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Business Report: Dell and ASUSTeK Computer Inc Report

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Updated: Jul 23rd, 2021

Executive Summary

Dell Company is an international enterprise dealing with computers and its accessories. It is based in Round Rock, USA and employs over 96,000 employees in its worldwide branches. The name Dell was derived from its founder Michael Dell.

Growth of Dell Company is attributed to mergers and acquisitions including the take over of Alienware in 2006 and Perot Systems in 2009. Some of the products manufactured and sold by dell include: Personal computers, servers, softwares among other IT products. Marketing of these products depends entirely on the description of the market segment.

Manufacturing criteria of Dell also considers proximity to its customers such that just-in-time approach is of essence. In 2004, Dell Company limited took up an initiative to recycle products which lead to its subsequent award for promoting responsibility on the part of the producer.

Notwithstanding, the technical support offered to customers, Dell company utilizes extensive marketing strategy with an aim of reaching many customers. Use of advertisement and dell kiosks has increased product penetration in the market. Dell kiosks were oriented to give personalized service to customers i.e. by way of shopping, or telephone services.

ASUSTeK Computer Inc. participates in manufacturing and sale of ICT equipment and software programs. Some of its major products comprise of: laptops, personal computers, broadband products, mobile phones and computer accessories. Its location is in Taiwan.

Introduction

This paper presents a marketing report of two internationally based companies namely: Dell and ASUSTeK Computer Inc. Dell are based in Round Rock USA while ASUSTeK is located in Taiwan. The ASUS manufacture ICT equipments to be sold in international as well as local market whilst Dell assembles components. It is important to investigate whether the company’s management participates in strategic marketing and planning.

If so, then we shall explore the strategic Hierarchy of the business investment. Firms thrive under certain micro and macro environment. 2008 recession is one of the macro environments which affected negatively the productivity of both companies whilst the micro environment mainly captures marketing criteria used to outwit its competitors i.e. Apple. These environments will be investigated in-depth by this business report.

Dell and ASUSTeK Computer Inc have registered a substantial level of success from its business dealings due to maximization of efficient marketing strategies. The strategies which will be analyzed in the report comprise of: segmentation, target markets, positioning strategy, and ultimately SWOT analysis. Before concluding the paper, recommendation to the respective industries will be outlined.

Industry Background

Nearly all sectors in an economy depend entirely on information communication technology. ICT industry is therefore the backbone of both manufacturing and service sectors. This industry has registered a fast pace of progress in terms of technology. In the past, desktop computers with low speed were utilized.

This is not true in the recent times since Dell and ASUSTeK Computer Inc have managed to supply in the market mini computers with high level of speed. Dell’s brands such as Vostro, OptiPlex have the features of reliability, long life, and serviceability (Koehn, 2001). ASUSTeK Computer Inc is also manufacturing pocket PCs, broad bands, and graphics cards with a target of meeting individualized needs of their customers. This is a clear indication that ICT industry is dynamic in nature.

Apple industry which is a major competitor released iPad tablet computer which was quickly embraced by the business world. Use of ipad in Japan had a great impact in the business world simply because of its resolutions and advanced features. Another factor contributing to the success of iPad is the use of stylish, supreme marketing and excellent branding of the products.

From this brief analysis, we can conclude that, ICT industry emphasizes on introducing sophisticated product into the market in order to capture the attention of the target group and out-beat competitors. It must always be the objective of the company to satisfy the needs of the customers by producing quality goods and services.

Company background

In 1984, Michael Dell formed PCs limited to sell IBM PC-compatible computers from components of stock. These computers were sold directly to customers.

The aim of PCs limited was to understand the needs of the customers so as to be able to supply customers on a direct basis. Due to the success of the business, Michael dell dropped out of school to channel more energy on the new business. This was after he received a support of 300,000 Dollars from his immediate family. In 1985, Dell Company managed to market ‘Turbo PC’ on its own.

