continue growth and share gains as market remains slow, according to IDC [Press release]. (2015). Web.

The DELL computer corporation has one of the largest assembly, production, and distribution chains for computer hardware and peripherals in the world, and these facilities can be easily utilized for the distribution, marketing, and sales of any new DELL products, including a hypothetical gaming system that it may develop.

In the global business and e-business environment, the DELL corporation has already gained a standing against its rivals for its product reliability, quick support, and service, and also its adaptability to the user’s needs. This backing of several years of being a well recognized and, to a great extent, a common household name will help immensely in the marketing of any future products launched by the corporation.

The sales opportunities in the business environment can be exploited by a sequential or phased launch of the products in different global markets planned to keep in mind the relative strengths and weaknesses of the corporation in a particular market and the current buying trends followed in the global markets. For example, the DELL Corporation has its largest distribution and supply chain as well as market share in the American markets followed by the European Markets, whereas it lags behind in the Asian markets, be they in China, Japan, or India, the same applies for the Eurasian markets of Russia. Thus, an optimal strategy would be to launch the product first in the stronghold markets like those of America and Europe, where the product is highly likely to be enthusiastically received and will be able to build a market reputation for itself against its competitors like the gaming consoles marketed by Sony or Microsoft. Once the product establishes itself as a strong contender against these rival products in the stronghold markets, and it gains the acceptance of the user community ( in this case, the gaming community), the positive publicity thus gained can be used to further market the product prior to its launch in other markets. For example, in terms of gaming, the Indian subcontinent closely follows in the footsteps of the American market and is likely to be influenced by positive reviews about the product from such a market. After a sufficient amount of such publicity, the product can be launched in these markets, and newer features such as more and more gaming titles can be offered to keep the sales high and the product loyalty at an optimal level. In certain cases, it is favorable to organize gaming contests at regional, national, and international levels to further promote sales in the case of a dormant market or to raise sales in an already favorable market.

The e-business environment can be used to optimize sales by marketing and publicizing the product through all the e-business channels already in association with the corporation, such as e-journals writing favorable reviews, publicity in various popular e-zines, and on websites. Lucky draws and online contests will promote the console even further and the sale of the gaming system and featured games online via already existing supply chains owned and operated by the corporation.