DELL. INC E-Commerce

COMPUTER APPLICATIONS TO BUSINESS – IICAB - II

PROJECT REPORT

TITLE OF THE PROJECT

Bachelors in Business AdministrationDepartment of Business Administration

Project AdvisorMuzammil Ahmad Khan

Faculty MemberIQRA University

Submitted By:SOHAIB BIAL 253

SYED SHARIQ PERVEZ 255KAZIM KAZMI 340

DEPARTMENT OF BUSINESS ADMINISTRATIONIQRA UNIVERSITY

FALL SEMESTER, DECEMBER 2012

COMPUTER APPLICATIONS TO BUSINESS – IICAB - II

DELL. INC

PREFACE

The purpose of this report is to find out how Dell Inc. is coping up with the e-business strategies

how they are marketing it and what theories they are using in practices. In this report we are

simply dealing with the impact of e-commerce and the payment methods what are their

marketing strategy and how they are offering technical support to the consumer and the suppliers

ACKNOWLEDGMENT

Thank You, Mr. Muzammil Khan (the instructor of the course titled CAB II), who gave me the

opportunity to present the knowledge, skills and practical know-how I learned in persuading this

course.

I have chosen to make a Project report on the Ecommerce system of DELL, Inc. The report as

guided by the instructor would help me in understanding the Ecommerce system in a practical

application.

The can facilitate the any to know how the Operations and Managerial world is related to the IT

applications and how the company like DELL is dealing with smart and updated technology to

cope with the demand of their customers.

INTRODUCTION TO GROUP MEMBER

Name of the Student: S.M Kazim Kazmi ID Number :: 340

Email Address: [email protected] Cell Number :: 03132064536

Name of the Student :: Sohaib Bilal ID Number :: 253

Email Address :: [email protected] Cell Number :: 03132816112

Name of the Student :: Syed Shariq Pervez ID Number :: 255

Email Address :: [email protected] Cell Number :: 0334-3815710

ContentsCOMPUTER APPLICATIONS TO BUSINESS – II...................................................................................1

Organizational Environment:.........................................................................................................................1

Long Term Objectives...................................................................................................................................1

Operating Environment..................................................................................................................................1

Remote Environment.....................................................................................................................................2

Functions........................................................................................................................................................2

Competitive Analysis:....................................................................................................................................3

Customer Support:.........................................................................................................................................4

Impact of E-Commerce on Dell core process................................................................................................4

Competitive Advantages................................................................................................................................5

Definable market............................................................................................................................................7

Identifiable Revenue Model...........................................................................................................................8

Dell Privacy security Policy...........................................................................................................................8

Privacy and Data Security..............................................................................................................................9

Internet Commerce.......................................................................................................................................11

Customized Experience...............................................................................................................................12

Web Beacons...............................................................................................................................................12

mailto:[email protected]

Third-Party Sites..........................................................................................................................................13

Children's Privacy (Age 12 and Under).......................................................................................................13

Other Web sites............................................................................................................................................14

Payment Methods.........................................................................................................................................14

Marketing Mix Strategy...............................................................................................................................15

Product:........................................................................................................................................................15

Place:............................................................................................................................................................15

Price:............................................................................................................................................................16

Promotion:....................................................................................................................................................16

Distribution Strategy....................................................................................................................................17

Government Regulations.............................................................................................................................17

Entry Barriers...............................................................................................................................................17

Target Markets.............................................................................................................................................18

Current Market.............................................................................................................................................18

Market Trends..............................................................................................................................................19

Competitor...................................................................................................................................................20

Online technical services and technical support..........................................................................................21

SWOT Analysis...........................................................................................................................................21

Strengths:.....................................................................................................................................................21

Weaknesses:.................................................................................................................................................21

Opportunities:..............................................................................................................................................22

Threats:........................................................................................................................................................22

Conclusion...................................................................................................................................................24

Executive summary:

Dell, Inc. is a global information technology company, which designs, develops, manufactures

and distributes computer systems. The company through its subsidiaries offers its customers a

broad range of solutions and services delivered directly and through other distribution channels.

It conducts its business activities through four global operating segments: Large Enterprise,

Public, Small and Medium Business, and Consumer. The Large Enterprise segment focuses on

delivering solutions and services through data center and cloud computing solutions to large

global and national corporate customers. The Public segment focuses on broad range of

information technology needs of educational institutions, government, health care, and law

enforcement agency customers. The Small and Medium Business segment focuses on helping

small and medium-sized businesses get the most out of their technology by offering products,

services and solutions. The Consumer segment focuses on delivering what customers want from

the total technology experience of entertainment, mobility, gaming and design. Dell was founded

by Michael S. Dell in May 1984 and is headquartered in Round Rock, TX

Computer Applications to Business-II

Organizational Environment:

Economic Factor

For Dell to penetrate into this market it must oust the Legend brand PC which is already a big hit

in China and therefore Dell has already built a factory in Xiamen, which is on the southeastern

coast of China. Dell's facility inside of China is a major step into the Chinese market. With this

factory in Xiamen, Dell can promote its next day delivery to 400 cities which is one of the

company trademarks. (Roderick) And Dells China market share has grown from near zero in

1998, to 4.4%. (Roderick)

Dell does not product and manufacture parts only, it searches and sets up long-term strategy to

accommodate global customers. More business and more production facilities will be opened

worldwide to adopt and globalization system and the global demand in the next decade.

