PORTER'S COMPETITIVE FORCES MODEL

Assalamualaikum to Madam Ayu and all my friends... Here i want to share with you all about a product that use Porter's competitive forces model. Dell is one of an example product that achieve successfully in their business by using Porter's competitive forces model. So, let us share this information...

Personal computers have become commodity. Competition is quite furious in this sector. Lower-end computers with high-speed internet capability become the main selling factors for PC companies.

About Dell…
Dell Computer Corporation, incorporated in October 1987, is a computer systems company and a provider of computing products and services. The Company's primary product offerings include enterprise systems, notebook computers and desktop computer systems. The Dell line of high-performance computer systems includes PowerEdge servers, PowerApp server appliances, PowerVault storage products, PowerConnect networking products, Dell Precision workstations, Latitude and Inspiron notebook computers. Dell Computer became the world's largest personal computer vendor,and gain market share and post profits in an industry. Dell sells 90% of its PCs directly to the final customer, largely bypassing the reseller channel that accounts for most of the world's PC sales. This direct customer relation ships the key to Dell's business model, and provides distinct advantages over the indirect sales model like Acer, Compaq, Lenovo, and more. Dell competitors are primarily in the Personal Computers industry. Dell also competes in the Computer Networking Equipment, Computer Peripherals, and Mass Storage Systems sectors.


Dell Direct Business Model:

Advantage:
1. Lower cost: avoid dealer’s markup and pass the saving to customers.
2. Customized system: customers get exactly what they wants.
3. Save time: takes only 36 hours to manufacture, test, and ship customized products.
4. Easy for customers to order: either log on www.dell.com or call 1-800-WWW-
DELL.


Competitors in DELL PC industry:

Competitors of Dell are:

1. ACER
2. HP
3. COMPAQ
   

Porter’s Competitive Forces Model

During this rapid change, information technology must remain steadfast to compete with their competitors. In an influential book, Trompenaars and Turner (2002) stated “Michael Dell’s method of direct service helped gain an advantage in the computer industry”. The direct sales process allowed express selling to the customer without through the middleman. This study examines the computer technology field with Michael Porter’s competitive forces and creating improved productivity.
Michael Porter’s (1980) competitive forces, a reliable strategy in the business world today. Porter states that the economic and competitive forces in an industry segment are the result of five basic forces: bargaining power of suppliers, bargaining power of buyers, Threat of entry of new competitors, threat of substitute products or services, and rivalry among existing firms in the industry. So every company should have tactical plan to identify strengths, weaknesses, opportunities and threats present within the company for survival.


1) Rivalry among existing firms in the industry

Out of the five competitive forces that influence the computer technology world today is rivalry among existing firms in the industry be the biggest threat to Dell. Within the technology industry competition will arise in order to gain increased position. Dell challenges the other industry like Acer, and Compaq by providing direct service to customers, price cuts, and staying up to date with modern technology. To make things easier for the customer Dell established user-friendly relationships with the customers.

In 1996, Dell establishing the direct model. For the first time customers were able to buy a Dell computer from the Internet, while ACER, Compaq, Lenovo, and HP customer must buy from their shop and any shop can sell their product and be a dealer. Only Dell company sell the Dell notebook and be a dealer to it self without third person or middleman. It is difficult to find computer shop that sell Dell brand except for which have an approval and certificate from Dell. Dell established a key advantage by creating the direct service model and only Dell company can sell their product.

The company’s direct model consists five of tenets, “beginning with the customer and ending with the customer”. Dell’s principle’s resulted in customer satisfaction, which understanding to the needs of the customer. The company speaking directly with customers. For example when the customer had a problem they can just call Dell and dell will solve their problem only through phone. Moreover, open lines of communication with the customer created a clear concise understanding of the buyer’s exact needs. Ultimately cutting out the middleman and proving direct support to its client. Dell next established a single point of accountability, to grant customers with a direct connection to associates through proper channels. Dell also provide advanced components while like Acer it just store basic components.

Dell rivalry among existing firms in industry: HIGH

• High concentration than Compaq and ACER
  
• Decreasing profitability
• Low differentiation
• However, in sever competition, Dell can still gain market share from other competitors like ACER and COMPAQ. That proves Dell’s business strategies have been successful.

