Dell tries to crack South America

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

ordering - замовлення

manufacturing venture – промислове підприємство

populace – простолюддя

aircraft – літак

part – деталь

be assembled – бути змонтованим

challenge – виклик

mount – встановлювати

volatile – мінливий

operate - працювати

unpre­dictable – непередбачений

well-established competitor – авторитетний конкурент

decade – десятиріччя

import tariff –ввізне мито

consolidation – зміцнення

currently – поточно

red tape – бюрократизм

animosity – ворожість

customs union – митний союз

fulfillment – виконання

substantial – значний

tax incentives – податкові пільги

content – вдоволення

gain – одержувати

duty-free access – безмитний доступ

Mercosur – загальний ринок країн Південної Америки (Аргентина, Бразилія, Парагвай, Уругвай)

tolerably – помаленьку

vast - величезний

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