Long Term Objectives Dell is starting to take on new projects like focusing on markets globally. Dells objective is to

take over 20% of the Asia market. The internet market has been expanding and exploding across

the globe. Dell knows that the way to globalize the company successfully is through e-business.

The greatest opportunities for future profits are in China. China has a huge computer market and

is growing fast. The main computer company right now in China is the Beijing-based Legend

computer. There are a lot of opportunities here for Dell because there is low penetration cost into

the Chinese market, and is considered to be the third largest in the World. Despite relatively low

penetration rates, China's $10 billion computer market is already the third largest in the world;

within in a few years it is expected to past Japan and become second only to the U.S. (Roderick)

The project that Dell is trying to take on is to advance into the Chinese market where they see a

huge potential increasing their revenue greatly.

Operating Environment

Consumers view Dell as a quality brand at a good price. Some consumers find that Dell's

competitors may be a little more expensive but still offer a quality brand the company plans to

launch a sales campaign –"Dell on Ice" – that will offer 15% discounts on its Blade Centre

system and on its x440 top-end Intel server. (Shankland). Dell ranks high with customers

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because the company offers free technical support if needed. The purchasing process has

changed for the consumers with Dell because all the ordering is done online which offers

convenience to its customers and minimize inventory.

The flow of materials from suppliers into Dell starts by the company putting in orders to

factories that are based on two categories. These two categories are product type and geography.

When putting in orders for product type Dell wants to select the right factory that specializes or

deals with a certain product. Geographic orders mainly focus on the where the order is coming

from to minimize the transportation expense. Michael Dell and his team have superb

relationships with their suppliers; they maintain those superb relationships, by ensuring that the

suppliers win every time Dell wins. (Rizzo) As a consequence, Dells suppliers are perfectly

willing to keep a truck load of inventory at Dells loading dock. (Rizzo)

Dell will go through some several changes in the next couple years to develop its system,

improve customer service, reduce cost, and improve supplier control. Dell will lead the

technology industry and be a good example to the competitors. More technology of software and

hardware will be available in the next couple years with less cost.

Remote Environment The internet market has been expanding and exploding across the globe. It has varied by market

segment and already has been a big hit in the U.S. Dell knows that the way to globalize the

company successfully is through e-business. Analysts agree that e-business is the most

significant trigger to the achievement of economic globalization.

FunctionsDell Computer Corporation is one of the world’s largest computer systems organizations. They

design, build and customize products and services to satisfy a range of customer requirements,

from the server, storage and professional services needs of the largest global corporations, to

those customers at home. They do business directly with customers, one at a time, and believe

they do it better than anyone on the planet.

Dell is considered an industry leader due to their large range of high quality products.

Dell PowerEdge servers, Power Vault and Dell | EMC storage systems and Power Connect

switches are superior building blocks for enterprise computing. Dell Precision workstations,

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OptiPlex desktops and Latitude notebooks meet the wide-ranging needs of businesses and

organizations. Individuals and small-businesses benefit from the high-performance and value of

Dimension desktops and Inspiron notebooks. Dell also offers printers, projectors, Axim

handhelds and other complementary products. And they support them all with a broad range of

services designed to help customers simplify complex computing.

In short, Dell is focused on delivering maximum performance with standards-based

solutions while ensuring the right mix of cost effective solutions with value at every level. Dell

is not just interested in low prices, but also in high-performance and solid reliability.

Competitive Analysis:The competitors to Dell are as follows: Hewlett-Packard, IBM, and Sun Microsystems

(Hoovers). HP and IBM pose the biggest threat in competition. Dell's sales overview has

increased each year except for 2001 to 2004. In 2001 the annual sales in millions were $31,888

and a major increase in sales in 2004 at $41,444.0. (Hoovers).

In terms of Entry Barriers, Dells direct to consumers sales approach has increased their sales

each year and they will soon be among their top competitors. Because of this approach, Dell has

entered into this highly competitive market in a unique way. The biggest entry barrier that Dell

has to face when entering into the technology industry is having customers gain the trust of

company over the more popular veteran computer companies. Nevertheless many of competing

companies use a range of different suppliers. Competitor Sun Microsystems annual sales are

lower than Dell's. They offer an online service where customers can order servers, and personal

computers. They differ from the rest of the organizations is that they do not use the Microsoft

operating system which is a weakness compared to the rest. Sun does not see Dell as a major

competitor, in obvious place of Dell; they see Microsoft as a major competitor along with

Hewlett-Packard and IBM.

This being said, Dell is performing in the right direction and sales are increasing dramatically

overtime as mentioned above, and the competition exist between the companies and that what

makes Dell unique. The increase in sales between 2001 and 2004 proves the success for

the organization.

