Dell's Retail Strategy

Dell's corporate computer business has slowed in recent years, forcing the company to increase its efforts to attract personal computer users. In the fall of 2007, Dell announced partnerships with major computer retailers, including Wal-Mart, Best Buy and Officeworks. These partnerships ended Dell's historical reliance on the direct-to-consumer channel and allowed the company to access the mass merchandise distribution channel, which is an enormous potential business opportunity for the company. Dell continued its direct-to-consumer marketing initiatives but also sought to promote its new partnerships in television and print advertising, often in conjunction with its retail partners. In doing so, Dell has begun to compete more heavily on price, as retailers such as Wal-Mart are known as low-price shopping destinations for all types of goods. Recently, Dell's marketing efforts have been less focused on product features and customizability and more focused on low price as the defining feature of Dell computers.

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DELL COMPUTER INC.

Who We Are

Michael Dell founded our company in 1984 in Austin, Texas, with an unprecedented idea — by selling computer systems directly to customers, we could deliver the most effective computing solutions to meet their needs.

Today Dell connects with more than 5.4 million customers every day — on the phone, in person, on Dell.com and, increasingly, through social networking sites.

Our 96,000 team members around the world are committed to making technology work harder for customers and communities.

We make technology more accessible to people and organizations around the world. We ship more than 110,000 systems every day to customers in 180 countries — that’s more than one every second.

Helping Our Customers Use Technology to Do and Achieve More

Our business is aligned to address the unique needs of large enterprises, public institutions (healthcare, education and government), small and medium businesses, and consumers.

We have more than 41,000 Services team members in approximately 90 countries, 60 technical support centers, and seven global command centers dedicated to helping customers use technology to reach their business goals.

Corporate IT users say we’re number one in customer satisfaction for services that include on-site expertise, on-site response time and phone support.

Forrester Research recognized our initiatives to collect, interpret and react to feedback to improve the customer experience with its Voice of the Customer Award.

From Connected Classrooms to Virtual Labs, more primary schools and universities than ever are deploying Dell™ education-specific technology solutions, making us the top provider of laptops and desktops to schools in several geographies around the world.

As the number one healthcare IT Services provider in the world, Dell helps the medical profession unleash the power of technology to help improve patient care.

We’re the number one provider of PCs to large enterprises around the world and the number one provider to public sector customers in the U.S. We do business with 98 percent of Fortune 500 corporations.

As the number two provider of computer support to education customers, we are committed to helping administrators, teachers and students harness the power of IT to advance learning.

Ten million small businesses work with us, and we’re the number one provider of computers to small and medium businesses in the U.S.

Customers trust Dell for their enterprise IT needs. We’re the number one provider of Internet SCSI (iSCSI) storage solutions worldwide and the number one provider of x86 servers in the U.S.

Our customers can choose to do business with more than 60,000 partners registered with Dell and certified to operate as our agents.

Making a Difference for Our Communities and the Planet

Consumers around the world can recycle their Dell computer equipment for free. To date, we have recycled more than 275 million pounds of computer equipment.

We’re committed to keep approximately 20 million pounds of computer packaging materials out of landfills from 2008 to 2012.

Dell was the first PC manufacturer to ship computers in packaging materials made from bamboo, a highly renewable and compostable material.

We power eight facilities in the U.S. and Europe with 100 percent renewable energy.

Forbes magazine named us a Top 10 green company because we’re one of the top purchasers of green power according to the U.S. Environmental Protection Agency (EPA) Green Power Challenge.

We were the first major computer manufacturer to ban the export of nonworking electronics to developing countries as part of our global electronics disposal policy.

We’re committed to protecting workers from discrimination in the workplace — we earned a perfect score of 100 percent for the sixth consecutive year in the 2010 Corporate Equality Index, an annual survey administered by the Human Rights Campaign (HRC) Foundation.

The Dell YouthConnect program has helped more than one million children get access to education and technology skills through partnerships with nonprofit organizations in underserved countries.

We are proud to support (PRODUCT)^RED™, where we donate part of our product profits to the Global Fund to help eliminate AIDS in Africa. We also support Susan G. Komen for the Cure through our partnership with LifeWorks Technology Group.

Our team members volunteer their time to organizations in their communities. In our fiscal year 2010, they donated 200,000 hours of volunteer time, which generated an estimated economic impact of $3.6 million.

Using the Power of the Internet to Connect With Customers

Dell started selling computers on Dell.com in 1996 — and today we have more than four million visits to the site every day, resulting in an order placed online every two seconds.

