Using outside manufacturers is also likely to mean

Info icon This preview shows pages 7–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Using outside manufacturers is also likely to mean the company 'will not be able to operate on inventory that is as thin as it is in PCs,' says Charlie Kim, a consultant at Bain. Company executivessuggest that once manufacturing volumes reach a high enough level, Dell is likely to start production itself. Also, while the cost advantages may be less in 'back-end' activities such as production and sourcing, the real opportunity for Dell in consumer electronics lies in the 'front-end' marketing and sales area, says Mr. Milunovich. 'There's a big chunk of money to be taken out of distribution' he says. Whether Dell can take advantage of this opportunity with its direct sales system will be the second big challenge. Retail stores suit consumer products best becausethey bring an instant mass market and let users test the look and feel of products, says Mr Clarke. That is particularly important for products such as television sets, which buyers want to see, or handheld devices, which they want to pick up, say rivals. 7 P.T.O.
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Dell executives retort that similar doubts were once expressed about its efforts to sell PCs online, and that its early sales of personal digital assistants suggest that consumers familiar with the quality and style of the company's PCs are willing to buy other items online too. The third test will be whether the Dell brand and marketing approach can be adapted to suit the new market. High name-recognition helps, but will get Dell only part of the way. 'Everyone knows who Dell is-but it's still a PC-focused brantd,' says Mr Kim at Bain. For a company that still relies heavily on selling to corporate customers this will pose a big challenge. 'I,Ve're very humbled by the fact that there are virtually no other companies that are both consumer and enterprise brands,' says Mr. George. He adds, though, that the basic attributes of the Dell brand-with its connotations of a certain level of value, quality and service- should extend across both types of market. Overcoming obstacles such as these will stretch the Dell model in ways that it has never been stretched before. Questions (u) MIhy were the issues facing Dell Computers described as strategic ? (b) Identify examples of issues that fit each of the different levels of strategy ? - o O o - I MS-11
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern