Dell Strategy Essay

4916 words - 20 pages

Dell Strategic Management Assignment/Case Study Solution
Dell Strategic Management Assignment/Case Study. It reviews the organizational structure, vision, mission, SWOT, PESTEL Analysis, Strategic Group Map Competition and Product Positioning Map of Dell.
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This report undergoes a strategic management overview of Dell, one of the leading PC vendors of the world with a unique operations model focusing on built to order and direct to consumer frameworks. The report begins with a comprehensive overview of the company’s operations, its hierarchy, location and principle of logistics. An understanding of the ...view middle of the document...

This direct to buyer results in a consumer intensive strategy is called by many as the key to the success of Dell’s model of business (Kraemer, et al., 2000).  The direct relationship with consumers not allows for reduced costs, better inventory decisions and increased revenues but also allows for a better understanding of what the customer requires. The PCs are therefore built to the exact specifications as required by the customer. This is a sharp contrast to the conventional model of PCs which are based on vendors who make attempts to predict the demands of the market. This built to order strategy helps Dell in multiple fronts, reducing overheads and increasing return on investments at the same time as allowing for a better understanding of the market and consumer needs. This specific strategy comes with several complications in operations. The operations need to make sure that all parts and components are quickly available so that customized configurations can be handled quickly. The capabilities of production and logistics of supplies must be optimized in order to make sure that there are quick turnarounds and orders are processed efficiently.
The requirements of such an operations means there is an interesting structure of logistics. There is a focus on outsourcing of activities which are non strategic while the emphasis is laid down on key strategic areas. There is a relationship intensive strategy with partners who provide the components and elements of the Personal Computers so as to provide value added products. The actual production network of Dell is spread around the world ranging from America, Europe to Asia. Some of the production cycles are outsourced to other manufacturers. There is also a reliance on the supply of several components such as CD ROMs and Disk Drivers to outsiders. Partnership with software providers such as Office also allows it to further increase the value of final product. Outside partners are also used for installation, repairs on the site and integration of the overall systems. Resellers are used for recommendation of the product to consumers.
The location factor of Dell is critical to the effectiveness of its built to order model. The basic decisive factor in choosing a location is to understand how costs can be minimized, built to order models can be extended and direct sales can be maximized around the world with minimum time and maximum customer satisfaction. Specific locations and their selection depend upon labor rates in an area, the transportation infrastructure, political barriers and the closeness to high demand areas.
The headquarters originally was in Austin Texas, where the company was formed. Manufacturing units exist in Tennesse as well. Currently the manufacturing units in America are limited to these two areas. Brazil has a manufacturing unit of Dell in Eldorado do Sul. This location point was decided on the basis of the need to supply the South American market. There were also...

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