Today Dell.com reaches customers in 166 countries and 34 languages around the world.

Dell helps power three of the top five Internet search engines.

Dell is the second most respected brand for breadth and depth of social media activities.

More than 3.5 million members belong to the Dell social Web community, which includes Dell.com communities and Dell outlets on Twitter, LinkedIn, Face book, SINA, Orkut (Brazil) and other sites.

In 2007, Dell launched Idea Storm™, where people could share ideas and vote on the ones they liked — Dell has implemented more than 400 of these ideas to date.

Visitors to Dell.com can read about and contribute to more than 100,000 product reviews.

Financial Highlights

For fiscal year 2011, second quarter (ended July 30, 2010)

Revenue — $15.5 billion

Operating income — $745 million

Net income — $545 million

Earnings per share — $0.28

CENTRAL BANK OF THE COUNTRY

Weapons of the Central Bank:

There are 3 weapons of Central Bank which it uses while carrying out the government monetary policies.

1) Interest Rates:

Central Bank has very powerful effect on interest rates because it influences other market rates by defining its MLR (minimum lending rate). If interest rates are raised than borrowing is discouraged and credit creation process is slowed down. If interest rates are reduced than borrowing becomes more worthwhile and stimulates the creation of new deposits.

2) Special Deposits:

It is the call from Central Bank to other Banks to pay over a proportion of their eligible liabilities in cash. It reduces the ability of the banks to lend to public to check money supply.

3) Open Market Operations:

When the Government sells securities and bank deposits are reduced so too are the cash holding of the banks. They reduces their lending which will reduce bank deposits. Open Market Operations can be very effective in reducing the availability of credit to the community they are also used to support the Bank’s measures to influence interest rates. By controlling the stock securities available in the market it can influence their prices and interest rates.

WAL-MART

WAL-MART S.W.O.T. ANALYSIS

· Strengths

1. Customers are loyal with Wal-Mart.

2. Wal-Mart is enjoying against competitors.

3. Wal-Mart is maintaining good relationships with reasonable amount of suppliers/vendors.

4. International environment depict good relationship with host country.

5. Wal-Mart is financially sound.

6. Wal-Mart has reasonably good systems, processes and procedures which are designed consistent with best retailing standards.

· Weaknesses

1. Customers have been savvier and look forward for value in Competitive rate.

2. Retailing businesses competitive in U.S.A.

3. Wal-Mart is demanding and has aggressive posture towards suppliers.

4. Wal-Mart is facing labor problems particularly in the area of compensation.

5. Organization’s strategic goals, vision, and mission need improvement.

6. Strategic Marketing Management needs significant improvement.

7. Wal-Mart needs significant improvement in HRM strategic areas.

· Opportunities

1. Economic conditions are favorable.

2. Wal-Mart is fully equipped to take care of societal changes.

3. Wal-Mart is equipped with latest technology.

· Threats

1. There is an emerging trance in society and society people are seeking out values.

2. Frequently legislations are being passed.

3. Wal-Mart is violation the articles of the legislations in the areas of equal opportunity environment diversity and anti.

4. Government policies related with retailing industries are public and centric.

5. The retailing industry facing continuous transformation of technological changes.

6. Wal-Mart is slow in implementing globalization strategy.

SIX SIGMA IN MARKEING

Six Sigma - What is Six Sigma?

Six Sigma is a business management strategy originally developed by Motorola. As of 2009 it enjoys widespread application in many sectors of industry, although its application is not without controversy.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts”, “Green Belts", etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).

Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service.

The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma.

The Balanced Scorecard

Traditional financial reporting systems provide an indication of how a firm has performed in the past, but offer little information about how it might perform in the future. For example, a firm might reduce its level of customer service in order to boost current earnings, but then future earnings might be negatively impacted due to reduced customer satisfaction.

To deal with this problem, Robert Kaplan and David Norton developed the Balanced Scorecard, a performance measurement system that considers not only financial measures, but also customer, business process, and learning measures. The Balanced Scorecard framework is depicted in the following diagram:

The balanced scorecard translates the organization's strategy into four perspectives, with a balance between the following:

• between internal and external measures
• between objective measures and subjective measures
• between performance results and the drivers of future results

Beyond the Financial Perspective

In the industrial age, most of the assets of a firm were in property, plant, and equipment, and the financial accounting system performed an adequate job of valuing those assets. In the information age, much of the value of the firm is embedded in innovative processes, customer relationships, and human resources. The financial accounting system is not so good at valuing such assets.

