Dell has successfully entered the Chinese marketplace and holds 7% of the market. Dell is forth in sales in China followed closely by IBM and Hewlett-Packard. Dell lags behind Legend, Founder, and Tongfang. Dell's greatest challenge has been competition from local venders who can market a product at a fairly low price.
Corporate governance consists of a board of directors. The board has several committees with a different board member chairing each. "The Board of Directors is responsible for oversight of and supervision of the overall affairs of the company" (Dell, 2007). Dell's Asia Pacific Region President is Bill Amelio and Kevin Rollins is the CEO.
The Dell Executive Leadership Team is chaired by Michael Dell. Mr. Dell founded the company in 1984 with $1000 and big ideas. He leads a team of 13 other highly qualified executives that share the same goals and objectives for Dell. Mr. Dell and his team have been exceedingly successful building the company and expanding its business to the global marketplace. Dell's leadership has made it a competitor in the Chinese market.
The market for computer products and services in China is very competitive. With the large increase in ownership of computers has come an increased usage of the internet. As China moves to withdraw tariffs on computer products the demand for these products will rise. Chinese businesses and individual consumers will continue to seek out and buy these products.
B./C. Industry Environment/Summary of External Forces
The computer industry is full of potential competitors. With China's withdrawal of tariffs and barriers to trade the market in China for personal computers and components will be more and more competitive. The market remains competitive in China because, in addition to brand name computers, the market includes clones (generic non branded computers) that can be purchased at lower prices.
Currently Dell's sales in China make up only 10% of its overall sales. U.S. sales are at about 69% of overall sales. Dell's major competitors in China are Legend (27% of market share), Founder (10% of market share) Tongfang (8% market share), IBM (5% market share) and HP (3% market share). Dell's current market share in China is 7%. With the raising of tariffs, Dell, and other foreign competitors, will be able to compete on a more level playing field for customers.
III. Internal Environment (Strengths and Weaknesses)
E. Corporate Structure and Corporate Culture
The company is lead by a board of directors. Each director provides oversight of different segment of Dell. Dell's Asian Pacific Region is led by Bill Amelio. Dell's Chinese market for personal computers uses the direct selling method that cuts out the 'middleman'. The inventory system used by Dell is called the "just in time" model that keeps inventory levels at a 6-day supply rather than stocking up and having a larger inventory in the warehouses. Inventory is replenished as needed. Inventory costs are kept to a minimum thus Dell can pass on the savings to its customer. Chinese customers can expect Dell's products to be lower priced than its competitors.
F. Organizational Activities Analysis
Dell uses a direct business model. The company has made it a