2) Bargaining power of buyers

Next, the most influential competitive force used in Dell’s industry is bargaining power of
buyers. Bargaining power of buyers exist and high when buyers compete with many industry by forcing down prices, bargaining for higher quality or more services, and playing competitors against each other at the expense of industry profitability. Dell gains a competitive advantage in the industry by focusing on bargaining power of buyers. The more buyers have choice the power of buyers is high where they can choose any barand they want like Dell, Acer, Compaq, Sony and more while the bargaining power of customers low when the buyers have only few choices.

Dell provides the customer with a product to best suit their budget, while allowing the consumer a tailor made a system for their use. Dell dominates the computer industry by being a low-cost leader, a perception pleasing to the customer. In return the customer gains a desirable product at a great value.

Dell Bargaining Power of Buyer: High

• Dell is highly price sensitive and it is best in the features in terms of portability and for others areas compare to ACER and Compaq. For example the Dell notebook had the longest rated battery life with a rating of 4 to 5 hours while Compaq's notebook had a rating of 3 hours and battery life for Acer is not fantastic.
• Reliability and customer service become important factors where customer can get their service through phone and their technician will come to us while others company such ACER, Compaq we have to go by own self to get a service.
  
• Dell’s products are very reliable and customer service is outstanding. Customer easy to get service.
  
• Dell still set the prices very low. Although the prices are raised too high, customers will not hesitate to switch to other brand because Dell brand satisfied their needs and make them easy rather than other company such as Acer and Compaq.
  
  

3) Bargaining Power of Suppliers

Computer hardware company play Dell’s reputation. For instance, Dell upholds a well-trusted name brand commonly found in office, workstations and other places of businesses. Dell’s the first company to offer “computer systems on a next-day, on-site product service” to the consumer. The company also takes pride in being the first company to introduce the notebook computer system. The notebook computer designed to business professionals with busy lifestyles. Likewise, Dell reached number one in the global market share. Together with direct service, excellent customer service and fresh ideas, Dell achieved the great status in the United States for standard Intel architecture server shipment.


Dell Bargaining Power of Suppliers: HIGH

• Large number of famous suppliers for Dell components like hardware, keyboards, etc while for certain ACER and Compaq the supplier use a fake components. Dell is the one company who give us a original CD for format the notebook while others like Acer and Compaq they give a copy or genuine Cd to us that will effect our notebook system.
  
• Microsoft standard for all PC’s and Intel standard for most PC’s. Dell we can choose either
  
• High switching costs

4) Threat of entry of new competitors

For computer company it is not easy for anyone can be entered. It required high modal to have our own computer company and it is not like we open a stall like "goreng pisang stall". For example, the threat of entry into Dell is moderate because the Dell industry has few major entry barriers. For most, the Dell has a Web and it increases the threat of the company as it sharply reducing traditional barriers to entry. Threat of entry of new competitors for Dell is moderate as others company such Acer and Compaq also have their own website and compete with Dell. It is still not many PC industry in our country so Dell, Acer, Compaq, HP, industry all have to compete to be the number one PC industry.

Dell Threat of entry of new competitors: MODERATE

• Low investment for independent stores
• Low product differentiation
• Brand name may be a barrier to entry where Dell brand is known by whole world and long sale brand and it brand is good compare to Compaq which is new brand which still new in this industry.
  
• Low economies of scale
• No legal or governmental barriers
• Decreasing profitability shows that there is a threat of new entrants

5) Threats of substitute products or services

Dell believes in standards-based technology, which represents the opportunity to decide in the item of preference. Dell defeats barriers by constantly updating processes and introducing new ideas to remain successful. Dell faces constant threats of substitutes or services from other computer hardware products; such as, Hewlett-Packard and Apple which are among top competitors. Nevertheless Dell’s perseverance remains untouchable through creative technology such as, direct service, customer service and new gadgets.

Dell Threat of Substitutes or Services: LOW

Dell have their own original Cd for their notebook and have their own software and services while Acer and Compaq they do not have their own substitutes or services. Acer and Compaq industry use a copy and genuine Cd from other company. Dell have their own warranty while for Acer and Compaq they have many warranty services where the shop also have their warranty instead of the warranty from the Acer and Compaq company. For example Acer not only offers lower cost of ownership and investment protection, but also the assurance that there is an Acer office and Acer Customer service Center near us. Customers may seek assistance and advice they need in the many way; through online or over the phone with Acer Call center personnel. Acer have many warranty than Dell such as Acer local warranty and Acer Extended Warranty. Dell cannot extend their warranty that had given by the company so this show that Acer have many substitutes service in their product.