Customer Support:

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http://www.123helpme.com/search.asp?text=organization

http://www.123helpme.com/search.asp?text=sun+microsystems

http://www.123helpme.com/search.asp?text=dell


Dell has created many features and services online to help the customer see the whole purchasing

process clearly. The premise of Dell’s business is selling directly to customers – customers tell

Dell exactly what they want and Dell provides them with the goods directly. As well as being

able to customize the product, customers can track the progress of the order as it is produced and

delivered. This can help the customer see the stages of the process and likely delivery times.

Customers can create and view their service records online. This includes product support,

shipment and delivery dates. Each purchase comes with a service tag code, which can track the

model bought and its service requirements. This allows Dell customer service representatives to

quickly and efficiently handle requests. This level of 24 hour customer service and fast response

time helps Dell build strong customer relations, which of course is crucial for the company in its

understanding of customer needs. It is also a very cost-effective way of providing sales and

support – cost savings which can be passed on in the form of better prices to customers. Success

depends greatly on the efficient management of the website. The customer must have a

convenient experience when shopping online and have faith that Dell will successfully complete

the order and safeguard financial details.

Customers need to be comfortable using paperless transactions without face-to-face contact. It is

crucial that customers consider purchasing online as an alternative to the traditional method of

going into a retailer and buying a product off-the-shelf. Dell is focused on enhancing its image

and relationships, not only with customers, but also with employees and the wider community.

To do this, the website is also used as a communication tool for news, press releases and general

information to help customers, employees, the media and prospective employees find out more

about the company.

Impact of E-Commerce on Dell core processWhen internet technology arrived, Dell was quick to set up the ecommerce processes that would

enable it to also sell directly online to customers. Selling online allows the whole process to be

automated and more efficient. Since 1996 when Dell opened its website www.dell.com for

ecommerce, the company has had huge sales success. By 1997 the company recorded $1 million

in online sales. By 2000 the company’s internet sales had reached $50 million a day! If we go

back to our example above, the customer, Liam, would go to Dell’s Irish website www.dell.ie to

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buy his notebook computer. The full product range is online with detailed information to help

him make his decision. He simply follows the easy, automatic instructions that come up on

screen. These allow him to customize the computer he wants with the features he needs. He can

increase, say, his hard disk space and see the difference that increase makes to the overall price.

Then he has given a variety of options on how to pay, either directly online or, via a customer

service operator. There is even an automated leasing option available through a financing

arrangement that Dell has here with Permanent TSB. Liam’s order is then passed automatically

through to the production department at Dell's factory in Limerick where it will be manufactured

to his specification, tested and shipped out to him. All of the systems relating to the sale are done

through e-commerce: order placement, order tracking, payment processing, inspection, testing

and delivery. Similarly, internally at Dell, the whole purchase and procurement of materials is

automated between Dell and its suppliers. At www.valuechain.dell.com, Dell shares information

with its suppliers on a

range of topics, including product quality and inventory. The crucial benefit is the total

automation of the whole process, which not only makes it faster and more efficient, but also

much more cost effective, especially given the volume of business involved. Dell’s global

website receives more than 1 billion page requests per quarter at 80 country sites

in 28 languages and 26 currencies. Dell’s approach to e-commerce simulates the benefits of face-

to-face contact between the buyer and the seller. This ensures that staff can be

focused on delivering a quality product and providing excellent customer service and support.

Competitive AdvantagesDuring the heyday of the technology boom throughout the 1990’s many companies experienced

enormous success for a few years, however without creating a solid internal framework many of

these companies did not survive. An exception to that business trend is Dell, which was able to

address its problems associated with rapid growth, and build itself into a lasting profitable

company. Dell was able to create this lasting profitability with three essential ingredients: 1.

“Virtual Integration” 2. Real value customer service features 3. Tailoring Manufacturing to

customer needs.

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In 1993 Dell reached a point where it had grown too large, without making the necessary internal

improvements to stay profitable. Dell reached a “Eureka” moment in 1993 when its cash flow

sank to $20 million, net income was negative $40 million, and its market share had shrunk

considerably. By bringing in several seasoned managers to focus on specific aspects of the

business Michael Dell hoped that Dell could become a synchronized, efficient, and profitable

business again. These improvements lead to Michael Dells breakthrough concept of “virtual

integration,” which goes a step further than traditional integration by connecting the right parts

together in the business.

From this concept three key integrations formed: 1. A symbiotic relationship between Dell and

its suppliers; 2. Customers linked directly to manufacturer; and 3. End user was linked to proper

customer service assistance. Each one of these measures enabled costs cuts; quicker deliver time,

and a more reliable finished product. For instance, with this new symbiotic relationship with its

suppliers allowed Dell to trim the number of suppliers it used from 204 to 47 in their Austin

facility between 1995 and 1998? These integrations caused the number of days a PC sat in

inventory from 32 days to 7 days. By customizing orders the customer received a product

tailored to their desires while Dell saved money and time on manufacturing.

