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Dell business strategy
Describe dell computer success business strategy
Dell business strategy
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Dell
In its approach, DELL strongly focused on the needs of each particular customer with a special focus government institutions (witch accounted for more than 77%) and large companies.
Also, DELL divided its customers into two groups:
-Relationship buyers for witch it assigned outside and inside sales representatives.
-Transaction buyers were reached via advertisement, catalogues and direct marketing. On the other hand, the rest of the industry focused only on building recognizable brands using advertising.
-Operations
In the past, Dell’s facilities were organized in assembly line fashion just like the rest of the competitors. However, DELL renewed its manufacturing process in its facilities (Austin). This new technique results in fewer defects and more efficiency.
-Outbound logistics
While competitors use four kinds of channels in their distribution process (retail stores, distributors, integrated resellers and direct distribution), Dell uses electronic links to direct some suppliers’ shipments straight to its customers.
-After sale service
in industry surveys, customers rated Dell’s services highly relative to the competition. This ranking was a result of Dell’s online customer support information and also because of the technical support staff representatives via a hotline that was manned 24 hours a day. The support specialists could resolve the problem over the phone in approximately 90% of cases.
-Procurement
Like all other competitors in the PC industry Dell outsourced its products and also encouraged all suppliers to locate warehouses and production facilities close to its assembly operations.
-Firm infrastructure
In its early age, Dell had started up with a few formal control systems. Nowadays, Dell hired a number of specialized managers from other major firms (Motorola, apple) focusing especially on operations and manufacturing.
As a conclusion, all these activities are major facts that made Dell successful and highly ranked among competitors.
· In its marketing and sales approach, Dell has the advantage of being close to its customers and in response to their needs.
· In its operation activity, the new method gave Dell less defectuous products and more efficient ones.
· In its logistic activity, the electronic links allowed Dell to direct suppliers’ shipment straight to its customers.
· Because of its online support information and technical support via hotline, Dell built a confident relationship with its customers.
· The aim of lowering costs pushes Dell to encourage suppliers to locate warehouses close to assembly operations.
· Organization within Dell was of a great importance, especially after the loss faced in 1993. hiring qualified managers and senior manager helped Dell overcome its crisis.
Why has dell been so successful?
1. How and why did the personal computer industry come to have such low average profitability?
By following that approach, the company developed customer loyalty, as their product development was well above average.
Why has Dell been so successful despite the low average profitability in the PC industry?
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A business is feasible when it is able to generate profits, standstill despite of risks and achieve the founders’ goals (Hofstrand, 2009). In order to meet all of these achievements, the researcher need to investigate investment, technical market and commercial feasibility (How to conduct a feasibility study, 2015). In terms of Business model Canvas, the ‘customer segments’ component presents the market feasibility. Dell has targeted four main segments which allow the company to design, produce, promote and deliver different products with different features. In comparisons, the ‘value propositions’ contribute to the technical feasibility when the product is formed and advertised, ready to deliver. Dell has used different strategies to maintain and developed the brand including remain the same brand name for different products. This strategy is promised to stimulate customers’ awareness of the company, thus, attract numerous number of clients and increase annual profits. Finally, ‘channels’ characteristic focuses on accessing technical feasibility. Dell disposes different channels in order to reduce the transportation and warehouse costs as well as guarantee customers with aggressive on-time delivery. Consequently, as the cost has been lowered and the reputation has been improved, Dell is expected to maximize their revenues
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Speaking about the business model of Dell, it has ability to remain on the higher end of the scale for a particular time period. Dell has business model, which primarily focuses on direct selling line of attack. It in a straight line supplies the PCs to the regulars. It does not believe in intermediary, retailers for the business practices. Undeniably, this gives them an edge to serve customer well. Nevertheless, it understood the importance of retailers and start offering products on the premises of retailers, such as Wal-Mart, Sam’s Club and so on. Next, Dell administration is certain of the exclusive business of PCs. As time goes on, however, observing the
Dell Computers Strategy Global companies play an important role in the business environment, because they connect their businesses together around the world. A good example of a global company is Dell Inc., an American computer-hardware company, headquartered in Austin Texas, which develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. They design, build and customize products and services to satisfy a range of customer requirements: from the server, storage and Premier Services needs of the largest global corporations, to those of consumers at home. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue.
Dell made the bold decision in 1994 to eliminate their products from retail stores and focused on mail order customers. In 1996 Dell began selling through their website as well. By eliminating the retail store presence Dell was able to reduce costs, reduce inventory, and maximize profit. Dell utilized a built to order system that allowed customers to specify exactly what they did and did not want on their Dell computer. Dell's just in time inventory system lowered inventory to 6 days and storage costs were saved.
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Historically, personal computer companies produced most of the components for a computer which they assembled into their final products and distributed to resellers. The manufacturing of these components was vertically integrated into the organisation. Dell, as a small start-up, could not build this infrastructure. Instead, they developed a model where they developed relationships with organisations that could provide these components, allowing Dell to focus on selling and delivering computers. By selling directly to customers, initially through mail orders and later by using the internet, Dell avoided reseller mark-up. Dell also enabled customers to order customised computers, which Dell then assembled after receiving the order (Magretta, 1998, p.73-74). “Customers got exactly the computer they wanted and Dell saved money making the computers only when they were ordered” (Hill & Seggewiss, 2008)....
“The Dell Theory of Conflict Prevention,” is a theory that is approved by multiple famous authors. The theories main points are valuable and the theory should be looked upon more seriously. In Thomas Friedman’s essay, “The Dell Theory of Conflict Prevention,” he gives examples of how global supply chains would be constructive to promoting world peace. Friedman feels that if everyone is an ally to each other in some shape or form, then no one will want to engage in war. Madeline Albright would agree with Friedman’s theory according to her writings in “Faith and Diplomacy.” Albright felt that religion should play a factor in the diplomatic system of America, in order for us to maintain some kind of peace with other nations. Friedman and Albright both were looking for a solution to world peace. Albright would agree with this theory from the religious perspective. Appiah argued that an ideal global citizen would be essential to America, in his essays “Making conversation” and “The Primacy of Practice.” Appiah felt that people must have an understanding of each other in order to get along with each other. Both Appiah and Albright would agree with “The Dell Theory of Conflict Prevention.” “The Dell Theory stipulates: No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain”(Friedman 125).