However, high price, and lack of software support prevent people from switching to Apple system. Recently Dell introduced the new Dell Pocket DJ and Dell photo printer 540, to gain a competitive advantage over Apple’s iPod mini and Hewlett-Packard photo smart 375. The new innovating idea behind the model is the price comparison. Dell climbs to the top of the market with the photo printer 540 another ground-breaking gadget for the company. The Dell photo printer retail price is $189.00 compared to Hewlett-Packard’s photo smart starting price of $200.00(USA Today, 2004). Again, Dell surpassing in price by offering a quality product at a great price. Dell outshines competitors Apple and Hewlett-Packard, by offering affordable top of the line products.

Overview!!!

Overall the company has through a long road of success for the future. Fighting against competitive rivalry in the computer hardware industry, Dell brings forth new and innovating ideas. With constant advancement and development in the computer industry, Dell realizes the obstacles it has to overcome. Dell have to plan wisely to compete with Acer , Compaq, Lenovo and HP which are now in advancement. The company must incorporate the process along with daily enforcement of Porter’s Competitive Strategy. A company that plans for success understands the threats of new competitors, power of suppliers, power of buyers, the threat of substitutes or services and rivalry competitive. By being informed of its competitors and building constant improvements in its products, Dell will gain a competitive advantage in the market. Dell’s a company that is well known for the quality of the product, service, cost and commitment to customers. Dell gained a competitive advantage by establishing new ideas in the information technology world. By focused on capturing the customer’s needs and determined for success, Dell maintains a successful record. When a company does not fully practice Porter’s Competitive Forces the company will faces a great risk. Companies need to understand the market facing them in order to accomplish the desired goals of success. Careful attention to its competitor’s developments proves to provide a competitive advantage on present and future competition.



References

Dell, Inc. (2004). Dell at a Glance. Retrieved October 8, 2004, from
http://www.us.dell.com/content/topics/global.aspx/corp/background/en/facts?

Kessler, M. (2004, October 10). Dell rides the wave to consumer gadgets. USA Today.
Retrieved October 25, 2004 from
http://www.usatoday.com/money/industries/technology


A Talk With PC King Michael Dell

Children Of Heaven by Majid Majidi

Assalamualaikum to my lecturer Madam Ayu and my fellow friends. I am sure that you all are enjoyed while watching this movie. After watching this movie i had done review on it. Children of Heaven is a Iranian film. The children innocent faces register such a range of emotions over the course of the film I began to think that many adult actors should be watching this film and taking notes. From the point of my view, this movie is a very touching movie and there are many moral values that I can interpret. The director produces a warmth movie that has a good lesson, the story also easy to understand and delivered in a good way. It's also a very charming film for of all ages.

Overview...

Ali takes his sister Zahra's shoes to the shoemaker to be repaired, but suddenly it loses when Ali went into the shop and left the shoe at outside the shop. Their hardlife start when the shoe had loses because Zahra has no shoe to wear when going to school. Zahra wanted to tell their parents about the loses shoe but Ali stopped her from doing that. So they decided to keep about the shoe loses as a secret from their parents, knowing that their parents is no money to buy a replacement pair new shoe and fearing that they will be punished. To solve this matter Ali and Zahra made a plan where they share Ali's sneakers. Zahra will wear it to school in the morning and hand the sneakers to Ali at the afternoon so he can attend afternoon classes. They have to face many obstacles during this time such as Ali always went late to school and nearly to be dismissed while Zahra has to rushed quickly after school to hand off the shoe to Ali. The sad moment when Zahra sees the shoes on a her schoolmate's feet, and follows her home, but the two soon become friends. A few days later Ali heard about footrace in his school and the third winner will receive a new pair of sneakers. Ali entered the race with the hope he will be win the third prizes and he want to give a new sneakers to his sister Zahra. He accidentally places first and wins another prize instead. The film ends with Zahra finding out that she will not get a new pair of shoes, but there is a quick shot of their father's bicycle at the end of the movie that shows what appears to be the red shoes Zahra had been focusing on earlier and another pair of white sneakers, for Ali, whose old sneakers were torn from so much use. The film also ends with the final shot and touching ending where showing blisters on Ali's feet because of he tried his best to win the third prizes in the race for his sister.