The Balanced Scorecard goes beyond standard financial measures to include the following additional perspectives: the customer perspective, the internal process perspective, and the learning and growth perspective.

· Financial perspective - includes measures such as operating income, return on capital employed, and economic value added.

· Customer perspective - includes measures such as customer satisfaction, customer retention, and market share in target segments.

· Business process perspective - includes measures such as cost, throughput, and quality. These are for business processes such as procurement, production, and order fulfillment.

· Learning & growth perspective - includes measures such as employee satisfaction, employee retention, skill sets, etc.

These four realms are not simply a collection of independent perspectives. Rather, there is a logical connection between them - learning and growth lead to better business processes, which in turn lead to increased value to the customer, which finally leads to improved financial performance.

Objectives, Measures, Targets, and Initiatives

Each perspective of the Balanced Scorecard includes objectives, measures of those objectives, target values of those measures, and initiatives, defined as follows:

· Objectives - major objectives to be achieved, for example, profitable growth.

· Measures - the observable parameters that will be used to measure progress toward reaching the objective. For example, the objective of profitable growth might be measured by growth in net margin.

· Targets - the specific target values for the measures, for example, +2% growth in net margin.

· Initiatives - action programs to be initiated in order to meet the objective.

Balanced Scorecard as a Strategic Management System

The Balanced Scorecard originally was conceived as an improved performance measurement system. However, it soon became evident that it could be used as a management system to implement strategy at all levels of the organization by facilitating the following functions:

1. Clarifying strategy - the translation of strategic objectives into quantifiable measures clarifies the management team's understanding of the strategy and helps to develop a coherent consensus.

2. Communicating strategic objectives - the Balanced Scorecard can serve to translate high level objectives into operational objectives and communicate the strategy effectively throughout the organization.

3. Planning, setting targets, and aligning strategic initiatives - ambitious but achievable targets are set for each perspective and initiatives are developed to align efforts to reach the targets.

4. Strategic feedback and learning - executives receive feedback on whether the strategy implementation is proceeding according to plan and on whether the strategy itself is successful ("double-loop learning").

These functions have made the Balanced Scorecard an effective management system for the implementation of strategy. The Balanced Scorecard has been applied successfully to private sector companies, non-profit organizations, and government agencies.

ZARA CLOTHING IN EUROPE

Zara: Taking the Lead in Fast-Fashion

With its bright-red H&M logo on 1,200 stores, Swedish retailer Hennes & Mauritz has long been the world's leading purveyor of cheap-chic apparel. No more. On Mar. 29, Spanish retail group Inditex -- best known for its Zara stores in Europe -- reported 21% sales growth in 2005, to $8.15 billion. That puts Inditex ahead of H&M, which posted $7.87 billion in sales last year.

Zara's secret? It moves fast. With an in-house design team based in in La Coruña, Spain, and a tightly controlled factory and distribution network, the company says it can take a design from drawing board to store shelf in just two weeks. That lets Zara introduce new items every week, which keeps customers coming back again and again to check out the latest styles.

Zara's success is all the more surprising because at least half its factories are in Europe, where wages are many times higher than in Asia and Africa. But to maintain its quick inventory turnover, the company must reduce shipping time to a minimum. The fast-fashion approach also helps Zara reduce its exposure to fashion faux pas. The company produces batches of clothing in such small quantities that even if it brings out a design that no one will buy -- which happened during an unseasonably warm autumn in 2003 -- it can cut its losses quickly and move on to another trend.

BASIC BLACK.

Zara's fast pace means that some popular items appear and disappear within a week, creating an image of scarcity that many shoppers find irresistible "They've built up an excitement around snapping up new clothes before they go," says Kris Miller, a New York-based retail analyst with Bain & Co. "As well as keeping sales high throughout the year, it also keeps margin-stripping markdowns to a minimum," Miller says. That helps explain why Inditex profits soared 26% last year, to $973 million.

H&M uses a slightly different strategy. Around one quarter of its stock is made up of fast-fashion items that are designed in-house and farmed out to independent factories. As at Zara, these items move quickly through the stores and are replaced often by fresh designs. But H&M also keeps a large inventory of basic, everyday items sourced from cheap Asian factories.

To add pizzazz to its lineup, the Swedish retailer has also struck deals with high-fashion designers Stella McCartney and Karl Lagerfeld to create limited, one-time collections, which generally sell out within days. H&M is a strong financial performer too. Sales during the first three months of this year were up 20%, after rising 14% in 2005.

