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WA303 Assignmnet

Planning and Control

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Table of Contents

Pg no Topic S.no

4 Introduction 1.

5 Dell Company Background 2.

6 Dell's Environment

PEST Analysis

SWOT Analysis

3.

9 Importance of Dell to monitor and adapt to the changing environment 4.

11 Relevant Marketing Strategy 5.

11 Further Examples of Strategies of Dell building marketing strategies

because of the changing environment

6.

12 Conclusion 7.

13 References 8.

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Introduction:

Why it is important to continuously monitor and adapt to the environment in order to identify

opportunities, threats and to build a relevant marketing strategy for Dell.

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Dell company background

Dell is an American multinational information technology corporation that develops, sells and supports

computer and related products and services. It was founded in 1984 by Michael Dell. It is a public limited

company that sells its shares on the stock exchange i.e. about 3.5 million shares of company stock. Dell is

also one of the leading sellers of computer goods worldwide that has captured more than 15 % of market

share globally.

Their product line includes of desktops, servers, laptops, peripherals and workstations.

Some of Dell's largest competitors existing in the market are Sony, Hewlett Packard, Toshiba, Asus, Apple,

Acer etc.

Objectives of Dell:

To make sure that:

The products that Dell produces meet its customer's standards.

The response time of inquiries and requirements should meet the needs of customers.

The company should always maintain sufficient profits.

Mission of Dell:

To be the most successful computer company in the world by delivering the best customer experience to the

markets served by Dell by meeting customer expectations of: highest quality, leading technology,

competitive pricing, individual and company accountability, best-in-class service and support, flexible

customization capability, superior corporate citizenship and financial stability. (Reviewessay,2011)

Vision of Dell:

It's the way Dell:

Do business

Interact with the community

Interpret the world around us by knowing customers' needs, the future of technology, and the global

business climate.

Whatever alterations the future brings Dell's vision; it will always remain a guiding force in order to meet

customer's satisfaction and to become the most successful computer company and that also requires the need

of up-to-date technology and loyal customers.(Reviewessay,2011)

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EnvironmentDell's

It is made up of forces exterior of the boundaries which can make an impact. As the forces alter over time,

they create either opportunities or threats. Businesses do not exist in isolation, but works with the whole

environment in general.

External Environment

It is an environment that consists of all outside organizations and forces that have potential interests or which

can impact the organization's ability to achieve its objectives.

It consists of:

PEST analysis

The environment of Dell is affected by bodies that directly or indirectly affect the ability of an organization

to get a preferred result, according to Kotler and Armstrong “marketing environment consists of the actors

and forces outside marketing that affect marketing management’s ability to build and maintain successful

relationships with target customers” (Kotler & Armstrong, 2003). Therefore, it may generate both

opportunities and threats for the manager.

Political

The political environment of the business is crucial in the operating of any business in order to

achieve its strategic goals. It may include the government regulations or the legal issues under which

the company operates. In politically unstable countries for a company like Dell, even if the company

operates production facilities or export its products, they may have to take into account the restrictive

policies as they help to protect local businesses and manufacturers that hinder foreign companies

from entering the local market. But the computer industry sees more opportunities in countries with

no restrictions and offering free trade like China.

Economical

The growth of economical environment is affected by the economic situations of the specific country,

influencing the purchasing power of customers, causes fluctuations in exchange rates, interest rates

or inflations rates which in turn affects the profitability of the business. Software piracy is a huge

threat faced in China although they have many economic opportunities but they lack skilled labour,

so the computer companies like Dell have to offer the Chinese consumers a low priced system.

Social

The social environment deals with society's attitudes and cultural values.The level of education is

increasing, as more people are getting educated and also the demand for computers is increasing.

Also, these days' children are getting prone to the use of the computers from a very young age which

opens up opportunities for computer companies like Dell, illustrating that in the near future people

will hardly live or work without using a computer. Therefore, this will allow Dell to increase its

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brand image, increase purchasing power of the customer and allowing it to get easily adapted to the

trend and the environment.

Technological

Introduction of information technology has changed the world into global village. The computer

technology brings a lot of opportunities to for advancement in technology; it facilitates manufacturers

like Dell to enjoy good quality and low cost advantage in order to offer innovative products at

competitive prices. In China the government's key resource used to be allowing permission of access

to technologies built by institutions but in the later years it was seen that China’s annual

manufactured computers made millions and became the third largest in the world. It brought great

opportunities for technological businesses like Dell to get their name into the public domain and also

an efficient approach for customizing services according to customer segments but as the use of

Internet was costly, it was a threat faced by Dell China.

SWOT analysis

It is a strategic tool that evaluates an organization's strengths or weaknesses (internal environment) and

opportunities or threats (external environment) in order to assess and develop a plan for moving forward.

Strengths:

They are referred as the business's resources and capabilities which helps to gain competitive edge.

