Dell Computer Corp – Case Study

Introduction: According to (online), Dell Incorporated describes itself as the world’s leading computer systems company. Dell is the largest and fastest growing among all major computer systems companies worldwide, with more than 46,000 employees. Dell designs, builds and customizes products and services to satisfy a range of customer requirements. Its global strategy is to be the premiere provider of products and services, including those that customers require to build their information technology and Internet infrastructures. Dell has manufacturing facilities and sales offices throughout the Americas, as well as Europe and Asia to remain close to Dell’s customers wherever they are located (Dell USA: About Dell, 2004).

Dell regularly communicates to the public in a variety of ways. For example, according to the U.S. Securities and Exchange Commission (online) pursuant to the requirements of the United States Securities and Exchange Commission, Dell Incorporated regularly reports its financial performance to investors, creditors, bond holders, insurers, banks, employees and other interested parties in the form of quarterly and annual filings with the SEC. Another important SEC filing is form 8-K. An 8-K report is required to be filed with the SEC in a timely manner whenever events that are deemed to be of interest to investors or potential investors occur at a publicly traded company such as Dell. The provisions of the Sarbanes-Oxley Act passed following the accounting fraud related scandals involving such well known U.S. corporations as Enron and WorldCOM require even more prompt notice to the SEC of significant events (The Laws That Govern the Securities Industry, 2004).

Another form of public relations communication between Dell Inc and the external public involves the use of press releases. In calendar 2004, Dell generated more than thirty press releases relating only to the company’s financial condition. There were even more press releases addressing product launches and other aspects of Dell’s worldwide business operations. According to Luan Aten writing for (online), a press release is simply a statement prepared for distribution to the media. The purpose of a press release is to give journalists information that is both useful and accurate. Generally, the first paragraph contains a brief overview of the press release. The second paragraph explains the information in detail, and typically includes a quote from a company employee. The final paragraph is a summation of the release as well as company contact information (Aten).

Bob Francis of InfoWorld (1994) notes that Michael Dell created a business model that satisfies customers needs by building high quality and low cost computers to order worldwide. One of the important ways in which Dell Inc. communicates in a public relations sense is through its extensive product advertising and promotions programs. The advertisements that Dell run tend to emphasize the high quality, low cost, and customizable features of its product sales (Francis, 1994, 6). Recently, Dell expanded its product offerings to include items such as portable music storage devices, printers, and flat screen television sets. As a result, Dell’s most recent television ad campaigns emphasize both the company’s traditional products including desktop personal computers and laptop computers, as well as the company’s new products.

Dell’s marketing campaigns have been highly successful. Dell has convinced potential customers that all of the following statements are true:

Dell is committed to meeting the unique needs of customers around the world. This is why each computer is build to order. In reality, the business model that requires customers to pay in advance for products from Dell offers customers the opportunity to customize the products they prepaid.

Dell operates one of the world’s largest and most profitable e-commerce sites with more than $40 million in sales daily. It positions the e-commerce site as a benefit to customers who can take as much time as necessary to customize their system. In reality the advantage to Dell is that this self-service process means that its salespeople do not need to spend their time helping customers decide what to order. The result is higher profits for Dell resulting from lower sales costs.

Dell’s marketing campaign suggests that by eliminating the middleman in the supply chain, Dell is able to control costs and pass the savings on to customers. The effect of this message on its external public is that customers believe that Dell is able to offer top quality, cutting edge technology at rock bottom prices. In reality, by bypassing retailers, Dell is able to earn the profits the retailer would have made. Dell does not offer the lowest priced products on the market, and the technology it employs is not leading edge.

For Dell to maintain this cost leadership strategy requires a company to continuously search for cost reductions in all aspects of its business. According to Elizabeth Corcoran writing for Forbes (2004), Dell was among the earliest computer companies to outsource customer service and technical support calls overseas. After sales customer support is a public relations communications process. Dell set up its first offshore technical and customers suppprt center in Bangalore, India in 2001. Dell Inc. opened a second site in the city of Hyderabad in 2003. For Dell, this particular public relations communication process has had mixed results. According to Corcoran, the cost savings for Dell are substantial. Unfortunately, language and cultural differences between U.S. customers and Dell’s bright but unseasoned Indian support staff led to a number of complaints. U.S. customers were often frustrated when Dell employees answering customer support and technical support calls seemed unwilling to depart from a script of questions. In November of 2003, in response to mounting dissatisfaction with this arrangement Dell took the rare step of rerouting its large and medium-business support work from India and back to its corporate headquarters in Austin, Texas. However, customer support and technical support for small-business and consumer accounts remains in India (Corcoran, 2004, 50).

Dan Briody and Jeanette Borzo writing for InfoWorld (1997) suggest that irrespective of where customer support takes place, Dell has found that direct customer relationships including pre-sale telephone support as well as after sales customer and technical support provide Dell with a constant flow of information about customers’ plans and requirements. This portion of the public relations communications process enables Dell to continually refine its product offerings in addition to adjusting prices, changing product features, and evaluating the impact of its marketing and advertising campaigns on customer inquiries and on customer sales (Briody, Borzo, 1997, 8).

Aten, L. How to Write a Press Release. Eclipse E-zine, Retrieved Dec 21, 2004, from http://www.lunareclipse. net/pressrelease.htm.
Corcoran, E. (2004). “Un-outsourcing.” Forbes. 173(10): 50.
Dell, Inc., (2004). Dell USA: about Dell. Retrieved Dec. 21, 2004, from Web site: /content/topics/global.aspx/corp/background/en/index?c=us&l=en&s=corp.
Francis, B. (1994). Medica says Build-to-order Notebooks are Dell’s Edge. InfoWorld, 16(9): 6.
U.S. Securities and Exchange Commission, (2004). The Laws that Govern the Securities Industry. Retrieved Dec. 21, 2004, from About the SEC Web site: /about /laws.shtml.