This computer was sold for 95 US Dollars. At that time PCs limited utilized the national computer magazines as the advertisement channel. Orders placed by the customers were organized in such a manner that it fell on a selection criteria. In its first year of trading, the company recorded gross earnings of 73milion dollars. In the year 1985, the company assumed another name, ‘Dell computer Corporation’ and began its international business expansion by entering Ireland.

In 1996, Dell started selling computers through its website and in 2002 its line of business stretched to include television and other computer accessories. This necessitated rebranding of the company name as ‘Dell Inc’. CEO Kevin Rollins took over from Michael Dell in 2004 and served till 2007.

During this time, Dell acquired Alienware as a subsidiary company which introduced AMD microprocessors. Due to its dismal performance, Michael Dell took over as CEO again and in 2008 and acquired EqualLogistic with an objective of gaining a grip in iSCSI Storage Company.

Acquisition of this company reduced manufacturing costs to its lowest level. Dell announced in 2009 a motive of purchasing Perot Systems to become a subsidiary company. Perot Systems specialized in strategic consulting, development of application and system integration (Koehn, 2001). It also dealt with outsourcing in addition to running call centers and handling claims.

ASUSTeK Computer Inc deals with computers and its application in information communication. Its products consist of consumer electronics such as desktop personal computers and other hardware devices. Some of the subsidiary organizations are: AMA Corporation, ASUS computer international, ASUSTeK holdings and other several well developed companies.

ASUS and Germin have engaged themselves in developing mobile phones located in some specific places. The product developed will be called Garmin-Asus nuvifone series. Furthermore, the company entered into partnership with DeviceVM LTD to integrate new technology of Splashtop which allows a user to boot computers and access internet within the shortest time possible.

There is also a possibility of forming a joint venture with Giga Byte technology Co. This means that Giga Bytes would transfer its assets and operation into the joint venture. Partnership between ASUS and a Chinese company, Huan Hsin Holdings, Ltd, would lead to manufacture of notebook casings. Another form of joint venture was with Disney Consumer Product inclined to development of Disney Netbook which is very efficient to use.

Strategic marketing and planning

Strategic marketing and planning describes how a business conducts its activities with an objective of realizing maximum returns from investment (Baker, 2008).

It captures overall activity of the business starting with production, establishment of market segments, interests of the customers, financial base of the business and the human resources. For a business venture to meet its wide goals and specific objectives, the management is under strict obligation to shape the company’s products in a manner that will lead to realization of market needs. Strategic planning therefore relates to the overall direction of the business.

Top management of a business venture ought to conduct a comprehensive review of the market and its opportunities continuously which enable them make a long term strategic arrangement. Strategic marketing plan integrates both the goals of a business with the needs of the customer.

In order to realize strategic marketing plan, planners need to segment the market with reference to such factors as Geography, Demography, Psychographic and behavioral factors (Baker, 2008). This stage is preceded by profiling the market segments while taking note of income potential, market share potential, and productivity potentials. Finally, a market segment marketing strategy is developed. This will require a choice between a market leader or product line, mass marketing or target marketing, direct or indirect sales.

Strategy used by Dell has its basis on the following key elements: direct sales, market segmentation, sharing of data and information with supplies, customer care services and bunch customization. It is the hope of the company that the strategy will lead to realization of Dell’s goal of becoming ‘virtually integrated’ business (Koehn, 2001).

This means that the customers, suppliers and the business are pooled together such that activities are conducted in real time basis. The aspect of selling directly to customers enables Dell to gain knowledge of customer’s preference and needs. Feedback after a direct sale acts a source of information about design problems consequently leading to improvement of company’s products.

ASUSTeK Computer Company participates in improving its products so as to meet individualized needs of the customers. This is evident with advent of new multimedia notebook and other products. Infiltration into foreign markets like China in addition to joint ventures with international business is a move towards realization of goals through strategic marketing and planning. As stated earlier, ASUS entered into joint with several businesses including Huan Hsin Holdings and Giga Bytes Company limited.

