Dell tries to crack South America

Read and memorize the following words, words combinations and word-groups:

1. Dell Computers, the Texas-based computer-maker that was among the pioneers of online ordering, is preparing to attack the difficult Latin American market.

2. Soon, Dell will start making computers at a new factory in the small, southern Brazilian city of Eldorado in its first manufacturing venture in South America. Within a few hours' flying time of Eldorado lie four of the conti­nent's main metropolitan regions - Buenos Aires, Rio de Janeiro, Sao Paulo and Santiago - which gener­ate about half the region's wealth and where most of the computer-using populace is concentrated. Dell hopes to serve all these markets - including more distant regions in northern Brazil and the Andean countries from Eldorado.

3. According to Dell's plan, aircraft from Miami will land at a nearby international airport car­rying computer components that will be sent straight to Dell's facto­ry. Together with parts delivered from suppliers in Brazil, they will be assembled to order, packed and delivered to consumers across the continent.

4. The challenge for Dell is not only to mount an effective marketing campaign to educate cus­tomers about online ordering, it must also manage a complex logis­tics system and deal with the problems of unreliable road and air transport networks. And it must operate in half a dozen volatile Latin countries, with unpre­dictable governments and consumers as well as well-established competitors.

5. Dell could not afford to ignore the South American market much longer. It currently exports computers to a few Latin American countries such as Mexico and Colombia, but has never sold to markets in Argentina or Brazil. Latin American consumers last year bought 5 million PCs and demand is growing at 15 per cent a year. Growth is likely to remain strong for some time to come: in Brazil, the region's largest market, only 3-4 per cent of the population owns a PC.

6. Dell is not the first company to view South America as a single market. For a decade, Ford and Volkswagen and many other multinational companies have operated in the region's main countries as if they formed one integrated market. That was a natural reaction to falling import tariffs and consolidation of the Mercosur customs union linking Argentina, Brazil, Paraguay and Uruguay. However, the distances, the red tape and the animosities between national governments often make fulfilment of this strat­egy difficult.

7. Dell decided to locate in Brazil because it is the region's biggest market and because the govern­ment gives computer companies substantial tax incentives as part of its plan to develop local high technology industries. If Dell meets Brazilian local content crite­ria and attains agreed production volumes, its products are consid­ered to be 100 per cent locally made and automatically gain duty-free access to Mercosur countries.

8. However, there is little Dell can do about the internal transport networks in Brazil or the bureaucracy in neighbouring countries. Although roads, air transport and delivery systems are tolerably effi­cient in south eastern Brazil and parts of Uruguay, Chile and 100 Argentina, Dell may still find it is struggling to co-ordinate opera­tions and sales over a vast region.

From the Financial Times

Exercises

Exercise 1. Find where in the text it is said about the points given below. Put down the number of the paragraph:

1. problems Dell may face in Brazil

2. Dell’s first manufacturing venture in South America

3. reasons for choosing Brazil

4. Ford and Volkswagen experience at the market in South America

5. Dell’s plan of doing business in Brazil

Exercise 2. Say if the following statements are true or false:

1. Dell plans to import computer components from Miami.

2. Dell is the first company to view South America as a single market.

3. Dell hopes to serve four of the conti­nent's main metropolitan regions of South America.

4. Dell has never sold to markets in Mexico and Colombia.

5. Dell Computers is preparing to attack the difficult Latin American market.

6. Ford and Volkswagen have been operating in South America for five years.

7. Dell hopes to sell its computers duty-free to Mercosur countries.

8. In Brazil only 3-4 per cent of the population owns a PC.

Exercise 3. Answer the following questions:

1. Why has Dell decided to attack the South American market?

2. Why has Dell chosen to locate its manufacturing plant in Brazil?

3. What are the continent’s main metropolitan regions famous for?

4. What is the challenge for Dell ?

5. What was the business strategy of other multinational companies at the South America market? What was a reaction to it at this market?

6. Was Dell confronted by difficulties at the South American market?

7.What is demand for computers in Latin America and Brazil?

Exercise 4. Explain why Dell Computers has attacked the difficult Latin American market.

Exercise 5. Analyze Dell’s business strategy of entering a new market.

Exercise 6. List problems Dell Computers can face with at the South America market.

Exercise 7. Prove that Dell could not afford to ignore the South American market much longer.

Exercise 8. Explain why Dell decided to locate in Brazil.

Exercise 9. Make up a plan covering the main ideas. Discuss the text according to the plan.

Unit VI

Date: 2015-01-12; view: 5197