ADAM LANFERMANS WORK / WRITING SAMPLES

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This is the link to my most recent presentation: http://prezi.com/6qthbksmj2fr/present/?auth_key=5oayvnk&f ollow=j0tdnc8yichq&kw=present-6qthbksmj2fr&rc=ref-40591707

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Lanferman, Adam 006324292 adamlanferman@yahoo.com BUS4 188-06 (43732) Dell Leverages the Internet, Directly, But for How Long? 10/4/11
Executive Summary: Dell Computers once held the greatest market share in the PC industry due to its success selling directly to consumers, bypassing inefficient links in the supply chain, and by offering high quality tech support. While Dell has become an example of great supply chain management, consumer demand has significantly dropped off in recent years and the future for Dell is uncertain. Tablets and smartphones are replacing consumer needs for PCs, which accounts for PC component producers, like Intel, having stable sales despite the decline of PC sales. Dell will try to enter the tablet market, which has been unsuccessful for all those besides Apple. Perhaps Dells best option is to capitalize on the growth of

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cloud computing systems by offering remote data storage and by selling servers to these cloud computing providers.

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Introduction / Thesis: Dell Computer, established in 1984 by Michael Dell, had great profitability relative to competitors in the PC industry after eliminating expensive links in the supply chain (i.e. retailers) and selling directly to customers and businesses. Dell established a vast and efficient supply chain that encouraged competition between distributors to further reduce costs and as a result, Dell was able to sell PCs far cheaper than competitors. Coupled with the success of Dells online selling and the high quality of customer support, Dell seemed to be unstoppable until the recent economic downturn. Dells first quarter earnings in 2009 were 63% lower than that of the previous year and sales dropped 23%. Dells competitor, Hewlett-Packard (HP), also has experienced a decline in sales. Companies that produce PC components, such as Intel, seem to have stabilized their sales. So while PC sales are declining, it seems that PC components are at least stable (Kroenke 2011, 133) The trending of tablets and other handheld devices paired with the increase in use of cloud computing account for these phenomena of decreasing PC sales and stable to increasing PC component sales. In this case I will focus primarily on Dell PCs, with contrast to HP, Dells competitor, and Intel, the producer of Figure 1 computer processors. Benefits of Direct Selling: Michael Dell distinguished his PC company from competitors by selling directly to customers. Dell determined that by skipping the retail and wholesale links of the supply chain, distributors could avoid expensive and large inventories. With a vast supply chain because of their direct distribution, Dell was able to further decrease costs by encouraging competition amongst distributors. With low channel and sales costs, Dell sold its PCs far cheaper than competitors while giving customers a made-to-order product. Dells success was furthered as the rise of internet selling gave customers even more customizable options while also easing Dells order management. Dells success emulates several principles of competitive advantage. These principles consist of product implementations and process implementations. On the product side, Dell differentiated its products by allowing end-users to customize their PCs to have desired features and only desired features to create a valuable
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product that is of reasonable price and capable of necessary tasks1. Competitors, who operated using the manufacturer-wholesaler-retailer method of distribution, only provided expensive and standard options. (Ricadella 2009, Businessweek) Much of Dells competitive advantage was result of its process implementations. By eliminating retailers, Dell reduced costs and developed a closer relationship to customers enabling greater user feedback and was effective in locking-in customers and buyers (Kroenke 2011, 133). The barriers of entering the PC market were already high, but Dells efficient supply chain and effectiveness reaching customers led competitor HP to focus its efforts on selling to businesses. (Kopytoff and Austen 2011, NYTImes) Direct Selling Information Systems: In Dells early days, orders were placed by phone and entered by hand into archaic databases. This is not the case anymore. Various information systems are essential to filling orders as efficiently as possible. It starts at the point of order, in this case for consumers. Consumers must first access the Dell website and customize the PC options they desire. This order is then recorded and payment information is processed. This is done using transaction processing systems (TPS); PayPal is the most well known online TPS. Simultaneously, the order is entered into a management information system so that the company can keep track of what the order is, who ordered it, where its going, when it must be there, and any additional information needed. These information systems combine database technology with the ability to draw information from online sources or other databases; MS Outlook is an example. At the upper management level, Figure 3 decision support systems (DSS) are used to aid with business decisions. These systems use database information to present relevant information in easily visible and accessible ways for managers to base make better decisions involving day-to-day operations. For example, a Dell manager might use a database to produce a model that shows production or distribution constraints on their facility or divisions PCs. Finally, top-level executives use executive information systems (EIS) to make long-term, strategic decisions. These are similar to the DSS but use data that is spread over longer periods of time and across different sectors of the business. Also, it is important for the data to be presented in a very simple and clear way to fit into the executives busy days. (Kroenke 2011) Other Sources of Competitive Advantage: Dell is most well known for its direct selling approach, which is the main source of its competitive advantage. However, as the