Tailoring manufacturing to a customer's specific needs allowed Dell to integrate production

schedules with sales flows, assemble all parts of the PC on site, and install the specific software

that the customer requested. These manufacturing interactions sped up the final products

completion time to thirty-six hours. The swiftness of the manufacturing process added value to

the customer by quickening the delivery time. As well suppliers wanted to do business with Dell

because there inventory levels rarely piled up. The advantages in this chain of integrations added

value to the customer’s product, while also adding value to Dell as a corporation. Dell's

corporate value made it one of the best investments in the 1990’s.

Dell did something else other PC companies were not doing; strategically targeting only the

customers they wanted. By defining their customer as a ‘knowledgeable PC user’ Dell made

their task of providing a PC easier. Their customers did not need to go to a retail store to gain

knowledge about their product. This enabled the ‘Direct Model’ for purchasing PC’s to work.

Dell further expanded its ability to meet customer needs by classify customers into specific

categories. Customers were categorized into Relationship buyers, large businesses and

institutions, and Transaction buyers, small business and home PC users. The Relational buyers

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made up a significantly larger portion of Dell’s business but also had different needs than

Transaction buyers. Every relational buyer was assigned a representative who guided the

business and institution through each stage of the buying experience. By integrating both

Relational and Transaction buyers into their business system repeat purchases were quick and

easy, purchasing history could be consulted, and follow up customer service was able to be more

effective.

Dell’s business structure of “virtual integration” allowed it to excel in an incredibly competitive

industry. It's competitiveness in the industry resulted from a highly efficient business model that

sought out every opportunity to work more productively without compromising the quality of

their product. Production efficiency lowered cost which in turn provided Dell with larger profit

margins. As Porters Five Forces demonstrates, when bargaining power of buyers is high, the

potential for price battles increases. Dell combated failing into the trap of a price battle by

making a PC that was a better product than the competitors, yet near their competitor’s price.

There costs were able to stay competitive while delivering an exceptional product because their

business kept internal costs low, thus showing the effectiveness of “virtual integration.” Like

Honda, Dell was able to provide a technologically superior product at a reasonable price. As

well, Dell was able to evade a price war because its customers were aware of the technological

value in a Dell PC.

Definable marketThe computer market has various products which can basically be classified into

software and hardware categories where each are sub-divided into various product

segments. It is clear that Dell is focused on the computer hardware market where it

started with the desktop personal computer as its initial product segment. Further

product segments such as notebooks, servers and computer peripherals have been

added to its marketing mix as revenue increased. In addition, Dell has partnered with

major corporations such as Microsoft to ensure their products are equipped with the

latest software as per customers' needs.

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Dell mainly uses customer segmentation in its market strategy along with the product

segmentation where it is targeting several market segments and designing separate

products or offers for them. On one hand, geographically, Dell has segmented the

market into the US/Americas, EMEA and Asia Pacific-Japan where each area has

different pricing and marketing strategies. On the other hand, demographically, there

is no age, gender or race bias but income, occupation and education play a role in

deciding the customer needs and hence the product offer.

It is also worth noting that from a behavioural view, Dell focuses on the benefits

sought by consumers such as low price and good quality and service. It also carefully

selects customers with relatively predictable purchasing patterns and low service

costs, allowing itself an opportunity to develop a core competence in targeting and

keeping a specific database for target customers.

Identifiable Revenue ModelThrough sales they generate revenue.

Dell Privacy security Policy Dell respects your privacy. Across our business, around the world, we will only collect, store and

use your personal information for defined purposes. We use your information to support and

enhance our relationship with you, for example, to process your purchase, provide service and

support, and share product, service and company news and offerings with you. We do not sell

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your personal information. We only share your personal data outside the Dell family of

companies with your consent, as required by law or to protect Dell, its customers, or the public,

or with companies that help Dell fulfill its obligations with you, and then only with partners who

share Dell's commitment to protecting your privacy and data. At any time you may contact Dell

with any privacy questions or concerns you may have. You also may ask at any time to see the

personal data you have given us and request correction or deletion. We strive to protect the

security of your personal data by use of appropriate measures and processes.

Privacy and Data Security

At Dell, your right to privacy and data security is a primary concern. That's why, when you visit

dell.com, we help you maintain control over your personal data on the Internet. Below are the

guidelines we use for protecting the information you provide us during a visit to our Internet site

or when you use our online support offerings such as support.dell.com or support applications

loaded on your computer. Please refer to your warranty statement or Dell's Return Policy for

policies that apply to information contained on hard drives returned to Dell. Other Dell and Dell

co-branded sites may operate under their own privacy and security policies. Visit

http://www.nclnet.org/technology/essentials/ to learn more about how to protect your privacy on

the Internet through a consumer education campaign called Online E-ssentials, developed by

Dell in partnership with the National Consumers League.

Dell is a proud participant in the BBB OnLine® Privacy Program. The BBB OnLine Privacy

Program is backed by an organization noted for its expertise and experience in conducting

successful national self-regulation programs--the Council of Better Business Bureaus. The

mission of BBB Online is to promote trust and confidence on the Internet by advocating ethical

online business practices

Dell only asks for specific types of personal information

In a few areas on our Web site and online customer support tools, we ask you to provide

information that will enable us to enhance your site visit, to assist you with purchase and

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technical support issues or to follow up with you after your visit. It is completely optional for

you to participate.