RESPONSIBLE

From the point of my view, the moral value that I can get through this movie is responsible and independent. Ali and Zahra were responsible children towards their parents. They helped their parents without any protest. They do all work by their ownself. For instant, Ali helped their father to do gardening at town as to earn extra money, while Zahra helped their mother to do housework and look after her youngest sister. They know their responsibility towards their parents very well. This value gives good impact to our self and to arouse us our responsibility towards parents and family.

LOVING

Besides that, loving between siblings is the most important moral value that we should implement as an example in our life. It's about a 9-year old boy who loses his 7-year old sister's shoes through no fault of his own. They are very poor and they both want to keep it as a secret from their parents. They love their parents and do not want to burden them.So they decided that they will share Ali worn-out sneakers. Zahra wears them to school in the morning, and Ali wears them in the afternoon. However, they faced many challenges during this time. Zahra almost loses a shoe when it falls into a drain while Ali late for school and nearly to be dismissed. Because of loved to his sister Ali willingly to sacrified and faced the obstacles. Ali, has the biggest, most expressive eyes I've ever seen and my heart immediately went out to him while Zahra is little sister which paly a good role. Later, there is a footrace announced in the little boy's school. He finds out that if he wins third prize he can get a new pair of sneakers and he struggle for it as he want to give the sneakers to his sister. The tension mounts and this proved the Ali loving towards Zahra. One of the best things about this film is that it brought me into another culture. This is just a simple story about the love between a brother and sister. It transcends all cultures, and makes the audience see the humanity of the children. There's one scene where they clean the shoes and blow great big soap bubbles at each other. It certainly is heartwarming. This story show us a strong love between Ali and Zahra. This moral value we should implement in our family as it is a very good value that nowadays we are busy with our life and forget to be loved each others.

CARING

On the other hand, this movie also interpret a moral value that is caring. This can be shown when Ali and Zahra cares towards their family. They understand their family situation which is poor. When Zahra shoe’s was lost, Zahra wanted to tell her father about it, however Ali reminded her that if she told the truth, they will create a problem to their father and make him worried. So, as they are concern and caring children, they decided not to tell their parents about it because their parents would not be able to afford a new shoes. Lastly they made a plan. Their secret arrangement consists Zahra wearing Ali shoe’s to school in the morning and Ali wearing the shoes in the afternoon.

MATURED

The next moral value that I have learnt from this movie is being a matured person. Ali as an older brother he can do his responsibility very well and think carefully before doing something. For example, when the shoes was lost he decided not to tell his parents about it as he does not want to burden them. This proved his maturity. However he also was a genius student although he came from poor family. Ali never makes his poorer as an obstacle to achieve a good result in his examination. As a result, Ali got an excellent result in his examination and had given a valuable pen by his teacher.

UNGRATEFUL

Instead of good moral values, there was one negative value that we should take it as a lesson which is ungrateful. We can see this attitude through Zahra character. She was ungrateful with what she had. Although, her brother sacrifieced a lot for her such as gave her a valuable pen, and gave her his sneakers but Zahra still not happy. She always looked at the person who are rich and had a nice shoes. She want a shoes like them.

In a nutshell, we should practice a good values in our life and take a negative values as a lesson.Always remember that everything we did will impact in our life. Life like as a circle what goes around come around!!! Don't miss "Children of Heaven"! It is a richly rewarding experience.


There are some critics and reviews on this movie;

"One of the most gentle social commentaries you are ever likely to see, with heartwrenching performances from two young (non-actor) children. This will melt your heart."
- Shannon J. Harvey, Sunday Times (Australia)-

"I wasn't expecting much, despite the praises I'd heard, when someone told me that the plot of this movie was about a boy who loses his sister's shoes. But every aspect of this movie deserves praise.This movie is a perfect example of how a film can be made beautifully effective without having to resort to raw sex, constant violence, or complicated plots. It is the simple but charming story of two poor siblings, who must share one pair of shoes because the brother, during his walk home from the shoe repair loses his sister's shoes.The loss of the shoes brings on all the difficulties with which they must now cope. The film tenderly shows how they strive toward resolution of their problem. The director has achieved a very solid tension that keeps your eyes glued to the screen from the opening frames till the very end. This film beautifully shows a world of which most Westerners are completley unaware, a world that is so different from our own. The bulk of the film is carried very capably, on the shoulders of two small, young children, and they do a totally magnificant job of making you believe this very lovely, charming, and worthy film.

-Siti Mashithah-

Let's we enjoy watching the video!!!

Next episode can be view through Chlidren Of Heaven Video's at side bar...