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internet becomes more accessible to potential customers, it is also becoming easier for competitors like HP to provide customizable PC options. Dell has bolstered its dwindling consumer PC revenue by enhancing its sales of PCs and servers to businesses of all sizes and by entering the data storage market. Dell is also well-known for its customer service and IT support and is a major contributor to Dells competitive advantage. Dell provides IT support to consumers and businesses alike, and even offers business consultations to help improve business processes. Dell even offers IT support to users of competitors products. These services also play a large part in bolstering Dells revenues. (Kopytoff and Austen 2011, NYTimes) In addition, Dells online presence has really been ramped up in recent years due to blogging. After a crushing review posted on a Dell blog in 2005, the company placed huge importance on improving on bad reviews by contacting negative reviewers, receiving their feedback, and then attempting to satisfy those customers. (Dell.com) Dells Recent Financial Troubles: Figure 4 Sales Drop Slightly, Revenue Falls Greatly: Dells first quarter 2009 revenue decreased by 63% from the quarter of the year before while sales dropped only 23% from the corresponding quarter (Kroenke 2011, 133). The implications of this are that cheaper component parts are being sold in higher quantities than PCs and that perhaps the PCs are significantly losing profitability. As figure 4 just above illustrates, however, it appears that both Dells PC and Laptop divisions had substantial growth just after these 2009 numbers were published. Regardless, it seems that PCs are already becoming a thing of the past. Dell will try, as many other tech companies have, to reach into the tablet market. However, so far no one has been able to come anywhere near Apples success in the tablet market. Component Sales Stable, PC Sales Declining: Though PC producers Dell and HP have decreasing sales in recent years, producers of computing components, such as Intel, have experienced stabilization in their sales. After the economic downturn beginning 2008, it seems logical that consumers might wait to purchase a new PC as is evident in the sharp decline of sales just after 2008. Now that consumers are beginning to recover however, smartphones are becoming increasingly popular and computing tablets, such as IPad, have burst on to the market and are beginning a charge that looks to have the potential of making PCs obsolete in the consumer market. These tablets employ the use of processors and other components thus explaining the consistency of Intels sales. (Kopytoff 2011, NYTimes)
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Another portion of Dells revenue comes from their sales of servers to businesses. However, in recent years cloud computing has nearly removed the need for most small to medium businesses to purchase servers. Cloud computing enables businesses to operate websites and store data remotely through various cloud computing providers. (Goldman 2011, CNNMoney) Though the growth of cloud computing has harmed Dell, it also has the potential to be a major source of income for Dell. Dell is the fortunate position of having significant access to servers that can store copious amounts of data that can be stored for fees, as well as the implication that these cloud computing providers will need to purchase servers of their own, potentially from Dell. Conclusion: Dell was able to achieve great success in the PC industry by implementing an exemplary system of direct selling to consumers. This success was supplemented by its sales of servers to businesses, sales of storage to businesses, and its renowned IT services that cater to businesses and consumers alike. However, after the onset of the recent economic downturn, Dell as well as its competitors experienced a large drop-off in sales of consumer PCs. At this point, what were once Dells supplemental sources of revenue such as their servers and storage are now holding them in the market. Consumers have shifted their computing needs to smartphones and tablets and small to medium businesses no longer need servers to operate with the rise of cloud computing systems. This is not, however, a death sentence for Dell, which has great access to servers and storage which will come into higher demand as the needs for cloud computing and remote data storage are growing.

Works Cited Goldman, David. "Why the Cloud Is Now the Hottest Trend in Tech?" CNNMoney.com. 09 Feb. 2011. Web. 04 Oct. 2011. <http://money.cnn.com/2011/02/09/technology/cloud/index.htm?iid=EL>. Kopytoff, Verne G., and Ian Austen. "Dell Inc. News." NYTimes.com. 18 May 2011. Web. 04 Oct. 2011. <http://topics.nytimes.com/top/news/business/companies/dell_inc/index.html>. Kopytoff, Verne G. "Blame the IPad for Slow PC Sales." NYTimes.com. 8 Sept. 2011. Web. 04 Oct. 2011. <http://bits.blogs.nytimes.com/2011/09/08/blame-the-ipadfor-slow-pc-sales/>. Kroenke, David M. "Case Study 4." Using MIS. Upper Saddle River, NJ: Prentice Hall, 2011. 133. Web. Randewich, Noel, and Franklin Paul. "Intel Warns Sales Fall Short as Consumer Weakens." Reuters.com. 27 Aug. 2010. Web. 04 Oct. 2011. <http://www.reuters.com/article/2010/08/27/uk-intelidUKTRE67Q4J520100827?type=companyNews>. Ricadela, Aaron. "Dell: No Relief in Sight." Businessweek.com. 28 May 2009. Web. 04 Oct. 2011.

