abhishreshthaa
Abhijeet S
Pest Analysis On Digi-Key : Digi-Key is the fourth largest electronic component distributor in North America and a broad-line distributor of board level components. It ranks as the 8th largest electronic component distributor in the world. Ronald Stordahl founded the company in 1972 and its name was derived from the digital electronic keyer kit that he developed and marketed to amateur radio enthusiasts.[1] It was called the “Digi-Keyer Kit.”
Mark Larson, who joined Digi-Key in 1976 as its general manager, has been its president since 1985. He has led the company from its initial focus on the hobbyist market to the expanded market it serves today.
In 1995, Digi-Key introduced its website that offers complete online commerce capabilities along with access to product inventory. Digi-Key currently hosts 82 websites in eight supported languages.
In only six years, Digi-Key has moved from 16th largest to fifth largest among the more than 300 electronic component distributors in North America. According to their website, in 2007 EE Times conducted a survey in which engineers rated Digi-Key “#1 for Overall Performance for the 16th Consecutive Year.”
Digi-Key is located in a single, centralized location in Thief River Falls, Minnesota, USA. Its facility measures 600,000 square feet (56,000 m2) and houses over 2,300 employees. Its product distribution center stocks over 500,000 products from over 440 manufacturers and ships to 170 countries worldwide.
Digi-Key serves design engineers and the prototyping market, as well as an expanding role in supplying production quantities for OEMs and contract manufacturers.
According to Baker (1976), marketing is considered as one of the oldest activities of man, but it is considered as the most recent in the business disciplines (cited in Baker 2002, p. 3). Marketing is considered as the process of transition from an art which is practiced to a profession with the strong theoretical foundations (Baker 2002, p. 3). It is the discipline of recognizing the target market; determining the needs and wants of the target market; developing and performing a plan in order to build a relevant as well as differentiated offering; and creating loyal customers that will have an emotional engagement with the brand and products (Cooper & Grutzner 2008, pp. 1 - 2). Above all, it can be characterized by four different aspects: an attitude of mind; a way of organizing the business; a range of activities; and the producers of profit (Fifield 1998, p. xiii).
Background of the Company
Dell had became the largest personal computer vendor in the world during 2001, and it is still continuing to gain market share as well as post profits in an industry that is struggling with the slumping sales and billions of dollars are losses. The company sells 90% of its PCs directly to the final customer, and largely bypassing the reseller channel that accounts for most of the PC sales in the world. The said direct relationship and communication with the customers is one of the most important aspects in their business model that helps to give them competitive advantage over the indirect sales model. Furthermore, it also allows them to tailor their offerings to the needs and demand of the customers by offering different add-on products as well as services, as well as use the Internet in order to offer their customers huge varieties of services. (cited in Kraemer & Dedrick n.d., p. 1).
Marketing Concept and Marketing-Oriented Organization
There are different marketing concepts that are involved in the process of marketing: production oriented product orientation; sales orientation; and market orientation. In the production oriented, the interest of the business is not to the needs of the customers, but to the process of reducing the costs by means of mass production. In product orientation, the quality and features of the products are the most important. In sales orientation, the main interest is to make the product, and then try to sell it to the target and possible market (Fifield 1998, p. xviii; Learn Marketing n.d.).
Marketing-oriented marketing organization is the type of marketing organization in which marketing plans are prepared from the point of view of the different segments of the market. The said plans related to the determination of individual marketing objectives for each and every segment of the market. Furthermore, marketing policies are being determined and different marketing programs are fixed for every segment in order that all of the objectives can be achieved. Furthermore, different plans are being prepared for advertisement as well as sales promotion efforts for each and every segment that helps to keep in view with the situation of the competition in the related segment (Prakas n.d., p. 69).
One of the primary problems of the company is that it is product oriented as well as sales oriented, or its primary concern is to produce the best product, and make the product and sell it to the target market. That is the reason why Dell had become instable in terms of sales during the past years. Marketing-oriented organization does not start the whole process with the product, and the most important factor for them is the customer. It understands that it is not, in fact, selling products but that it is providing solutions to match identified needs and problems of the customers (Fifield 1998, p. xviii).
In the case of Dell, the company focuses on their desktop, on the other hand, customers became more and more interested with the lightweight, industrial strength laptops, or products that could replace their desktop but still do the workload and be portable. Another thing is that the company focuses on online selling, that will offer fast and effective service, but they did not focus on the fact that most of the customers prefer to see, touch and analyze the products in order to know its weight as well as to feel the product (Seeking Alpha 2007).
The problem is that the didn’t realize that it can be dangerous for them to become too closely associated with the product it produces because the customer demand may change, that will force them into new or different technologies in order to retain the market (Fifield 1998, p. xviii).