For example, we request information from you when you:

1. Register on dell.com

2. Request a quote

3. Place an order

4. Provide feedback in an online survey

5. Participate in a sweepstakes or other promotional offer

6. Request e-mail notification of your order status (called "Order Watch")

7. Subscribe to a newsletter or a mailing list

8. Request assistance from our "Product Advisor"

9. Fill out a support request

Information we may request includes your name, e-mail address, phone number, address, type of

business, credit card details, customer preference information, customer number and service tag

number, as well as other similar personal information. Should you choose to apply for credit

through our financial service providers, we may also ask for your social security number and

other information to process your credit request. If we ever ask for significantly different

information we will inform you.

Dell only uses your personal information for specific purposes

The information you provide will be kept confidential and used to support your customer

relationship with Dell. Among other things, we want to help you quickly find information on

dell.com and alert you to product upgrades, special offers, updated information and other new

products and services from Dell. Agents or contractors of Dell who have access to your personal

information and prospect information are required to keep the information confidential and not

use it for any other purpose than to carry out the services they are performing for Dell. Dell may

enhance or merge your information collected at its site with data from third parties for purposes

of marketing products or services to you.

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In addition, Dell may be required to disclose personal information in connection with law

enforcement, fraud prevention, regulation, and other legal action or if Dell reasonably believes it

is necessary to do so to protect Dell, its customers, or the public.

You can opt-out of Dell's marketing list at any time

Periodically, we may send you information about our various products and services, or other

products and services we feel may be of interest to you. Only Dell (or agents working on behalf

of Dell and under confidentiality agreements) will send you these direct mailings. If you do not

want to be included on Dell's marketing list, simply tell us when you give us your personal

information. Or, at any time you can easily opt-out of Dell's marketing list or update your

information by clicking here.

Dell will not disclose your personal information to any outside organization for its use in

marketing without your consent

Information regarding you (such as name, address and phone number) or your order and the

products you purchase will not be given or sold to any outside organization for its use in

marketing or solicitation without your consent. Your information may be shared with agents or

contractors of Dell for the purpose of performing services for Dell.

Internet Commerce

The online store at dell.com is designed to give you options concerning the privacy of your credit

card information, name, address, e-mail and any other information you provide us. Dell is

committed to data security with respect to information collected on our site. We offer the

industry standard security measures available through your browser called SSL encryption,

(please see Dell's Store Security page for details on these security measures). If at any time you

would like to make a purchase, but do not want to provide your credit card information online,

you may contact a sales representative over the telephone. Simply call 1-800-WWW-DELL. It

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has always been a Dell practice to contact customers in the event of a potential problem with

your purchase or any normal business communication regarding your purchase.

Customized Experience

We use technology to help us deliver customized visitor experiences. At Dell, we primarily use

"cookies" to help us determine which service and support information is appropriate to your

machine and to maintain your shopping experience in our online store. Our use of this

technology does not mean that we automatically know any information about you. We might be

able to ascertain what type of computer you are using, but beyond that, our use of cookies is

designed only to provide you with a better experience when using www.dell.com. Dell has no

desire or intent to infringe on your privacy while using the dell.com site. For more information

about our use of cookies, please click here.

Web Beacons

We, or third parties acting on our behalf, may use web beacons on our site, in our e-mails, in our

advertisements on other sites, or in our advertisements in others' e-mails. A web beacon is an

electronic image that can be used to recognize a cookie on your computer when you view a web

page or e-mail. Web beacons help us measure the effectiveness of our site and our advertising in

various ways, for example, by counting the number of individuals who visit our site from a

particular advertisement or make a purchase from our site after viewing a particular

advertisement as well as by telling us when a web page is viewed and providing a description of

the page where the web beacon is placed. Web beacons also help us measure the effectiveness of

our e-mail campaigns, for example, by counting the number of individuals who open or act upon

an e-mail message, determining when an e-mail message is opened and determining how many

times an e-mail is forwarded.

The information we collect may include some limited personal information, and web beacons

allow us to recognize users by accessing Dell cookies. We may also combine the information

that we collect through web beacons with other personal information we have collected from

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you. We use all of this information to better tailor our marketing to you and may use this

information for other purposes, such as to enable a shopping cart, customize content on our

website and internal research purposes.

We do not allow third parties to place their own web beacons on our site or in our

advertisements. We will not share any personal information collected through web beacons with

any third party, except for service providers who act on our behalf and who are contractually

prohibited from any other use or disclosure of the information.

You can make some web beacons unusable by rejecting cookies.

Third-Party Sites

Please be aware that other web sites that may be accessed through our site may collect personally

identifiable information about you. The information practices of those third-party web sites

linked to Dell.com are not covered by this privacy statement. We generally use the "" symbol to

mark links that go to third-party sites.

You are solely responsible for maintaining the secrecy of your passwords or any account

information. Please be careful and responsible whenever you're online. If you post personal

information online that is accessible to the public, you may receive unsolicited messages from

other parties in return. While we strive to protect your personal information, Dell cannot ensure

or warrant the security of any information you transmit to us, and you do so at your own risk.

