ENVIRONMENTAL FACTORS PAPER

Environmental Factors Paper

Environmental Factors Paper

High-Level Global and Domestic Environmental Factors

Successful management relies on one's ability to adapt and react to changes in the surrounding environment, especially today where there are many more environmental factors than in the years past. Globalization, technological advances and an ever-changing political landscape have increased the variables that managers must be aware of when dealing with situations. Managers should take into account all of the factors that could potentially effect their specific industry. Successful management in today's business atmosphere depends on being able to predict and correctly respond to unforeseen environmental issues that effect modern businesses. Dell Computers was established by Michael Dell in 1984 in Texas, USA. At first Michael Dell used to upgrade the existing systems with components and started selling directly. After tasting the success of his new venture in its first year, he quit the college and set up the company. The idea behind establishing the company was to provide the consumers with better quality desktops and PCs at lower rates than that of the competitors. Michael Dell was of the opinion that removing intermediaries would lead to reduced costs and better service.

Its cutting edge technology and emphasis on logistics, supply chain management gave it the cost leadership position in the market. Due to bypassing intermediaries, it was able to achieve the major cost reductions and pass on the benefits to the customers. However, in 1990 it tried its hand in retail business by having tie-ups with distributors and retailers but started losing money by 1994, so it quit this model and reverted to the old model of “Direct Selling”. It launched its website in 1996 and this move proved to be a decisive one in its entire history. The website was a big hit and people started ordering the PCs through website.

Organization's Marketing Decisions

DELL was able to compress the product development cycle by forming departments, based on functionality, around each product line. In the process, it gained expertise, technical skills in given domain area and was able to respond quickly to the needs of the target customer groups. The organization concentrated on building a group of complementary products in each product line rather than diversifying to unrelated products. The main rational behind DELL going for product line based division was to give autonomy, responsibility and accountability to the divisions to foster an environment where individual motivation, creativity and ...