E.g. of Dell strength :

One of World's largest and well known computer making brand that offers their customers with products,

services and support through multi channels like on site, telephone, internet etc.

Weaknesses:

They can be referred as the non existing strengths.

E.g. of Dell weakness:

As Dell build computers and not develop them so they highly rely on the suppliers which may cause great

troubles in quality, manufacturing and services.

Opportunities:

According to the analysis of the firm's external environment, new opportunities for profit and growth may be

created.

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E.gs of Dell opportunities:

Using diversification strategy by introducing new products like printers, LCD television, security

devices, softwares, broadband etc.

Advancement and Improvement in technology to create new products, new market segments and to

enhance the manufacturing process in order to decrease the overall cost of production.

Keeping up with the rapid changing industry by continuously creating innovations in order to gain

competitive edge.

Backward and forward integration that may result into increased quality and service and lower cost.

Keeping the leadership at low cost is also an important opportunity for the company.

Threats:

When changes to the external environment are made, a firm may face threats.

E.gs of Dell Threats:

Existence of other competitors and new entrants in the computer market may make it harder for

Dell to sustain its market share.

Aggressive marketing done by competitors

Rapidly changing technology

Recession and change in exchange rate of other countries and change in government policies and

regulations, tariffs etc can pose huge threats for the company.

Due to the identical prices set by rival firms, the difference in price may no longer be an concern

for the consumer and may switch to competitor's brand rather than waiting for customized

computers offered by Dell.

As the rate of growth in computer industry is falling down, so if today Dell owns huge market

share, tomorrow if the demand falls then competition will become more intense and Dell will

have to work harder to differentiate its products from the substitutes available in the market in

order to keep holding a significant amount of market share.

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Importance of Dell to monitor and adapt to the changing environment

Dell's environment has become too complex due to increased globalization and therefore should be

understood properly to run the business smoothly. It may refer the surroundings on which the business

functions and the environment encompasses of political dimension and cultural and environmental aspect.

The business should analyze the consequence of the dimensions and customs of getting adapted to the

environment for the long term survival and always remain profitable. Dell's environment consists of all the

external bodies that effect the operating of the business. The factors of business environment are mostly

external and are beyond the control of individual industrial enterprises .Also; it can either pose a threat for

the company or may offer huge opportunities for exploitation of the potential market.

(rightwingpolitics,2011)

A business like Dell adapts its environment for survival and its role in the society is crucial as it supplies

goods and services, opens job opportunities and puts in for the economic growth of the country. It important

that the business survives as its success alters to better economy and increases the standard of living of

people in the society. Dell environment may consist of: Political, Economical, Social or Cultural,

Technological, Legal, International or Organic factors. (rightwingpolitics,2011)

All businesses are usually affected by its environment; it also affects the external forces. The environmental

forces are dynamic; they keep varying along with the business. Dell may not be able to change its

environment but among other businesses, it can mould the environment in its favor. (rightwingpolitics,2011)

Dell may get benefitted in a number of ways after doing a through environmental study, which may consist

of the development of broad strategies and long-term policies, developing action plans to deal with

technology advancements, to foresee the impact of socio-economic changes at the national or international

levels on the firm’s stability, analysis of competitor’s strategies and formulation of effective

countermeasures and to keep oneself dynamic. (rightwingpolitics,2011)

Also, it may be important to adapt to the changing environment to identify opportunities and threats in order

to:

Achieve Business Objectives

If Dell gets adapted to its environment it can meet its organization's objectives. These objectives may

include: profit maximization, growth, power, employee satisfaction, outstanding quality of products and

services, increased market leadership, joy of creation and service to society.

Improves process of making decisions

It's vital to understand the way economy functions in order to improve the process of making decisions by

Dell. This can be done by analyzing the economic environment, to see how it acts as an external constraint

.Therefore, it requires understanding of the external environment to get adapted to the environment. Getting

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adapted to the political environment will allow the organization to make decisions according to the current

political environment and the organizations won't fail to comply with laws and regulation thus avoiding legal

actions (e.g. losing company license).

Product Development

The products and services of Dell should be developed in line with the cultural environment in place, legal

or political mandates as well as economic bindings. E.g. In technology industry such as of Dell, it's very

important that the Dell computers in Middle-East should support the language Arabic and incase if the

business wants t to update their products version, it should such type that is accepted culturally. Also, getting

adapted to the political environment is essential for a product to get developed and the companies should

develop products that are legally acceptable.

Staff motivation

Businesses usually prefer recruiting employees from the local market as they already understand the

environment and may adapt to it quickly. The most important thing is cultural dimension, the managers

should be able to understand cultures that govern the domestic people and then develop strategies that may

suit best. The Managers should try to shape the skills of the employees to those that suit best to the business

standards. Also, considering the political environment the managers should choose to motivate their workers

in a way that does not go against the legal rules and regulations.