Macro-environmental forces

These forces have its sources from outside the company. They comprise of factors that affect the running of an organization but cannot be controlled directly (Pride, 2009). The recent globalization is one of the macro-environmental forces affecting the running of business investment.

Globalization means that competition is stiff as more differentiated products enter the market. A company must make use of innovative marketing techniques in order to move with social, technological, political and economic changes. Dell and ASUSTeK Computer Company have a technical team mandated to research on the possibilities of introducing new products to match market requirements. Invention of multimedia devices and programs is actually a move towards countering macro-environmental forces.

Micro-environmental forces

These are factors which influence directly company’s strategies and they include: customers, employees, suppliers, shareholders, competitors and other internal factors (Pride, 2009). A firm can use these elements to formulate a workable marketing strategy after sourcing sufficient market information.

Marketing mix can be used by a firm to arrive at the best combination which will ensure that the customers are satisfied. In terms of positioning its sophisticated products, Dell utilizes numerous distribution channels available worldwide. Advertisement through print and visual media is part of the promotional strategy employed by Dell. The slogan ‘ Yours is here’ which was formulated in 2007 aimed at creating awareness that Dell manufactures and sell customized computers thus satisfying individual needs.

Dell kiosks available in many parts of United States are places where customers get a glimpse of various computer products and they can subsequently place an order. Joint venture entered between ASUS and DeviceVM LTD was aimed at capitalizing on new technology of Splashtop which allows a user to boot computers and access internet within the shortest time possible. This is a clear distinction of micro-environment formulated by ASUS to remain competitive.

SWOT analysis

This is the analysis of individual competencies by measuring, strengths, weakness, opportunities and threats (Kotler, 2009). It is the responsibility of the management to maximize on the strengths, reduce weakness, make advantage of the opportunities that comes along, and counter the impediments of threats.

Strengths

During their financial year ended July 2005, Dell registered more than 1 Billion Dollar profits translating to 28% growth. This growth is purely a result of its renowned brands. Direct sales to customers, use of information communication technology and maximum use of customer relation management assist Dell to capture on trustworthy customers. Another specific strength for the company is relatively cheap and readily available labor.

ASUS’S strong financial base is derived from manufacture and sale of computer related components and equipments. During the financial year ended 2009, its revenues amounted to TWD 667.7million. The strength of the company also lies on the many subsidiaries located across the globe. This company attracts many customers due to its standardized products which meets immediate needs of the customers.

Weakness

Existence of large product and component supply can cause failure in operation of Dell business investment. In the year 2004, several computers were recalled due to the likelihood that they could explode or cause some technical problems. Inability to change suppliers reduces the choices available to the company.

Usually Dell contracts with specific few suppliers which then increase the risk in case supplier defaults to supply or delivers substandard components. ASUS faces a weakness of penetrating markets where Dell has established itself. This is contributed by the fact that Dell has strong market defense mechanisms.

Opportunities

A change made in the position of a chief executive was an opportunity for the company to make more profits. Although Kevin Rollins came in as CEO, Michael Dell remained the chair person in the organization. Another opportunity for dell is the introduction of new products in the market as a diversification strategy.

Television set, printers and phone accessories are different categories of products at the exposure of Dell. Selling low price and rebranded PCs in US market is a move towards formulating new market segments. ASUS has an opportunity to enter rich nations located in the Middle East. This will lead to more revenue generation.

Threats

Competition is one of the biggest challenges facing dell in the global market. Apple and other new entrants contribute to stiff competition in the market. Even though Dell ventured into low cost markets i.e. Middle East, competitors still infiltrate such market segments. Fluctuation in the world currencies is another milestone pulling down the prospects of Dell. Recent recession saw frequent changes in the exchange rates. This is not a conducive environment for business as well for ASUS which depends on the global market.

Market segmentation

To ensure that all categories of customers were attended to, Dell made its market more homogeneous (Rainer, 2009). In the year 1998, most of the products were sold to businesses or government associations. Major part of the customers comprised of corporate sector that purchased approximately 1 million PCs annually.