Children's Privacy (Age 12 and Under)

Dell takes children's privacy seriously.

Dell does not seek to collect personal information about children through its Web site. Dell does

not condition a child's participation in an activity on the disclosure of more personal information

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than is reasonably necessary to participate in the activity.

If we become aware that a person submitting personal information to us through any part of our

Web site is a child, we delete the information as soon as we discover it and do not use it for any

purpose, nor do we disclose it to third parties.

Since we do not seek to collect any personal information about children, and we delete any

information collected inadvertently as soon as we discover that a child has submitted it, we

typically retain no information about children that could be reviewed or deleted. If a parent

requests review or deletion of information about their child before we have discovered and

deleted the information, then we will of course honor that request.

Other Web sites

Dell's Web site contains links to other Web sites that are not operated by Dell. Dell is not

responsible for the privacy practices of the Web sites that it does not operate. Some parts of the

Web site are animated using various downloadable applications, such as Macromedia's

Shockwave/Flash. We also make video available through RealNetwork's Media-Player, and use

the video hosting services of Broadcast.com. Futures-Careers, Macromedia, RealNetworks, and

Broadcast.com operate under their own privacy and security policies, and the way they may

collect and use information can be

Payment Methods Credit/debit card

Pay with PayPal

Pay with dell business credit

Gift card

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Marketing Mix Strategy

Product:

Dell offers its customers a wide range of computer systems workstations, servers,

desktop computers and notebook computers as well as storage products and solutions.

Dell also extended their selection by adding computer hardware peripherals,

computer software as well as support services. Never the less, Dell does not

manufacture the components of its final products, but instead it relies on a number of

trusted suppliers who have convenient warehouse facilities within 15 minutes of

Dell's production centres. Analysts at Data monitor and Valanium associates have

been critical about this approach and considered Dell's dependence on third party

suppliers as a major threat to its long term success, however Kraemer and Tuckwell

have praised this cost effective approach and its positive impact on Dell's pricing

strategies.

Place:

The place or distribution channel is one of Dell's distinct advantages in their

marketing mix. This is because Dell uses a direct channel model where it sells its

products directly to the customer without need for a distributor or a middle man.

Though it initially started with selling products over the phone using a toll free

number that customers can call free of charge, they were the first to adopt advanced

technology and use the internet as a direct channel to sell its products.

The direct channel model enabled Dell to reduce costs and minimise inventories and

so it has been able to pass these savings to customers in the form of lower prices.

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Price:

Price is the amount of money charged for a product or service, or the sum of the

values consumers exchange for the benefits of having or using the product or service.

(Kotler et al., Principles of marketing, fifth European edition, p. 639, Pearson 2008)

In this case Dell provides high quality computer systems at the lowest price to match

the customer's expectation of value for money. It is also able to supply products at

low price by cutting out all costs of manufacturing parts as well as costs associated

with retailers and distributors.

As pricing remains a major factor in the customer's buying decision, Dell uses the

internet to get a reasonably accurate idea of the market's supply and demand, hence

reflecting on its price changes and promotions.

Promotion:

Promotion is the most important component of the four P's so it is crucial to

understand and be able to promote a product. Here it can be seen how Dell uses many

different promotional methods to market their products, such as advertising on

television, on the internet, in magazines and newspapers as well as direct mail ad

campaigns. It even uses sponsorships in professional sports as well as product

placements in films and television in the marketing techniques. Perreault et al suggest

that direct sales channels and direct customer relationship approach has enabled Dell

to fully understand its customer's requirements and preferences as well as to maintain

its competitive edge. (Perreault et al, Essentials of marketing, 12th edition, 2009)

It is clear from the above details that Dell's current marketing mix is one of the main

factors that contribute to its competitive advantage. The way the company is able to

use its marketing strategy should allow the company to leverage its competitive

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advantage in its core market segments. However, Dell should take advantage of the

market opportunities that could potentially increase the business revenue and

strengthen its market position. These opportunities will require changes in the market

strategy in order to fulfil the market demands, hence increasing profits and market

share. These suggested changes are further elaborated in the following section.

Distribution Strategy Direct modes in compressed product production lines, supplemented by online purchase at great

development of its direct sales model.

Government RegulationsOur business is subject to regulation by various federal and state governmental agencies. Such

regulation includes the radio frequency emission regulatory activities of the U.S. Federal

Communications Commission; the anti-trust regulatory activities of the U.S. Federal Trade

Commission, the U.S. Department of Justice, and the European Union; the consumer protection

laws and financial services regulations of the U.S. Federal Trade Commission and various state

governmental agencies; the export regulatory activities of the U.S. Department of Commerce and

the U.S. Department of Treasury; the import regulatory activities of U.S. Customs and Border

Protection; the product safety regulatory activities of the U.S. Consumer Product Safety

Commission; the investor protection and capital markets regulatory activities of the Securities

and Exchange Commission; and the environmental, employment and labor, and other regulatory

activities of a variety of governmental authorities in each of the countries in which we conduct

business. We were not assessed any material environmental fines, nor did we have any material

environmental remediation or other environmental costs, during Fiscal 2010.

