The company Dell Computer Inc. is a world renowned computer seller around the globe and currently the market leader in the markets they serve. The company started operations with a mission to become the leading computer seller while providing the consumers the best customer service. The prime reason of the company's success has been its approach to reach the customer directly or to be precise, a more direct approach in selling computers. Dell has the concept of selling computers directly to consumers without any intervention of wholesalers and retailers, thus, maximizing the profits.
It has been observed that the company’s global strategy has done very well, but in Brazil the company is facing some critical issues that need to be answered and resolved immediately. Currently, the company is having an agreement with the government of Rio Grande Do Sul but the government has changed few implications of the deal that is why the sustainability of the agreement is doubtful. The company is thinking of either to extend the agreement with the government or to move to other states in Brazil and to avail the opportunities offered there. These issues also reflect on the existence of Brazil and the company also needs to rethink its stay in Brazil and the strategies it needs to follow there or to leave the country.
Our company has the benefit when it comes to funding, marketing and promotion, the cost benefits that we obtain from our direct approach and most importantly, our experience in the industry that will support any decision that we choose. These attributes refer to the strengths of our company as well. Secondly, the company also has the opportunity to invest in the research project, especially in the state of Rio Grande Do Sul through joint venture with different universities of the state. On the other hand, we want projects to be completed with the rapid pace and to move ahead quickly, which is a weak link for the company. Secondly, the new government in Rio Grande De Sul can jeopardize our agreement with the previous government and pose a threat to our existence in the state. Moreover, the Latin American market is quite favorable, and we might lose our stakes in the market if we choose to leave the Brazilian market.
After analyzing the depth of the issue, there are some alternatives that can be analyzed and reviewed that will make the stage of recommendation easier. The first alternative is to quit operations in Brazil and leave the country. This option has a few advantages that the company can avail that includes, cost saving from not hiring any additional staff for monitoring the supply chain and delivery of the products. Secondly, the political condition in Brazil is highly unstable, and the society is at the growing stage, which are not favorable situations for the company. An exit from Brazil will give the company advantage of not facing any political and social threats and not have to bear any such threats. The company can also look for other options or countries that are politically and socially stable as compared to Brazil.
On the other hand, our company will lose the opportunity of starting manufacturing in Brazil and to avail zero tariffs that will come from building a manufacturing capacity in the country. Furthermore, the company will have to search for an alternative route to supply products in the South American market and will possibly lose the clientele in the South American market. Moreover, an extra route will incur extra cost and time that will hurt our operations, as well as revenues.
The second alternative for the company is to shift operations from Rio Grande Do Sul to any other state in Brazil. By moving operations to another site, it will help the company to seek long-term loans on flexible repayment methods. Moreover, the company can avail the opportunity of gaining free land for establishing manufacturing plant and attract many new technological schools for joint technological ventures. On the other hand, this option will require our company to rebuild the infrastructure facilities and bring in the workforce from the United States in order to carry operations smoothly. Secondly, the company will also have to face scarcity of technologically skilled employees......................
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