Dell-New Horizons
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Strategies to Increase Sales Revenue
Dell is one of the world’s leading companies in production as well as selling of computers. Over the last two decades from 1980 to 2000, the company has been making tremendous growth in its annual sales revenue. For instance, in 1990 to 2000 it was able to record a yearly growth of 30%. This can be attributed to a good management as well as marketing strategies that has been adapted by the company management for the last two decades. Within the next seven years the company intends to make its sales revenue growing up to $ US 60 billion. The company management intends to achieve its target by 2007. For the company to reach its intended goal it needs to make annual growth in sales of about $ U.S 6 billions annually. Company should realize that for its target there is a number of strategies that needs to be adapted in the area of production as well as marketing with an aim of ensuring that the company realizes its intended sales mark by 2007.
First, Dell needs to come up with computer products that are of high quality that meets specific needs of the customers. This will help the company to be at par with its level of production compared with its competitors giving the company a competitive advantage. This production strategy will enable the company to attract many contracts from large corporations, thereby enabling the company to meet its annual sales target since it will be in apposition to increase its annual demand with a bigger margin. The second thing that the company’s marketing department needs to do is to create new market segments that will enable the company offer more personalized services (Laermer & Simmons, 2007). Such action will allow Dell to attract the ever-growing demand of computers in some emerging markets, especially in developing countries. Being in a position to capture the emerging markets, the company will be able to make large sales volumes on yearly bases, thereby managing to achieve its annual sales volume. Dell also needs to adapt a localized production strategy, whereby it will open production plant in each and every region of the world in order to enable the company tap in all the emerging world markets and take advantage of low cost production that is available in different regions of the globe. Reduced production cost will enable the company to sell its products at lower prices compared to its competitors. Finally, Dell needs to employ various marketing strategies such as sales promotion, advertisement among others to make its products desirable in existing and new markets.
Implications of the Strategies
There is a number of implications that come with the company adapting the above strategies as it aims to achieve its annual sales target. Dell management needs to be well prepared to meet the various challenges that are likely to arise out of the company adapting to the above scenarios as means of increasing its sales volume. In the world of business there is a number of things that keeps on changing, and these changes have high implication in the revenues as well as other activities of a given business organization. There are cost implications, organizational structures as well as marketing implications that Dell as a business organization should be prepared to face.
First, in its expansion of strategy of opening workstations in all the regions around the globe, the company must be prepared to invest a huge amount of capital in order to meet its expansion goals at a full capacity. The shareholders of the company should not expect any dividends from the sales realized as a result of the company’s expansion strategy that is aimed at increasing the sales revenue to a $U.S 60 billion mark by 2007. The individual workstations at early stages will be recovering the cost that is used to set them up. This means that the expansion strategy of the company will be a costly venture that the management team should be fully prepared to support for its successful completion.
Secondly, for the company to remain competitive annually it needs to produce highly innovative as well as high quality products. For this goal to be achieved, the company needs to invest heavily in marketing research for it to release high quality product in the market (Laermer & Simmons, 2007). This means that Dell as a corporation will be required to invest a lot of cash in research and development activities within the next seven years for it to realize its annual sales growth target. Therefore, the company will be faced with high cost implications, where it will be required to invest in activities that do not bring immediate returns to the company. On the other hand, for the company to arrive at its annual sales target, it needs to invest heavily in the promotional activities such as advertisement and sales promotion that require huge amount of capital especially in emerging markets.
In conclusion, the company management should be well prepared to fully face the challenges that come with its annual sales expansion strategy in order for company to meet its annual sales target by 2007.
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