ÞLS1 Analvsls


Cne of uLLL's blaaesL LhreaLs ls lnvolvlna Lhe fourLh elemenL of Lhe exLernal envlronmenLţ Lhe
pollLlcal/leaal envlronmenLŦ 1he Chlnese aovernmenL prefers Lo promoLe naLlonal ÞC vendors Lo forelan
companlesŦ 1here ls a loL of red Lape lnvolved ln securlna aovernmenL conLracLsŦ 1he Chlnese
aovernmenL noL onlv favors local flrms buL also local companlesŦ CovernmenL conLrol of lnLerneL usaae
ln Chlna ls anoLher LhreaL Lo Lhe arowLh of Lhe lnLerneLŦ


1he economlc envlronmenL refers Lo Lhe naLure and dlrecLlon of Lhe economv ln whlch a flrm compeLes
or mav compeLeŦ A prlmarv LhreaL LhaL compuLer companles encounLer ls Lhe problem of sofLware
plracvŦ lndla has a shorLaae of skllled laborţ even Lhouah Lhe counLrv has manv economlc opporLunlLlesŦ
CompuLer companles have Lo acknowledae LhaL Lhe averaae consumer could noL afford Lhe lnvesLmenL
and verv few had a bank accounLŦ uLLL ls aware LhaL lndla cusLomers ao for Lhe cheapesL SvsLemŦ


1he socloŴculLural seamenL ls concerned wlLh a socleLv's aLLlLudes and culLural valuesŦ 1he poLenLlal for
lnLerneL arowLh ls huae ln lndlaţ alvlna forelan compuLer companlesţ uLLL Lhe opporLunlLles Lo expand
lnLo a new markeLŦ CompuLer companles have Lo acknowledae LhaL ln Lhe lndlan culLureţ people are sLlll
unsure abouL card sales because of Lhe huae expense of compuLers ln lndlaŦ uLLL have Lo lnvesL ln doorŴ
LoŴdoor or faceŴLoŴface operaLlons Lo aaln consumers' falLh and consumers' LrusL ln Lhe companv and


1he Lechnoloalcal seamenL lncludes Lhe lnsLlLuLlons and acLlvlLles lnvolved wlLh creaLlna new knowledae
lnLo producLsţ processes and maLerlalsŦ ln Lhe compuLer lndusLrvţ Lechnoloav conLlnues Lo be smaller
and fasLer Lhan everŦ Þrovldlna access Lo Lechnoloales developed bv lnsLlLuLlons has proven a kev
aovernmenL resourceŦ 1he lnLerneL ls a areaL opporLunlLv for companles Lo aeL Lhelr name lnLo Lhe
publlc domaln as well as a fasL wav Lo Lallor servlces Lo lLs cusLomer seamenLsŦ

uLLLƌs producL llfe cvcle ls verv aood and belna Lhe besL amona and Lop companv selllna ÞCsţ lL can be
sald LhaL uLLL ls ln maLuraLlon sLaae as Lhev are domlnaLlnf Lhe compuLer worldŦ 1he lnLernal buslness
envlronmenL of uLLL ls verv aood and has achleved Lhe lSC 14001 LnvlronmenLal ManaaemenL SvsLemţ
(Plcks and CullleLţ 1998) as Lhe oraanlzaLlon lmplemenLed aoals where bv Lhe aoal ls Lo lmprove
lnLernal envlronmenL performance as used Lo share successes LhrouahouL Lhe companvŦ uLLL's dlrecL
cusLomer buslness model ls Lhe kev Lo Lhe companv's dramaLlc arowLh and success and has focused on
selllna dlrecLlv Lo cusLomersŦ 1hls helps ellmlnaLe Lhe mlddleman and offers cusLomers more powerful
conflaured svsLems Lhan mosL compeLlLorsŦ (Plcks and CullleLţ 1998) 1he dlrecL model enables uLLL Lo
develop a Lhorouah undersLandlna of cusLomer expecLaLlons whlch sLrenaLhens cusLomer relaLlonshlps
and lncreases cusLomer saLlsfacLlon and lovalLvŦ

llve lorces Model

1he flve forces model of compeLlLlon expands Lhe arena for compeLlLlve analvsls and lnclude Lhe LhreaL
of new enLranLsţ Lhe baraalnlna power of suppllersţ Lhe baraalnlna power of buversţ Lhe LhreaL of
subsLlLuLe producLs and Lhe lnLenslLv of rlvalrv amona compeLlLorsŦ