The said problem can be solved, if Dell will focused on the needs and demands of their customers such as the demand for laptop as well as physical selling in different stores in different part of the globe such as Wal-Mart. Furthermore, the company must be able to focus on the growing demand of people towards stylish gadgets, particularly, laptops.
Mark Larson, who joined Digi-Key in 1976 as its general manager, has been its president since 1985. He has led the company from its initial focus on the hobbyist market to the expanded market it serves today.
In 1995, Digi-Key introduced its website that offers complete online commerce capabilities along with access to product inventory. Digi-Key currently hosts 82 websites in eight supported languages.
In only six years, Digi-Key has moved from 16th largest to fifth largest among the more than 300 electronic component distributors in North America. According to their website, in 2007 EE Times conducted a survey in which engineers rated Digi-Key “#1 for Overall Performance for the 16th Consecutive Year.”
Digi-Key is located in a single, centralized location in Thief River Falls, Minnesota, USA. Its facility measures 600,000 square feet (56,000 m2) and houses over 2,300 employees. Its product distribution center stocks over 500,000 products from over 440 manufacturers and ships to 170 countries worldwide.
Digi-Key serves design engineers and the prototyping market, as well as an expanding role in supplying production quantities for OEMs and contract manufacturers.
According to Baker (1976), marketing is considered as one of the oldest activities of man, but it is considered as the most recent in the business disciplines (cited in Baker 2002, p. 3). Marketing is considered as the process of transition from an art which is practiced to a profession with the strong theoretical foundations (Baker 2002, p. 3). It is the discipline of recognizing the target market; determining the needs and wants of the target market; developing and performing a plan in order to build a relevant as well as differentiated offering; and creating loyal customers that will have an emotional engagement with the brand and products (Cooper & Grutzner 2008, pp. 1 - 2). Above all, it can be characterized by four different aspects: an attitude of mind; a way of organizing the business; a range of activities; and the producers of profit (Fifield 1998, p. xiii).
Background of the Company
Dell had became the largest personal computer vendor in the world during 2001, and it is still continuing to gain market share as well as post profits in an industry that is struggling with the slumping sales and billions of dollars are losses. The company sells 90% of its PCs directly to the final customer, and largely bypassing the reseller channel that accounts for most of the PC sales in the world. The said direct relationship and communication with the customers is one of the most important aspects in their business model that helps to give them competitive advantage over the indirect sales model. Furthermore, it also allows them to tailor their offerings to the needs and demand of the customers by offering different add-on products as well as services, as well as use the Internet in order to offer their customers huge varieties of services. (cited in Kraemer & Dedrick n.d., p. 1).
Marketing Concept and Marketing-Oriented Organization
There are different marketing concepts that are involved in the process of marketing: production oriented product orientation; sales orientation; and market orientation. In the production oriented, the interest of the business is not to the needs of the customers, but to the process of reducing the costs by means of mass production. In product orientation, the quality and features of the products are the most important. In sales orientation, the main interest is to make the product, and then try to sell it to the target and possible market (Fifield 1998, p. xviii; Learn Marketing n.d.).
Marketing-oriented marketing organization is the type of marketing organization in which marketing plans are prepared from the point of view of the different segments of the market. The said plans related to the determination of individual marketing objectives for each and every segment of the market. Furthermore, marketing policies are being determined and different marketing programs are fixed for every segment in order that all of the objectives can be achieved. Furthermore, different plans are being prepared for advertisement as well as sales promotion efforts for each and every segment that helps to keep in view with the situation of the competition in the related segment (Prakas n.d., p. 69).
One of the primary problems of the company is that it is product oriented as well as sales oriented, or its primary concern is to produce the best product, and make the product and sell it to the target market. That is the reason why Dell had become instable in terms of sales during the past years. Marketing-oriented organization does not start the whole process with the product, and the most important factor for them is the customer. It understands that it is not, in fact, selling products but that it is providing solutions to match identified needs and problems of the customers (Fifield 1998, p. xviii).
In the case of Dell, the company focuses on their desktop, on the other hand, customers became more and more interested with the lightweight, industrial strength laptops, or products that could replace their desktop but still do the workload and be portable. Another thing is that the company focuses on online selling, that will offer fast and effective service, but they did not focus on the fact that most of the customers prefer to see, touch and analyze the products in order to know its weight as well as to feel the product (Seeking Alpha 2007).
The problem is that the didn’t realize that it can be dangerous for them to become too closely associated with the product it produces because the customer demand may change, that will force them into new or different technologies in order to retain the market (Fifield 1998, p. xviii).
The said problem can be solved, if Dell will focused on the needs and demands of their customers such as the demand for laptop as well as physical selling in different stores in different part of the globe such as Wal-Mart. Furthermore, the company must be able to focus on the growing demand of people towards stylish gadgets, particularly, laptops.
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