Operation of Dell Computer Corporation will be used in the study since his decision would be the basis for the first location plant of the corporation in Latin America. Ill. Statement of the problem Should Dell decide to put up its location plant in ROI Grandee do Soul in pursuit of its competitive advantage offered by the place despite current challenges? IV. Objectives * To be able to evaluate long term benefits in pursuing the location * To identify at par advantage of ROI Grandee do Soul over other location-states * To come up with a solution at the fastest time as possible for the most suitable place to establish the
Dell's plant V. Areas of consideration A. S. W. O. T. Analysts Strength I Implications I Strong capital accumulation I Having the annual revenue of over $23 billion and market capitalization of $98 billion, Dell Computer Corporation has the competitive advantage to operate in a global arena. With this, the company has a financial say over any challenges that may interfere in the long run. With the fast growing computer industry, being capacitate is an asset for the company to survive and be known despite fierce competition.
I Highly efficient practices I Revolutionary cuisines approach and Concrete supply chain management had an effective impact on the company enable it to control 25% of the US market for personal computers and of the market worldwide. The company is practicing such approach wherein its products reach customers directly, thus, reducing additional cost on intermediaries. By this, the company is able to project an actual value of their product to its customers. With the use KIT approach, the company had been able to maintain minimal inventory.
This became a competitive edge of the company in years of existence I Distribution Channels I By having offices in 34 countries around he world, sales in 170 countries and territories, and manufacturing facilities in five countries, Dell can operate globally and have the opportunity to capture potential market all over the world. With this setting, the company is able to pursue opportunities that may come their way. I Weakness I Implications I Suppliers I Dell has large range of products and components from many suppliers that there is an occasional product recall.
Just like when they have to recall 4. 4 million laptop adapters because of overheat fears that might cause fires or electric shock. I Dell is a computer maker not a computer manufacturer I Dell buys parts room concentrated high-technology component manufacturers. Although this is advantageous to Dell since it could concentrate more on logistics and marketing, this has become Dell so reliant on a few larger suppliers that could be lacked in for periods of time.
I Opportunities I Implications I Brazil I Brazil was a very tasty site for Dell's international expansion strategy. Sales of personal computers were growing rapidly in Latin America. Dell's long-term strategy was to enter Brazil due to financial incentives and the likes. I The Guard Fiscal I The taxation war or Guard fiscal in Brazil was very attractive. This includes the competition of states to attract investments especially from transnational companies by lowering their taxes.
By this, Dell is given a good set of choices of which exact state they could put their investments on. I Financial Incentives I Aside from lowered taxes, each state also offers different sets of financial incentives, to attract more transnational companies. I P¶lo-RSI,Gag©NCAA De Discontentment (P¶lo) I This independent, non-profit, private investment promotion agency that is in association with ROI Grandee do Soul is believed to have understood Dell's specific needs. Thus, this would provide Dell with the most acceptable agreement.
I Threats I Implications I New government in ROI Grandee do Soul I With a different governor, given the fact the he is somewhat against with the "excessive" benefits given to an incoming company. For instance, he might consider Dell with the same set of agreement only for unexpected added agreements. I Global Market Exposure I Dell, being global in its marketing and operations, is exposed to fluctuations in the World currency markets. Although it is a very lean organization, orders do have to be placed some time ahead due to their size or value.
VI. Decision criteria a. Profitability This alternative should be able to maximize Dell's opportunity of having more profit. The decision of choosing between leaving Brazil as a whole, transferring to another state or trying to convince the new governor of their advantages after an agreement with Dell, it must suffice Dell's goal of having long-term benefits. These benefits are actually broad, they might mean expansion, more reach, and others. But one best goal is to have more profit, be with some core competency against the other computer manufacturing companies.
Since Dell has decided to expand its territorial sign and saw Latin America specifically, Brazil, as a futile ground for their expansion since computer sales were rapid in that place, Dell is definitely considering profitability. B. Cost Dell has been visiting different states of Brazil for quite some time, trying to figure out which of the states is best suited for their investment requirements, they have been incurring costs since now and then. Considering the fact that Dell is trying to establish a long-term goal, cost is most likely negligible.