LnLrv 8arrlers

new enLranLs Lo a markeL can LhreaLen Lhe markeL share of compeLlLors alreadv ln Lhe markeL Ŧnew
enLranLsţ such as l8Mţ are lnLeresLed ln enLerlna Lhe Chlnese markeL Lo Lrv Lo aaln a larae markeL share
from exlsLlna compeLlLors ln Lhe markeLŦ uLLL ls uslna a dlfferenL approach Lo caLch Lhe eve of Chlnese
consumersŦ uLLL's !usLŴlnŴ1lme (!ŴlŴ1) lnvenLorv keeps lnvenLorv cosLs Lo a mlnlmumŦ A barrler Lo enLrv
ln Chlna ls deallna wlLh Lhe aovernmenLs pollLlcal and leaal lssuesŦ Manv forelan flrms have Lo depend
on Chlnese resellers Lo make Lhelr producL avallable Lo Lhe publlcŦ Chlna's reaulaLlons sLaLe LhaL lf aoods
were noL manufacLured ln Chlnaţ Lhev could noL be sold dlrecLlv Lo Lhe malnlandŦ uesplLe proLecLlonlsL
Larlffs on forelan flrms as uLLL can sLlll undermlne Leaend prlcesŦ

8uver Þower

1he baraalnlna power of buvers ls an lmporLanL aspecL ln Lhe compuLer lndusLrvŦ 1he buver seamenL ls
especlallv powerful ln Chlna because compuLers are so expenslve LhaL consumers do evervLhlna Lhev
can Lo aeL Lhe besL deal for Lhe cheapesL prlce because of Lhe cosL savlnas derlved from cuLLlna ouL Lhe
mlddlemanţ uLLL belleves lL can sell compuLers aL lower prlces LhaL lLs compeLlLors canŦ

Suppller Þower

1he baraalnlna power of suppllers ls moderaLe ln Lhe compuLer lndusLrvŦ uell CompuLers ls a verLlcallv
lnLearaLed companvŦ SubsLlLuLe producLs are aoods or servlces from ouLslde a alven lndusLrv LhaL
perform slmllar or Lhe same funcLlons as a producL LhaL Lhe lndusLrv producesŦ


1he compuLer lndusLrv has a low Lo medlum LhreaL of subsLlLuLe producLsŦ AlLernaLlves Lo Lhe ÞC lnclude
wrlLLen communlcaLlonŦ CalculaLors can compuLe numbersŦ 8ooks are an alLernaLe source of knowledae
buL do noL have Lhe amounL of lnformaLlon avallable aL Lhe Louch of a buLLon llke Lhe lnLerneLŦ 1he
compuLer ls also a form of enLerLalnmenL as subsLlLuLes for enLerLalnmenL value lncludes radloţ
Lelevlslon and movlesŦ


CompeLlLlon ls lnLense ln Lhe ÞC markeLŦ Leaendţ a aovernmenL backed ÞC companv ls Lhe markeL leader
ln ChlnaŦ Leaend has a domlneerlna presence ln Malnland ChlnaŦ CLher forelan flrms lnclude l8M PewlLLŴ
Þackard and CompaqŦ Success requlres forelan companles Lo parLner wlLh Chlnese companles Lo aaln
dlsLrlbuLlonŴchannel and markeL access whlle Lhev also operaLe Lhelr own lndependenL subsldlarlesŦ

Analvsls of lssues


uLLL has approxlmaLelv 39ţ000 emplovees around Lhe alobe and has a larae
and dlverse corporaLe oraanlzaLlonŦ uLLL companv has loL of compuLer
svsLems ln manv locaLlons such as AusLlnţ 1exas and nashvllle LhaL could be of hlah sLafflna cosL and
value LhaL has conLrlbuLed ln malnLalnlna sales Lo over LhlrLv four offlces around and Lhen serve as Lhe
fronL llne ln Lerms of selllna lLs producLs and servlces worldwldeŦ (lahevţ klna and naravanţ 1981) ln
human resource sldeţ uLLL conducLs Lralnlna for all emplovees ln order Lo reduce absenLeelsm and
human errors as well because Lhe hlahŴquallLv sLaff ls requlred ln enhanclna Lhe besL quallLv
performance of Lhe companvŦ


