Dell Business Case Study

1061 Words3 Pages
bulb-icon

Recommended: Dell just in time manufacturing

Business Model

Dell has managed to become remarkably successful in a short span of time by following a direct "business to customer" model. By selling computers directly to customers, they have been able to best understand their needs and provide effective solutions to meet those needs. Dell built PCs to order, so customers received only what they wanted. Dell's just-in-time inventory system allowed them to order only parts that customers demanded, thus keeping the minimal inventories and enjoying the cost-reductions which in turn were passed to customers. Dell's extensive use of e-commerce contributed to further cost minimization, reduced the order and delivery time for customers, and customization. There are three golden rules at Dell: disdain inventory, always listen to the customer, and never sell indirectly.

Key Issue(s)

China had been identified as a very promising market and Dell has set the goal to improve its rank from seventh to second place in this PC market. However, Dell faces many challenges in this market. The Chinese government actively promotes the Chinese PC maker "Legend" who dominated the market; penetration of the Internet is relatively slow; software piracy is rampant; competition is intense. In addition, there is fierce competition for market share and Dell's competitors have started imitating Dell's business model. Dell needs to determine how it should modify its strategy to succeed in the Chinese market.

Alternatives and Evaluation

1. Open up Dell Retail Stores

The Chinese are uncomfortable with purchase high-ticket-price products that cannot be viewed before purchase. This is one of the reasons that Dell has invested in door-to-door sales calls. If Dell were to open up retail outl...

... middle of paper ...

...s option addresses the hesitance of customers to make such a large purchase for a product brand that is not well established in China. This option will allow customers to transfer residual risk and implement a disciplined approach to technology rotation. I believe that for China, customers will be more likely to choose Dell products because this is in a sense a "try before you buy" opportunity. There won't be such a large initial investment, plus they can feel secure that the purchase they make will not become obsolete technology in the near future. I believe that this option will help Dell established a more recognized, stronger brand name and that it will allow Dell to establish long-term relationships with their customers. This option is in line with Dell's plan for growth in China and will allow Dell to leverage its strengths to make it a successful strategy.

Show More
Related

  • The Introduction of the Samsung Color TV

    2503 Words  | 6 Pages

    •     Mr. Chung and his division of Samsung, SCH, has been in the Chinese market for some time and have a good read on the society and the current trends in the political, economic, and social events in China. Their recommendations for moving into the high-end market should be followed.

    Read More

  • Asos Case Study

    901 Words  | 2 Pages

    To gain a big market share is the second reason for ASOS to enter China market.

    Read More

  • Ford Company Case Study

    1069 Words  | 3 Pages

    This concept created the big change that causes the competitive advantage. Dell eliminated reseller 's markup and the expenses and the risks associated with conveying huge amount of inventories. This could not have happened without many other action that Dell has taken into consideration. So, other companies had to had to create all the components themselves. Indeed, all the various pieces of the industry had to be vertically integrated within one firm. These companies needed to manufacture enormous structures to create everything a PC required. They had no real option except to end up being expert in a wide array of components, some of which had nothing to do with creating value for the client. On the other hand, Dell has a different approach that they establish a partnership with different companies to help them produce their products. So, they have fewer things to manage, fewer things to go wrong, which enabled them to manage their inventories. As a result, this model the direct model has allowed Dell to leverage their relationships with both suppliers and customers, which helped them to build a much larger firm in no

    Read More

  • Compare and Contrast Between Michael Dell and Andy Grove

    659 Words  | 2 Pages

    Michael Dell is the founder and CEO of Dell Computers Inc. one of the largest sellers of personal computers in the world. His contribution to the computer industry is the “one-to-one relationship between the company and the customer— there are no intermediaries, no middlemen” (Krames, 2003, p.59). Not only did he relinquish the middleman, he also perfected combination of the bottoms up strategy and the just-in-time (JIT) by waiting till he received orders from the customer to build computers. In doing this, Dell increased its return on investment (ROI) while reducing its inventory overhead cost.