They will make sure they have made the best choice and spend some rather than pursue on a wrong location and loose millions of dollars. But, given that Dell is for profitability, basically they would be considering an alternative that's advantageous to their budgetary plans. This will mean additional unexpected occurrences along the way of pursuing their choice. They would most likely pursue an agreement where they could save more. C. Timeliness The company is trying to find the best way to resolve the conflict that happened with the introduction of the new government.
However, they have also provided that they wanted a solution fast. Since the best timing accompanied by accuracy is one of the major points considered by any company planning to invest, this makes timeliness a retention for Judging which of the three alternatives is most acceptable. A timely alternative will most likely exhibit more advantages than disadvantages. D. Conduciveness This includes the alternative's capacity of being suitable. The chosen alternative will be conducive for the company. This entails the action being suitable to the company's immediate or long-term goals.
VI'. Alternative courses of action 1. Abort the idea of putting up a plant in Brazil Leaving the country would be a good choice especially with that they had experienced massive devaluation. Moreover, there is also an existing political uncertainty in the area Just as like what happened with the exchange of the political party in ROI Grandee De Soul. Governor Tetra's action certainly exhibits the political instability of the country. However, there is still a list of options other than ROI Grandee do Soul.
Dell can still have other available solutions like transferring their plan sites in other states such S¤o Paulo, ROI De Jeanine, Prang', and Minas Carriages or they could try to negotiate with the present governor - Governor Olive Durra. Thus there is no reason why Dell should totally forge about establishing their plant in Brazil. Furthermore the instability of the political and economic condition of the country cannot be assumed to last for a long time. It might Just pass by and in the next quarter it will be back to normal. The cost of moving out of the country might outweigh the benefits if Dell will remain in Brazil.
Given that Brazil will be the most logical place to set up a manufacturing plant for it is has the largest area and population size amongst Latin American country. And also, there Latin American country sales for computer and other high etc product are growing at a high pace. Thus, being in Brazil will give Dell a large set of customer to market their products. With these moving out of Brazil is quite a foggy idea that Mr.. Maxwell should take into consideration. 2. Look for a different location to construct the plant In this alternative Dell is going to find another suitable location to put up their plant in Brazil.
They still have other options for location - S¤o Paulo, ROI De Jeanine, Minas Carriages etc. In this alternative they will imitate what Ford did in Bah. Ford found have gained more financial investment incentive in when it shifted to Bah than it has in ROI Grandee do Soul. For the case of Dell, one of the best alternatives they have is in Minas Carriages, which have almost the same offering with ROI Grandee do Soul as what can be seen in the comparison of the Incentives at the areas of consideration.
Minas Carriages does not also have problems any problems in foreign direct investment; they are interested in working with Dell and are also concern with the needs of the corporation. Given that Dell did not started building the manufacturing plant, the cost of shifting location will not result to a major issue. Therefore, the tendency of Dell to continue its negotiation with the state of Mina is not totally out of he picture. 3. Negotiate with the new governor, Gob. Durra, of ROI Grandee do Soul The last option for Dell Computer Corporation is to engage in a negotiation with the new governor of ROI Grand do Soul - Olive Durra.
Dell might have high chances of winning the negotiation for the new governor has Just been turns done by one of his state's investor - Ford. In consequence of the new governors action a lot of the citizen that would have been benefited by the establishment of Ford plant rallied. Likewise his allies and critiques were very dismayed with the great loss in income. The offer of Dell to their state will surely bring back the trust and confidence of his people to his governance.
Conversely if we look at it in the point of view of the company, Dell Computer Corporation staying in ROI Grandee do Soul will be very beneficial. The state is one of the most flourishing in Brazil with higher standard of living and the first to privative its telecommunication company. In addition it has also well developed infrastructure and a large number of universities in the state offers courses related to computer science and chemical engineering. Thus, Dell will have a substantial number of resource if they stay in the state.