uLLL has poslLloned Lo exLend lLs brand name bevond malnsLream compuLer producLs bv leveraalna lLs
repuLaLlon as an eŴcommerce leaderŦ ln Lhe vear 2000ţ uell beaan Lo redeflne lLself as Lhe companv LhaL
knows how eŴbuslness worksŦ lL has shared lLs onllne sales experLlse wlLh a few larae cusLomers as Lhev
developed Lhelr LŴcommerce capablllLlesŦ uLLL faces some forces from lLs compeLlLors ln Lerms of
lnformaLlon 1echnoloav as Lhe Lul Lool alves verv effecLlve opporLunlLles ln reduclna cosLs and lL can
esLabllsh Lhe LlahL llnkaae beLween uLLL wlLh lLs suppllers and uLLL wlLh lLs cusLomerŦ (lahevţ klna and
naravanţ 1981) uLLL sLarLed selllna lLs own brand of handheld compuLersţ called Lhe Axlmţ aL low prlce
whlch can be consldered as hlah poLenLlal and CLCţ MrŦ Mlchael uell sLressed how uLLL's success lav ln
maklna lL as easv as posslble for someone Lo buv a compuLerŦ (lahevţ klna and naravanţ 1981)

1here are some appllcaLlons LhaL are currenLlv belna used bv uLLL and Lhev are crlLlcal Lo Lhe core
operaLlons of uLLL buslness and Lhe uLLL dlrecL whlch are lLs operaLlonal facLors for successŦ Some
appllcaLlons LhaL are currenLlv belna used bv uLLL LhaL are valuable buL are noL consldered for cerLaln
crlLlcal successŦ
Plah ÞoLenLlal

AppllcaLlon whlch are crlLlcal Lo achlevlna fuLure buslness sLraLeav
AppllcaLlon whlch mav be lmporLanL ln achlevlna fuLure buslness success

kev CperaLlonal

AppllcaLlon upon whlch Lhe oraanlzaLlon currenLlv depends for successŦ
AppllcaLlons whlch are valuable buL noL crlLlcal Lo buslness successŦ

Sourceť (Ldwards eL alŦţ 1993)

lnLernal CrowLh Model

uLLL's lnLernal arowLh model can be relaLed Lo Lhelr proflLablllLv manaaemenL as lL lnLends Lo
coordlnaLe Lhe companvƌs dallv acLlvlLles Lhrouah areaL manaaemenL aL Lhe core of uLLLƌs arowLh ln
crlLlcal perlodŦ 1husţ uLLL had creaLed an allaned arowLh model LhaL enabled lL Lo manaae wlLhln Lhe
need for lLs sLaaes for Lhelr arowLh ln Lhe buslnessŦ

1he sLaaes of Lhe arowLh model are as followsť

AccounL selecLlon

uLLL companv developed a core compeLence ln LaraeLlna cusLomers and kepL a masslve daLabase of
uLLLƌs buslness from corporaLe relaLlonshlp accounLsţ cusLomers havlna predlcLable needs closelv Lled
Lo Lhelr budaeL cvclesŦ uLLL developed powerful cusLomerŴspeclflc lnLraneL slLes wlLh predeLermlned
cusLom speclflcaLlons and has used hlaher prlceŴpolnLs and Lhe laLesL Lechnoloav producLs Lo LaraeL
buvers who had reaular uparade purchase paLLernsŦ

uemand manaaemenL

uLLL developed Lhe cruclal funcLlon of maLchlna lncomlna demand Lo predeLermlned supplv and LhaL
Lhe funcLlonal deparLmenL leaders balanced and aareed on lnLernal producL sLraLeales and compeLlLlve
facLorsŦ uLLLƌs prlclna had reflecLed demand manaaemenL LhaL varles from week Lo week as Lhe
companv modlfled lLs prlces Lo push producLs bevond lLs prescrlbed levelsŦ

ÞroducL llfecvcle manaaemenL

uLLLƌs cusLomers rapldlv adopLed new Lechnoloav and lLs markeLlna focus on manaalna producL llfecvcle
LranslLlons whlch has provlded cusLomer feedbackţ whlch led Lo producL developmenL and crlsp llfecvcle
LlmlnaŦ uLLL has become An experL aL curLalllna Lhe end of lLs producL cvcleŦ