    Read More

  • Dell's Effect on Profit Margins of the Computer Industry

    1137 Words  | 3 Pages

    Why has Dell been so successful despite the low average profitability in the PC industry?

    Read More

  • The Success of Dell Computer

    1176 Words  | 3 Pages

    1. How and why did the personal computer industry come to have such low average profitability?

    Read More

  • The Health of Best Buy

    2476 Words  | 5 Pages

    In these challenging times where technology changes on daily basis, companies are striving hard to focus on customers’ expectations and needs. This has increased expectations from the managers who are constantly trying to come up with new ideas and innovation to survive in the retail business. The health of any business is dependent on the way they are different from their competitors. In order to increase sales the company is completely dependent on uniqueness and the best way to satisfy the customers. Best Buy is committed to provide customers with a unique experience. In order to serve the customers to their best ability, Best Buy has changed its business model from Product Driven to Customer Driven.

    Read More

  • An Analysis of China'a E-Commerce Industry

    1472 Words  | 3 Pages

    A little more than 10 years ago, China’s path to e-commerce leadership would have been difficult to foresee, even as the tech boom in the US and other markets saw the development of e-commerce as an important B2C and C2C channel.

    Read More

  • Dell Inc. Case Analysis

    1028 Words  | 3 Pages

    Dell Inc. weakness was cell manufacturing because their assembled computers were being shipped five to six days after the order was placed. It is an inconvenience for the customers to always send their computer away to have it repaired. First, they are left without internet access. Second, the time it reaches Austin, Texas, have it repaired, and shipped back can take days. The company opportunities were the Dell U.K. that open business in 1987 and in that country it was a lot of companies selling cheap computers. Dell Inc. strides on loyalty among customers and employees, and that could only be derived from having the highest level of service and performing products. Segmentation within the company enables them to measure the efficiency of the business in terms of assets use. Dell Inc. evaluates their return on invested capital in each segment, compare it with other segments, and target what the performance of each should be.

    Read More

  • How have some Chinese companies achieved success in foreign markets?

    602 Words  | 2 Pages

    Internationalization Phase, during this phase Chinese companies focused on ‘building brand, localization of products and services for new markets, and differentiation of products to support higher margins’ they did what was ‘good enough’ for the market (Teagarden & Cai, 2009:78). An important issue during this phase was to research and develop the products, and to keep the key talent of the company, such as managers and engineers.

    Read More

  • Lenovo- technology company

    1746 Words  | 4 Pages

    One of the largest technology company in the world, Lenovo had a humble beginning as a small Chinese firm founded in 1984. The company showed modest growth throughout the rest of the 20th century. It wasn’t until the company’s acquisition of IBM’s personal computer business in 2005 (Martin, 2014) that the company began to gain prominence in the technology industry. Lenovo’s innovation and strategic decision making has allowed the company to evolve on a global platform and enabled it to become one of the leading technology companies in the market today.

    Read More

  • Lenovo: Building A Global Brand

    748 Words  | 2 Pages

    The company was focus more on different aspect from their competitors. In 1996, the company introduces its own laptop model and while competitors focused on providing new technologies for the business market, Legend designed desktops that the average Chinese consumer could use. The company soon became China’s PC market leader (21.5% share) and well known throughout the Asia-Pacific region in 1999.

    Read More

  • Dell's Competitive Strategy

    2470 Words  | 5 Pages

    This strategy was carried out by selling via phone, fax and direct sales, instead of selling through retail stores. Not only this approach differentiated Dell from other competitors at the time, it also reduced its operating costs as it did not have to rent expensive retail space. In addition, Dell’s strategy of selling customised computers allowed it to hold only a small amount of inventory, which reduce...

    Read More

  • Dell Distribution Channel

    1261 Words  | 3 Pages

    Dell Inc had very effectively used the direct marketing channel for the sales of computers to the end consumer. When all the other pc makers were selling through retailers and distributors, Dell had started efficient use of the direct channels.

    Read More

  • The Dell Theory

    1811 Words  | 4 Pages

    “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).

    Read More

More about Dell Business Case Study

Open Document