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<http://www.businessweek.com/technology/content/may2009/tc20090528_13005 8_page_2.htm>. Images Fig. 1: Dell's Fading Fortunes. Digital image. Innovationadvantage.com. 28 Oct. 2009. Web. 4 Oct. 2011. <http://innovationandadvantage.blogspot.com/2009/10/dells-repositioning-effort.html>. Fig. 2: Hsu, Edward. Dell Supply Chain Model. Digital image. Ubc.ca. Web. 4 Oct. 2011. <http://blogs.ubc.ca/edhsu516/2010/01/26/discussiononefficientsupplychain/>. Fig. 3: Four Level Pyramid of Information Systems. Digital image. Chris-kimble.com. Web. 4 Oct. 2011. <http://www.chris-kimble.com/Courses/World_Med_MBA/Types-ofInformation-System.html>. Fig. 4: Dell: Revenue By Product Category. Digital image. Pheonixstandard.com. Silicon Alley Insider, 16 Aug. 2010. Web. 4 Oct. 2011. <http://www.thephoenixprinciple.com/blog/2010/08/index.html>. .. Adam Lanferman 4/19/11 Professor Hessler Department Final Dear Management Staff, Here at Seventh Generation Inc, it is our mission to inspire a more conscious and sustainable world by being an authentic force for positive change. Our company has built an image that reciprocates our core values of sustainability through our offerings of various Earthfriendly products. As you probably know, recently we lost the contract with the manufacturer of our natural formula baby wipes. In immediate response, our conventional baby wipes were put in place of the natural wipes. Recently, there has been debate amongst our top management staff as to whether Seventh Generation should continue to sell conventional baby wipes while a new all natural, green formula is created, or if the conventional product should be taken off the shelves all together. This matter called for imperative analysis due to the fact that the outcome of the decision has potential to greatly affect the wellbeing and longevity of this company. After much consideration, I have come to the conclusion that we should continue to sell the conventional baby wipes until the new formula is completed.

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In response to those who are concerned with the damage that conventional wipes would do to Seventh Generations image, I firmly believe that any such damage may have already been sustained and therefore we should continue with the sales of conventional wipes until we are able to put our new product out on the market. While I know this product is inconsistent with our product line and reputation, these wipes have been deemed safe and effective and therefore qualify as a valid temporary solution due to the loss of our contract manufacturer. Seventh Generation has already endorsed this product and to remove it from the market would only risk the loss of shelf space, an invaluable facet of this productlines marketability. The loss of revenue incurred from the removal of the conventional wipes would be more detrimental than the damage that these wipes may do to our companys image. It would be counterproductive to pull this item immediately because it would force us to purge the product or greatly increase our inventory, as well as lose valuable shelf space and the potential revenue that could be generated. Due to the maturity of the market, gains in market share can only be done in three ways: competing intensively on price, struggling for shelf space, and introducing new and innovative products. Therefore, with a certain price strategy, these conventional wipes could bring in more revenue than expected by drawing in a new target market, the bargain hunters. In fact, this is a perfect opportunity to promote the new and improved product that we are currently formulating. Although consumer loyalty and our companys image may be tainted, this will only be a temporary hurdle due to the nature of this product. I respect the opinions of my management staff that have urged me to pull the conventional wipes from the shelves and I certainly understand the concerns they voiced. However, after analyzing the expected losses of pulling the wipes and the potential for further gains by marketing the conventional wipes, I have made the appropriate decision for this company. In accordance with the mission of this company, I intend to fully pull the conventional wipes off the shelves once the new formula leaves manufacturing. .. Adam Lanferman Communicating Bad News Reverend Vernon White West Avenue Community Church Pinewood, SC 13479 I received your letter inquiring the use of our parking lots and checked into the matter. I found that permitting your Churchs patrons to do so would result in an insurance premium that would far exceed any reasonable rent fee I would feel comfortable granting or could afford on my own. Therefore, I must regrettably refuse your request. In response I have asked the insurance company if hiring a security guard to watch the premises would lower the premium enough to allow the Church to use the parking lots. I will inform you of their response when I receive it. In the meantime, I

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wish you and your congregation the best and assure you that I will do everything in my power to alleviate this matter. Sincerely, Adam Lanferman

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