Dell – The reason for selecting Hong Kong

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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. Company mission” Goal: to gain market share and to max. the profit.”

Dell entered Asia Pacific in select markets and began investing in regional facilities, and management, service and technical personnel in 1993. Through its Global customer program, Dell is able to provide a specific suite of service and support to its Asian customers with worldwide operations. It provide the global customers with centralized ordering the billing customized products (including proprietary software installation) and the advantages of local deliver and local onsite services.

In this report an examination will be made of the segmentation, role of relationship marketing and changing role of consumer though Internet and how Dell can influence the customer though their decision making process.Hong Kong is one of the world’s most vibrant success stories with a flourishing economy built on free enterprise and free trade. Moreover, as the entrepot for China in addition to its acknowledged position as an international business centre, a place where deals get done. Moreover, Hong Kong is more important than ever with China’s accession to the World Trade Organization (WTO) , which means unprecedented business opportunities.

Despite the difficult economic situation, Hong Kong still remains one of the most expensive cities to do business, with its strong position than many regional economies that the recovery process will be faster amongst the other regions such as China and Singapore.Although, Hong Kong’s GDP decelerated sharply in growth from 10.5% in real terms in 2000 to a mere 0.1% 2001 but still the best country compare with Singapore 8.6% and China only 7.3%. In additional, China general level of consumer prices was up 0.7% but compare with Hong Kong 3.1% is still lower. It can reflect the different of consumer purchase power between China and Hong Kong. That means China is big but poor compare with Hong Kong is small but rich.

Dell is enhancing and broadening the fundamental competitive advantages of the direct model by increasingly applying the efficiencies of the Internet to its entire business. It means the target customer would be the educated level, experience in using PC and have individual PC at home or office. According to the statistic from www.china, reported that education scheme is still developing and there were only 390,000 graduate students in the universities and institutions base on the population around with 1.27627 billion people at the end of 2001. The educated people are still not many in China.

Refer to the culture influence, it shows that people in China are less opportunities to have an individual PC at home. They only can go to Internet Caf� or office to use PC, it trends to reduce the PC business opportunities though direct market and Internet. According to the IDC Asia Pacific Press Release 2002 showed the PC market in the Asia Pacific region reached 5.39 million units in Q1 2002. The market size is a 12 % increase from Q2 although Hong Kong and Singapore suffered significant double -digit percentage decrease -19.0% and -12.2%. And China has rapidly increased 5.6%. It seems to be more competitive in China market. Legend is a market leader in Asia Pacific and also in China. Dell is only stay in 4th position in Asia Pacific market, it only performs stable in past few months. With a low competitive market in Hong Kong, Dell was placed in the No.2 position in the branded personal workstation market, with 33.4% unit of shipment market share.

To shift successfully into a knowledge economy, Hong Kong must strengthen its IT capabilities, the government is actively promoting entrepreneurship, especially the Pokfulam Cyberport costing HKD13 billion would be completed by 2007. It will create more IT business opportunities. Moreover, Hong Kong is one of the most developed in the region IT spending reached HK$1.71 billion in 2000 and was among the highest in Asia on a per capita basis. More than 2.3 million personal computers were installed in Hong Kong according to “Profiles of Hong Kong Major Service Industries’ last updated: 23 September 2002.

After summaries all the factors, Hong Kong is the best city for Dell to do the PC business because of the less competition in market and culture influence. Moreover, USA market is already over supply and Hong Kong market still have the room to be developed according to software industry information centre.

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