Entry BarriersEntry barriers are unique for each industry and situation, and can change over time. Most barriers

stem from irreversible resource commitments you must make in order to enter a market. For

example, if the existing businesses have well-established brand names and fully differentiated

products, as a potential market entrant you will need to undertake an expensive marketing

campaign to introduce your products. Barriers to entry are usually higher for companies involved

in manufacturing than for companies that provide a service because there is often a significant

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expense in setting up a production facility. Another type of entry barrier is regulatory. To

produce organic food there is a three-year wait before land may be certified. During the waiting

period, producers must raise the crop as organic, but may not market it as organic until the three-

year “cleansing process” of the land is completedOvercoming barriers to entry may involve

expending significant resources over an extended period of time. Industries based on patentable

technology may require an especially long-term commitment, with years of research and testing,

before products can be introduced and compete.

Target Markets

Current Market

Dell currently has a number of computers that target 2 particular markets.

1. Large- to Mid-Size Business

– 36 to 50 year old

– White males

– Upper-Middle to Upper Class

2. Consumers, Students, Small Home Office


– White males

– Middle Class

The corporation markets certain brand names to different consumer segments. It Typically sells

the Optiplex, Latitude, and Precision names to mid and large business Customers, where the

company's advertising emphasizes long life cycle, reliability and

Service ability.

The Dimension, Inspiron, and XPS brands have an orientation towards consumers,

Students, and small home office environments, emphasizing value, performance and

Expandability (large focus in this consumer base).

Dell recently reintroduced the Dell XPS brand to target the lucrative gaming Market. Dell XPS

desktop systems use blue rather than the black cases found on newer Dell

PCs.

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Prospective Target MarketsOur team will refocus the advertising and marketing to target 2 particular markets.

1. Women

2. Minorities (particularly African-Americans, Latinos, and Asians)

Both in:

• Large to Mid-Size Business


– Upper-Middle to Upper Class

• Consumers, Students, Small Home Office


– Middle Class

We will stay in the same demographics for the business and consumer class as Dell is

currently pursuing. The only difference is that we will replace the "white male" in each category

with women and/or minorities. The reasoning behind this is that women are becoming equal

decision makers in the home and in business and minorities tend to show brand loyalty. Since

the components of Dell computers are similar to other PC manufacturers (because the

components rarely vary that drastically across manufacturers) Dell needs to build the current

customer base and maintain a strong customer loyalty.

Market Trends The market for laptop computers has distinguished itself as one of the fastest growing segments

of the computer industry. Throughout its growth and development, this market, like many others,

has changed a great deal as a result of customer demands. In an effort to cater to these demands,

companies like Dell look to market trends to aid in the development of new products. In its most

recent stages, the laptop market has been specifically influenced by number trends.

Generally, the overall market for PC's is being influenced by many of these trends. One in

particular, however, is affecting the market more than any other. Simply , customers are

becoming more educated about their purchases. Computers are being sold less to first-time

buyers, and much more to consumers who have purchased personal computers at least once

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before (Matching Dell, page 4). As an increasing number of customers become more

knowledgeable about computers, other trends are beginning to take shape.

As a result of this consumer education, buyers want increased customization of personal

computers. The growing amount of knowledge among consumers is creating the ability for

buyers to distinguish their own personal needs in a computer from a standardized product. This,

in turn, affects trends that are specific to the laptop market.

The laptop market is growing at a faster rate than desktop computers. This trend is being driven

by global integration and advances in communication technology. Customers are living more

mobile, communicative lives, and their computers must have similar characteristics that make

such activity not only possible, but also efficient and easy.

When it comes specifically to the product, customers are demanding increased portability and

durability from laptop computers. Driven by this new mobile lifestyle, customers want a product

that will be easy to move and difficult to harm or damage. This may include making it smaller,

lighter, and perhaps sturdier than previous models.

In addition to demanding more from the physical features of laptop computers, customers need

greater performance capabilities. Consumers need their computers to operate at higher speeds,

work with more memory, and to be easier to navigate than ever before. Computer users depend

more and more on their laptops to organize their lives and to hold vital information, and as a

result companies must work to provide them with the best technology available.

CompetitorDell's name rings from the desktop to the data center. The world's #3 supplier of PCs (behind #1

HP and China-based #2 Lenovo), the company provides a broad range of technology products

for the consumer, education, enterprise, and government sectors. In addition to its line of desktop

and notebook PCs, Dell offers network servers, data storage systems, printers, Ethernet switches,

and peripherals, such as displays and projectors. It also markets third-party software and

hardware. The company's services unit provides asset recovery, financing, infrastructure

consulting, support, systems integration, and training, as well as hosted IT services. Dell

generates more than half of its revenue outside of the US.

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Online technical services and technical support Dell companies provide online services and technical support is very broad, users answer

questions, the escalation on Windows, software upgrades informed, and so on. A wide range of

services not only to increase the intrinsic value of their products, can also be user satisfaction,

and enhance the competitiveness of our products.