RAPID EXPANSION.

No wonder fast-fashion companies such as H&M, Zara, Spain's Mango, and Britain's Top Shop, are among the brightest stars in Europe's retail landscape. A 2004 Bain & Co. study found that fast-fashion outlets in Spain and Britain posted average double-digit sales growth, compared with 4% growth in overall retail sales in those countries.

These companies are expanding rapidly. Zara's parent, Inditex, whose other retail chains include Massimo Dutti and Bershka, opened 448 new stores last year, while H&M inaugurated 145. This year Inditex expects to add as many as 490 stores, which includes its first Chinese outlet, opened recently in Shanghai. By 2010, its global total could grow from 2,700 to 5,000.

So far, Inditex and its European counterparts have expanded cautiously in the U.S. Zara has only 19 stores stateside. H&M has 91, but that's tiny compared to the company's 1,200 worldwide total. NPD Group, a New York-based market research outfit, says that fast-fashion accounts for only 1% of the $181 billion U.S. apparel market. That compares with 18% in Spain, 12% in Britain, and 8% in France, according to Bain & Co. estimates.

HOMEGROWN COMPETITION.

The U.S. represents a tempting opportunity for Inditex. But some analysts think the Spanish company should slow down a little. "Inditex's cost growth is exceeding its sales growth at the moment," warns Lehman Brothers (LEH) retail analyst Allegra Piaggi. "I'd like to see more penetration of existing markets before it moves into others." Others worry that Zara will be unable to stick to its fast pace, with so many more stores to supply.

But Zara and its European counterparts know that if they don't lead the parade toward fast-fashion in the U.S., homegrown retailers certainly will. Chico's FAS (CHS), a Florida-based women's apparel chain, is already introducing new styles at more frequent intervals, luring shoppers with the slogan, "You'll find something new every day at Chico's."

That's tough competition, all right. But Chico's still can't match Zara's efficiency: The U.S. company takes about six months to get an item from the drawing board onto store shelves, compared to as little as two weeks at Zara. Better keep an eye on this nimble Spanish retailer.

Most people may not have noticed but one of Zara clothing's uniqueness is its lack of advertising. Is it arrogance or merely an excellent business strategy?

Zara is a Spanish brand, owned by Amancio Ortega under the Inditex group. First launched in 1975, it is considered one of the fastest growing fashion retail chains. They are up to 1,500 stores worldwide today.

All this with zero advertisement. Money which is not spent on advertisement is instead invested in the quality of design and manufacturing process. Zara has proven over and over again, through the testimonial of its own customers that it is the product that speaks for itself. Loyal Zara customers swear by the product's good quality at the price they deem worth it.

It is quite a testament of the product that, the economy being as it is, a male customer, married with two young children in Asia can still justify buying Zara clothes on a regular basis. It is important to note that due to currency exchange rates, Zara is leaning toward high end products area in Asia. "It is not cheap by any means, but you get exactly what you are paying for. The style and quality."

Another point of satisfaction when it comes to Zara clothing is the good turnaround. New products are produced and delivered to customers in less than half a year. Other clothing lines spend a lot of time from design stage to production to delivery. Zara, however, manages to create its own efficient cycle of researching people's demand, producing and delivering it in as fast as five months. Changes in existing styles are done in a matter of two weeks. Zara is the only clothing stores out there which introduce new accessories and clothes style once a month. This ensures that Zara clothing line is one of the fastest growing retail stores in the world.

It is undeniable that Zara has reached places not too many other brand has. It enjoys success in Spain and the rest of Europe, as well as UK. It is considered one of the most favorite brands in Asia, despite its cooler climate style. The length of Zara's arms has been reaching into the US and it is already getting a tight grip.

The brand caters to a wide demography. It comes with lines for both women and men, as well as children. With its cycle of manufacturing, Zara seems able to satisfy customers demand of fresh new products, ones which are in style and yet demure without being old-fashioned. Zara clothing line is not exactly known for its wildness or quirkiness and it is not recommended to those who consider themselves a rebel.

Being the fastest growing fashion retailer in the world, Zara is certain to be found in any major city worldwide. But even for those who live nowhere near a big city, Zara is available online to browse and order. The streamline and classy designs are usually deemed as easy to mix into one's wardrobe. Purchase regret is extremely rare when it comes to Zara clothing line.