Distributors Dell Essay Example | Topics and Well Written Essays - 750 words - 10

Distributors Dell - Essay Example From this paper it is clear that, due to this illicit practice which violated the contract Dell had signed with these distributors the company had to file lawsuits against their own distributors. Another mistake Dell made was that it did not foster long term relationships with distributors in order to create partnerships. There was a sense of distrust between the distributors and Dell because the distributors believed that Dell at any time would stop using their services and introduce a direct sales model in China. A third mistake the company made was that it did not invest any resources in to enhance functionality of their supply chain function with its distributors. The company could have gotten more involved in the operation of its distributors by providing managerial and technical assistance. If the company would have established a mutual relationship based on respect and high ethical standards the distributors would have seen Dell as a business allied instead of just another com pany with a product to sell. When a company creates close relationship with suppliers and distributors it enables a business to obtain concessions and favors the firm would otherwise not receive. A fourth mistake the company made was delegating market strategy to its distributors. The communication between Dell and its distributors was weak. Due to this fact the distributors moved the merchandise utilizing their own criteria without taking into consideration any strategic input from Dell. The problem with the direct model in China was that the company was entering a market in which the people had different expectations than the US market. First of all a computer purchase to a Chinese person means a lot more than to a customer in the US or Europe because a worker would have to save money for nearly two years before they could make such a purchase.