This corporate lot bought PCs at the highest price level in the industry thus contributing to supernormal profits. Example of these corporate sectors include: Ford Motors, Toyota, Shell oil and Michelin. Sales to individuals and small businesses were conducted by phone or internet.

Dell customers utilized toll free line where they could call, place an order or get information about a product through fax. Payment was also effected through credit card.

In the international arena, call center with tall free lines were based in Europe and Asia. These centers were very efficient such that calls were rerouted to specific countries where customers could be attended effectively. An example is a call from Kenya which is rerouted automatically to US for an English speaking sales representative. Dell also conducts its sale activity via internet.

ASUS Computer Company managed to sell its products to different customers after deriving different market segments. This company serves both individual and corporate sectors with a bigger proportion of sales contributed by firms. Pricing strategy helps to differentiate the markets for ASUS products.

Normally, corporate sector purchase product at a higher price level compared to small scale retailers and direct consumers. Supply of new netbook is part of the segmentation strategy where individuals are differentiated from the business world. Netbook was a very effective invention for the business fraternity since fast internet access enabled spontaneous placing of orders.

Target markets

Both print and visual media has been used by Dell to reach specific class of customers. Graphics used in advertisement takes into consideration the audience. To capture the attention of college students, Dell gives detailed specifications about the product which in real sense meets the needs of the student i.e. high internet interactivity. Online marketing by targeting specific corporate world and monitoring the results of an advertisement is an inclination towards reaching variety of market segments.

ASUS Computer Company is considering setting up markets in the sub-Saharan countries to capture the fast pace of socio-economic changes. Products manufactured by ASUS regard highly both younger and older population. PCs meant for the older class are simplified to ease its usage. The company also identifies the nature of young college students who value games and high mobility thus manufactures PCs and laptops to satisfy their needs.

Positioning strategy

This strategy allows a company to avail its products to a place where there is a proximity to customers (Dann, 2004). Advertisement, packaging, and distribution are critical factors to attain wider market coverage. Dell opened up Dell kiosks where customers could catch a view of various products before placing an order.

This is a good description of positioning strategy. Sales agents in various countries play the role of availing dell’s products to its customers. Display of beautiful models is a marketing approach utilized by ASUSTeK Computer Company.

Recommendations

Whilst e-commerce is the present approach to trade, Dell must consider advertising its products in an innovative manner. It is prudent to review marketing strategies in a continuous basis so as grasp socio-political and economic changes. Due to globalization effects, Dell and ASUS should establish more customer experience centers in African countries which are still in the verge of achieving its development goals.

Conclusion

Dell and ASUSTeK Computer Company are among the leading dealers in computers and its accessories. The success of these two organizations is credited to strategic marketing and planning initiated by the management. This is evident from analysis of segmentation, target markets, positioning strategy, and SWOT analysis of Dell and ASUSTek organizations. A recommendation made is for the companies to infiltrate African countries apart from Europe and Asia. This will expand market share of both organization.

References

Baker, M. (2008).The Strategic Marketing Plan Audit. Cambridge: Cambridge Strategy Publications

Dann, S., & Dan, S. (2004). Introduction to Marketing. Milton: John Wiley &Sons.

Koehn, N. (2001). Michael Dell,” in Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell. Boston: Harvard Business School Press.

Kotler, P., et al. (2009). Principles of Marketing. Sydney: Prentice Hall.

Pride, W., et al. (2009). Marketing: Core concepts and applications. Milton: John Wiley &Sons.

Rainer, K., &Turban, E. (2009). Information systems and the modern organization. In Introduction to information systems. New Delhi: Wiley.

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IvyPanda. 2021. "Business Report: Dell and ASUSTeK Computer Inc." July 23, 2021. https://ivypanda.com/essays/business-report-dell-and-asustek-computer-inc/.

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IvyPanda. (2021) 'Business Report: Dell and ASUSTeK Computer Inc'. 23 July.

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