Suppller manaaemenL

uLLL manufacLurlna svsLem have a comblnaLlon of bulld producL Lo order and buv componenL Lo plan
processesţ Lhe companv worked wlLh lLs suppllers Lo lnLroduce flexlblllLv ln lLs svsLemŦ uLLL has
concenLraLed lLs suppller base lnLo Lhe suppllers accounLlna for Lhe enouah percenL of lLs purchases

LlquldlLv manaaemenL

1he llquldlLv manaaemenL of uLLL has aeneraLed a huae amounL of llquldlLv LhaL helped flnance Lhe
companv's rapld arowLh and llmlLed lLs flnanclna needs and was Lhe underlvlna facLor LhaL enabled uLLL
Lo earn exLraordlnarllv reLurnsŦ

CurrenL CulLural SLaLe

uLLL oraanlzaLlon has succeeded because of a culLure adapLs well Lo a chanalna markeL as uLLL's
currenL sLaLe of Lhelr culLure has ƍmoved from belna bullL around sLock prlce Lo a culLure of
accounLablllLvţ dolna a [ob well and reachlna oneƌs full poLenLlal as a buslness leader''ţ as uLLL ls
empowered Lo Lake responslblllLv for ƍownlnaƍ Lhelr career whlch allows Lhe companv Lo Lake fasL
acLlon ln Lhe workplaceŦ 1he aLmosphere of emplovee accounLablllLv and responslblllLv lnfluences uLLL's
ouLlook on eLhlcs and corporaLe responslblllLvţ as eLhlcal people creaLe eLhlcal companles noL eLhlcal
companles creaLe eLhlcal peopleŦ lLƌs been a challenae Lo aeL uLLL people Lo undersLand alobal shlfLţ wlll
help bulld manaaemenL ranks as emplovees are encouraaed Lo be crlLlcal of underperformlna

uLLL's currenL culLure sLaLe ls sLlll a somewhaL squlshv wav Lo descrlbe all Lhe Lhlnas LhaL lle beneaLh
Lhe raLlonal and measurable surface of an oraanlzaLlonŦ 8uL mosL manaaemenL LheorlsLs aaree on some
varlaLlon of Lhls baslc deflnlLlonť uLLL's culLure ls made Lanalble bv corporaLe lore and lnsLlLuLlonal
comporLmenLţ as well as companv's aoalsţ sLraLealesţ manaaemenL processesţ sLrucLure and meLhods of
allocaLlna resourcesŦ

Sources of 8eslsLance

uLLL's source of reslsLance ls focused on lLs sLrenaLhs and ooporLunlLles as lL lnvolves lnLernal resources
and capablllLles LhaL have Lhe poLenLlal Lo be Lhe core compeLenclesŦ uLLL's core compeLencles are Lhelr
cosL sLraLeavŦ ln conslsLenL Lo belna an lnLearaLed cosL leaderţ uLLL also produce hlah quallLv ÞCs bv
uslna Lhelr ulrecL 8uslness Model approach and sells Lhem dlrecLlv Lo Lhe cusLomersŦ (lahevţ klna and
naravanţ 1981) uLLL has manv opporLunlLles such as poLenLlal arowLh ln overseas markeLsţ Lhe lndusLrv
ls sLlll ln a arowLh phase and Lhe enLerlna Lo Lhe new producL markeLsŦ uLLL provldes Lhe mode Lo
cusLom Lhe compuLers of Lhe cusLomers' cholce and LasLe and dellver Lhe svsLem Lo Lhe cusLomer as lL ls
Lhe mosL cruclal and crlLlcal success facLor behlnd uLLL CompuLersŦ

uLLL's sLraLeav ls collapslna proflL maralns LhrouahouL Lhe ÞC markeLţ a dlre developmenL for rlvals who
canL keep upŦ uLLL ls prlclna lLs machlnes noL so much such as hlah Lechnoloav producLs buL ls more llke
of an alrllne LlckeLs and low maraln commodlLlesŦ (lahev and naravanţ 1986)

