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Friday, April 6, 2012

Dell

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Michael Dell founded the mail-order PC company in 184


at the age of 1. The company emerged from an 18-employee


basement operation to the leading supplier of computers in


the world.


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Dell Computer Corp. thrived by using flexible


manufacturing and inventory management techniques to shave


costs while providing custom PCs with the speediest


delivery in the industry. Dells mission is to be the


most successful computer company in the world at delivering


the best customer experience in markets they serve. In


doing so, Michael Dell is quoted as saying they “will meet


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. Dell has a vision of excellence


through quality, innovation, pricing, accountability,


service and support, customization, corporate citizenship


and financial stability.”





This mission statement is clear and easy to


understand. Producing quality work that leads to the


achievement of these lofty goals becomes much more


complicated than writing a simple mission statement. One


thing is clear, the core capabilities of any business stem


from the employees that comprise it. With over 6,000


employees, Dell is a member of the rapidly changing and


expanding computer technology industry. This industry had


achieved enormous growth in the last decade.


As PC sales slow worldwide, the Round Rock, Texas-


based company has embarked on a broad campaign to gain


market share by cutting prices, according to analysts. In


the past, the company focused on keeping profit margins


high, leading to strong profitability, robust revenue


growth and relatively high average selling prices on its


PCs. Now, with the maturation of the PC market, Dell is


undercutting competitors in price to rapidly gain market


share. But the short-term cost to Dell could be high


reduced profitability. Analysts described Dells gambit


trading some profitability for big market share gains to


playing the board war game, Risk. By expanding its lead in


more markets or in Risk controlling enough countries, Dell


hopes to overrun competitors.


Dells pursuit of market share puts many competitors


in a defensive position, according to analysts. Dell has a


way of making life more miserable for people who are


already in a bad way. For example, when Compaq, HP or some


other company has a big inventory of imminently aging


equipment hanging in the wrong place, Dell has a habit of


dropping prices and making that inventory even more


valueless. Smaller companies will face even greater


problems and may have to face the ultimate question of


whether to continue to participate in the PC market. Far


worse for competitors may be Dells determination to


undercut them in price in higher-margin products like


servers and storage systems. The aggressive pricing


environment in PCs is now spilling over into the enterprise


market with Dell pricing its high-density rack servers at


sub $1,000 and NAS (network attached storage) products at 6


cents per megabyte, (1) Kumar noted. Whether Dells


market share gambit will pay off is uncertain, but many


Wall Street analysts like the companys strategy in spite


of lowered margins.


Dell, known for selling built-to-order computers


directly to buyers, is adapting an approach to tap the


consumer sector in China, one of the few healthy markets in


an otherwise ailing industry. Healthy Chinese computer


demand is helping Dell maintain revenue levels as prices


fall drastically worldwide. During the quarter ending


November , 00, Dell China unit shipments went up by 47


per cent as sales climbed 16 per cent in this strategically


important market. The achievements pushed Dells market


share to 4. per cent from .1 per cent in the same quarter


a year earlier, according to International Data Corporation


(IDC) Q 00 report. The aggressive pricing strategy has


helped Dell gain market share in China despite the global


slump in the PC market.


Dell has outperformed IBM as the leading foreign PC


vendor in China in terms of unit shipment in the third


quarter (Q) and is currently ranked fourth in Chinas top


10 PC vendors based on revenue and unit shipments.


Legend, Founder, IBM, Dell, and HP were the top five PC


vendors in China in the first half of the year, with Legend


having 0.1 per cent of the market. The top five foreign


PC vendors in China in terms of unit shipment also include


Acer, HP and Compaq. China is one of the few healthy PC


markets in the world for Dell, which is expecting strong


growth in the home PC as well as servers. Chinas World


Trade Organization (WTO) accession is definitely a good


opportunity for China as well as Dell. It means a much


more open market and will attract a lot of investors to


China. That will give everyone, not only Dell, a bigger


market to tap into. For Dell, the key segment is still the


enterprise business large corporate and medium businesses.


After nearly four years of expansion in China, Dell now has


liaison offices covering Chinas major cities Beijing,


Shanghai, Guangzhou, Chengdu, Nanjing, Hangzhou and


Shenzhen. Chinese customers can order a PC, notebook or


servers, specifying their own configuration and software


requirements, directly to a Dell sales executive, across


58 cities. Its direct, onsite service and technical


support now covers over 1,550 cities.


What is the future for Dell? Already being the number


one computer maker in the world, Dell, will continue


expanding beyond the PC. Michael Dell has already


confirmed the company would soon start making printers.


Dell recently started selling its own brand of held


computers, called the Axim, at an aggressively low price.


Computers are becoming the center of entertainment. Mr.


Dell gave his vision about how computers would be changing,


talking about PCs coming with built-in TV tuners and


software to allow them to become personal video recorders.


Dell Computers business strategy is centered around


its direct business model and is very customer focused, and


with this vision and vision, Dell will continue to grow,


and be the main powerhouse PC maker to compete with.





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