1. What are the issues concerning the Latin American market that Dell should address before it enters into Brazil?

2. What kind of information is needed to address the issues identified in question 1? What are the possible sources of the required information?

3. What are your recommendations to Dell regarding the steps for expanding its operations in Latin America?

Dell, which thrived while other PC makers stumbled in 1998, reported a 53 percent jump in profit and a 50 percent jump in revenue for its fiscal second quarter, which ended in July 1998. Unlike most of its rivals, Dell deals directly with customers and builds PCs only after receiving an order. However, all is not well for Dell. While Dell continues to blow away the competition and Wall Street with enormous increases in personal computer sales, it is continually scrambling to bring in and train enough people to keep up with its orders.

The company’s employment had grown 56 percent in 1997, to 20,800, and within a span of three months Dell added 225 people a week—about the same it added every six weeks in 1996. To manage this expansion, Dell has aggressively recruited experienced outsiders and tried to standardize training of new employees. It has also created a culture where managers are rewarded for seeing their divisions split into smaller units and their responsibilities cut back.

Incidentally, Dell Computer Corp. is expected to announce a major foray into Brazil, in a bid to boost its share of Latin America’s fast-growing personal-computer market. Foreign companies with local production plants dominate Latin America’s estimated $6.5 billion personal-computer market.

Compaq Computer Corp., International Business Machines Corp., Acer Inc., and Hewlett-Packard Co. together accounted for 42 percent of desktop and notebook sales in 1997, according to IDC Latin America, a market-research firm. Dell ranked ninth with 1.2 percent of the market. At the company’s annual meeting in July 1998, Vice Chairman Morton Topfer said Dell aimed to open a plant in Latin America in 1999 and noted that Latin America is key to its international expansion. The company already operates regional production plants in Malaysia, Ireland, the United States, and China.