SWOT Analysis

Strengths:

Some of Dell’s internal strengths that contribute to their success are the ability to act quickly,

customize, sell direct, and innovate. Dell has become the master of customization in the

technology industry. They are able to give all the power to the consumer, in regards to building

a PC, they are essentially a manufacturer for the consumer and will build any PC in the

configuration that is requested. Along with customization, directly selling to the consumer is a

large aspect of Dell’s strength in the computer industry. This direct selling has also assisted in

Dell growing to be a mammoth force in the industry through their low cost leadership. Another

strength that has helped Dell grow to a large company is their ability to act quickly in a rapidly

changing industry. Dell is able to implement the latest technology into their product due to the

strong relationships it has with its suppliers. Lastly, Dell has internal strength through their

ability to innovate. Recently, Dell has introduced new product lines such as printers, cameras,

PDA’s and more. This innovation is what helps Dell gain a large portion of the market share.

Weaknesses:

Even though Dell does have strengths that have brought them up from the bowels of the

technology industry, they are still prone to weaknesses and faults just as the other firms in the

industry are. One weakness is that Dell has no proprietary technology, which means that Dell is

basically just like all the other computer building firms in the industry. Dell is not creating

something based on technology that is exclusively theirs, but on technology that all the other

firms in the industry have as well. This is a weakness because it could allow other firms to come

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into their territory of low-cost leader and simply mimic their operations. Another weakness that

is identified in Dell’s operations is their high dependency on component suppliers. This is seen

as a weakness because if the supplier does not meet expectations then the operations of a firm

will suffer. Although this is one aspect of why Dell has become a low cost leader, it is not

necessarily a good aspect because the supplier can always flex some power by negotiating higher

prices or holding shipments.

Opportunities:

One very prosperous opportunity that Dell has is the expanded markets of Europe, China, and

India. Because of the large amount of technology that is concentrated in these markets, Dell

could use it to gain more market share over its competitors. Although these markets have

already been penetrated, Dell could still flourish with its low-cost leadership. Another

opportunity for Dell Computer Corporation would be growth in the business, education, and

government markets. These markets are growing at an exponential rate and Dell has been able to

claim some of this market share. For example, California State University San Marcos

exclusively purchases computers on an educational contract that the California State University

System has with Dell Computers. This contract allows CSUSM to purchase on a discounted

basis, which may seem as if it is taking profits away from Dell, and maybe so, but Dell is also

gaining through in-direct advertising. Thousands of students attend Cal State Universities and

many others work at them. The exposure that Dell is getting through these contracts is

phenomenal and is only aiding in their growth.

Threats:

One major threat that Dell has in their external environment is competition. The threat of entry

into the low-cost leading segment of the industry is very high. When looking at the basics of

what Dell is doing with their operations, it is not something that cannot be mimicked, herein lays

the threat. Because it is a basic strategy that many can copy, the threat that another company will

do something similar is high, especially after the success that Dell has had. Another threat that

Dell faces is overall instability in foreign markets. Because Dell is beginning to penetrate the

foreign markets and those markets are becoming a large source of growth, the activities in those

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foreign countries can present problems for Dell. For example, currency instability as well as

political instability in foreign countries could result in negative earnings for a given period, or

even worse, it could force Dell out of that market. Lastly, a threat in the home external

environment of Dell is the U.S. Government, which could pose tariffs on imports as well as

exports. This could drive up the cost of importing raw materials and also exporting the final

product to its foreign markets.

ConclusionDell has grown rapidly to become one of the top three vendors in the PC industry, and has seen

an extra ordinary increase in share price and market valuation. While many other PC companies

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have been unable to handle the demands of time-based competition, Dell has continued to thrive

in such an environment. The key to Dell’s success has been its direct sales and build-to-order

business model. This model is simple in concept but highly complex in its execution, especially

under conditions of rapid growth and change. Dell has continually rented and extended its

business model while striking a balance between control and edibility. Dell’s use of IT plays a

vital role in the implementation of its business model. The company has used IT to coordinate its

build-to-order processes from order taking through procurement, logistics, production, service,

and support. Doing so has enabled it to reduce inventory, speed up logistics and product cycles,

understand user markets, and offer additional services to customers. It also has used IT to

achieve virtual integration with suppliers and strategic partners by real-time information sharing.

The company has extended its reach to millions of potential customers at low marginal cost

through its use of the Internet. The resentments and extensions have been made possible by the

development of a novel IT structure that is expandable, and still adequately integrated to support

key corporate functions. Decisions about IT at Dell are subject to the demands of the larger

business strategy. IT is a key element of many business strategies, from using the Internet as a

marketing channel to giving suppliers a direct link to Dell’s information systems to being a

model for other enterprises to follow. In fact, Dell’s use of its own PC-based technology to run

much of its own business is a valuable marketing tool to show customers the capabilities of its

product line. It is very difficult to separate the impacts of investments in IT from other factors

such as changes in business processes, effective use of human resources, and general acceptance

of the direct model by users. Still, a close examination of Dell’s operations makes it clear that IT

is fundamental to the functioning of the direct model, and that IT has been a key element in the

continued extension of that model.

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