Sources of Leadershlp

1he exlsLlna sLvle of leadershlp uLLL uses ls Lhe ''LransformaLlonal leadershlp sLvle'' as Lhe CLC Mlchael
uell applles Lhls parLlcular sLvle of leadershlp LhaL lnvolves lnsplrlna emplovees Lo Lranscend Lhelr own
self lnLeresLs and work for Lhe laarer aood of uLLL companvŦ (lahev and naravanţ 1986) uLLL arLlculaLes
a vlslon LhaL convlnces subordlnaLes Lo make lmporLanL and poslLlve chanaes ln buslness process and
manaaemenL and relaLes Lo profound bellef on bellefs and values LhaL aoes bevond lLs chanaes and
achlevlna wavs Lo Lranscend proper declslon maklna enaaalna Lhrouah such uLlllzaLlon facLors as uLLL
uLlllzes Lhe l1 as a facLor for Lhe successful runnlna of lLs buslnessŦ (Morrlsonţ 1983) 1he acqulslLlon bv
means of uslna some of Lhe leadershlp sLvles as uLLL wlll make sure Lo value Lhelr cusLomers and
buslness parLners ln a form of lnLerpersonal sLvle of expresslna Lo a level of vlrLuallv lnLearaLed as lf
Lhevƌre lnslde Lhe companv and bv havlna cusLomer lnformaLlon as used for analvzlna and forecasLlna
cusLomer demand and achlevlna Lhe mass cusLomlzaLlonŦ (Morrlsonţ 1983)

uLLL expecL LhaL Lhe success would be forever and Lhev expecL LhaL oLher companles mlahL lmplemenL
such leadershlp models and belleved LhaL lnformaLlon 1echnoloav would plav a vlLal role ln Lhe success
of Lhe buslness as well as Lhe cenLerplece of Lhe buslness per seŦ


no Chanae Scenarlo

1he rlsks assoclaLed ln focuslna much on uLLL's dlrecL selllna process as a means of sLeadv producL
dlsLrlbuLlon can be applled as a no chanae scenarloŦ As alwavs as lL ls a rouLlnarv cvcleţ uLLL comprlses a
reporL abouL a new developmenL ln Lhe unfoldlna currenL buslness slLuaLlons wlLhln Lhe compeLlLlve
aspecLŦ 1here has been confronLaLlon ln manv wavs LhaL lnvolves a ranae of cusLomers and parLners of
uLLLť compuLer lndusLrv represenLaLlves flahLlna Lo reLaln conLrol of buslness maLLersţ compuLer buvers
araulna Lo proLecL sharlna of producLs and servlces sLraLeales as sLruaallna Lo avold leaal llablllLv for
compuLer buslness oraanlzaLlons whlch are seeklna Lo safeauard Lhe rlahLs of compuLer provlders as
well as cusLomers respecLlvelvŦ

A Chanae Scenarlo

lL ls cruclal LhaL ln everv scenarloţ uLLL wlll have Lo encouraae Lhe proper adapLaLlon of posslble
soluLlons LhaL lnvolves cerLaln sLaanaLlon of Lhe sLraLealc developmenL of Lhe overall buslness
LransacLlon as well as Lhe conslderaLlon of wavs ln decldlna for such chanaes ln Lhe exLernal and lnLernal
envlronmenL as lL serves as Lhe maln sLrucLure ln malnLalnlna buslness arowLh and sLablllLv
encompasslna lssues and concerns brouahL abouL bv Lhe reallLv of oraanlzaLlon compeLlLlon lnvolvlna
Lhe cenLer for buslness lmplemenLaLlon and LhaL uLLL as a maLLer of chanae scenarloţ should enaaae
more on sLraLealc prlnclples for arowLh and expanslon ln Lerms of provldlna sLandards of buslness
quallLv amona lLs compuLers LhaL wlll alm ln lncreaslna morale ln Lhe faces of saLlsfled cusLomers
LrusLlna Lhe servlces offered Lo Lhem bv uLLL companv amlcablvŦ


uLLL declded Lo chanae ln manv aspecLs reaardlna lLs buslness sLaLus ln Lhe socleLv llke ln Chlnese
socleLv as uLLL need have Lo be aware of Lhe chanae processţ Lhev are worklna Lo reallzeţ how lL wlll be
reallzed and ensurlna Lhe approprlaLe amounL of manaaemenL resources Lo obLaln such purpose as Lhe
companv relles on Lhelr repuLaLlon ln Lhe uS markeL ln Lerms of alvlna hlah quallLv producLs Lo upllfL
cusLomer valuesŦ 1hereforeţ uLLL needs Lo have a cerLaln chanae of aaenda as necessarllv needed ln
relevanL assumpLlons for uLLL oraanlzaLlon Lo overcome fuLure chanaes LhaL could posslblv affecL
neaaLlvelv on Lhe buslness lndusLrv uLLL belonasŦ

Sign up to vote on this title
UsefulNot useful