Competition

In order for a business to compete with other businesses it should first be able to understand the environment

and then get adapted to it, to ensure its long term survival in the market. Also, such firms can effect

addressing of barriers to entry in the political environment.

Business Growth and Investment

Proper investment and business growth refers to the essential features that help a business get adapted to its

environment. In this case of foreign investors the economic environment plays a vital role to successfully

discover business opportunities and to ensure growth.

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Relevant Marketing Strategy

It is a strategy that is designed to be relevant to current environment. It may help a firm to adapt to the

environment when creating a marketing strategy.

Few examples of relevant marketing strategy of Dell China that may bring opportunities or threats are:

In China, the government promotes national Computer vendor to foreign companies. Also, there is a

lot of red tape involved in securing government contracts and the government treats the domestic

companies favorably. Due to the restriction on the use of internet by the Chinese government, the

internet growth is another threat to Dell.

There is high potential for the growth of internet in China, which gives a foreign company like Dell

the opportunity to develop into a new market. A company like Dell should be aware that in Chinese

culture, customers are yet unaware of card sales due to the vast cost of the computers so DELL

should instead make investments in services like face to face or door to door to increase consumers'

faith and trust in their company.

Use of internet brings all companies an opportunity for publicity, and it is also a rapid way of

tailoring services according to their customer's segments. A threat to Dell may arise in the

technological segment as accessing internet in China is expensive.

To increase the market share, Dell invested its capital into equipments that produces higher quantities

of their products relatively at a lower operating cost and selling the products cheaper with lower

profit margins to China, India, Vietnam and the other third world countries.

Dell is getting famous in China and the key to its strategy is a domestically designed computer called

SuMa and it hopes to take sales away from the home grown powerhouse. Already Dell has built its

manufacturing plant in Xiamen, South Eastern coast of China in order to promote the next day

delivery to other 400 cities which is one of the companies.

Dell in China is planning to dispose the low priced entry level market and instead strengthen its

position in the mid market. This change portrays that the company is confident about its position in

the market and doesn't require competing with other local brands.

Further examples of Dell building marketing strategies because of the changing environment

Dell reveals new business strategy for the technological environment, i.e. creating opportunities for the

B2B internet related market in order to grasp the opportunity to build their internet capabilities and

increase market share.

The CEO of Dell, Michael Dell summarized the strategy by saying, "We are combing Dell's Internet

expertise, and our unique ability to organize resources around distinct needs to create new Web-related

capabilities. The Dell advantage is based on direct relationships, low cost, speed to market and e-

commerce expertise as much as it is on Internet hardware, appliances and customers services and

support." (Dell, 2000)

Also the strategy included 'Service Provider Direct' a three tiered package of service, support and co-

marketing programs designed specifically to benefit ISPs, ASPs and Web hosting companies and the

current program users include Exodus Communications Inc. , NaviSite Inc. and Corio Inc.

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Dell also reveals new business strategy for both the technological and the cultural environment by adding

additional services like infrastructure computing, it’s a power app appliance servers that are designed for

specific internet structure tasks like web serving, caching and load balancing. Therefore, as the

consumers are more educated and aware of customer services they appreciate solutions of full range

server and storage for the internet infrastructure buildings.

Conclusion:

Therefore, it's essential for Dell to monitor and get adapted to its environment in order to survive, identify

opportunities and threats and to improve leadership skills i.e. the business supervisor can prevent from using

improper tactics for a specific atmosphere which suits one or more atmospheres. PEST and SWOT analysis

plays a major role in the process and helps an organization (Dell) to build relevant marketing strategies. In

order to build good relevant marketing strategies, the managers should remain flexible and inclined to

discover or join new spots. As the globalization is increasing and environment is getting complex the

business should not be resistant to transform.

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References

Book:

1. Kotler, P., & Armstrong. (2003). Prinicples of Marketing. USA: Pearson.

Websites:

2. Anton. (2011). Dell Pestle Analysis.[online].Available:http://essays24.com/Business/Dell-Pestle-

Analysis/30307.html [30th

July 2011]

3. Reviewessay.(2011).Dell mission and vision

statements.[online].Available:http://reviewessays.com/print/Dell-Vision-Mission-

Statement/37379.html [24th july 2011]

4. rightwingpolitics.(2011).Adapting to business environment: Importance

Analysis.[online].Available:http://www.rightwingpolitics.us/2011/02/adapting-to-business-

environment-importance-analysis/[1st

August 2011]

5. Bahsin.(2011).SWOT analysis of Dell.[online].Available:http://www.marketing91.com/swot-

analysis-of-dell/[31st July 2011]

6. Dell.(2000).Dell reveals new business strategy.[online].Available:http://www.internetnews.com/asp-

news/article.php/336641/Dell+Reveals+New+Business+Strategy.htm[2nd

August 2011]