Dell have used their internal resources and competences as a way of gaining a competitive advantage to great effect over the past few decades. There are three basic resources: tangible assets, intangible assets and organisational capabilities. Dell’s greatest resource in generating a competitive advantage has been their direct model approach to sales. This direct model approach means that customers buy directly from Dell through their website. The advantages this brings are that the customer can customise their product, buying exactly what is right for them. Whereas competitors offer the customer the choice of number of models, Dell allow the customer to choose exactly they want. Dell’s direct model means that Dell does not have to sell via …show more content…
One of Dell’s greatest intangible assets is the reputation of the company. This reputation they have built for themselves gives them an advantage over their competitors as customers are more likely to trust Dell’s products so if it became a choice of two products, the name Dell may be enough to influence the buying decision. Along with the reputations surrounding the products, Dell also holds a strong reputation for their customer service. “Dell’s free customer service system is open 24 hours a day, seven days a week” (Cusham et al., 2003, p.23). Dell use offshoring for their call centre customer service teams. Using offshoring gives a competitive advantage as it allows them to use low cost labour while still achieving high levels of productivity. However, offshoring customer service can be dangerous as the cultural differences may be negative. The accents of some staff may be difficult to understand and infuriating for the customer as well as the added cost of having to train the unskilled …show more content…
However, there are only two suppliers of the processors which are used in Dell products so these two companies will have high supplier power due to the lack of competition within their market.
Buyer Power: Dell has a large number of competitors including Apple, HP and Lenovo. The large number of competitors and the increased saturation of the computer hardware industry over the years has meant that the main factor for the customer to choose another brand would be the price. There are no additional costs to the customer if they wish to switch brands which makes it very easy for them to do
But First, Training Foreign Replacements” reveal the importance of the article to an international marketer. Outsourcing and offshoring prove to be the few topics one can learn in this article. An international marketer gains a better understanding of outsourcing and offshoring by recognizing the effects on the company, business, and economy. An important aspect of an international marketer’s career is to assess the market from a global perspective. An international marketer needs to know whether a company is outsourcing it’s employees incase they do not and need to market and appeal to potential employees for the company. An international marketer needs to understand the effects and how the topics outsourcing and offshoring work to gain a better grasp the company or business as a
Outsourcing simply means acquiring services from an external organization instead of using internal resources (Butler, 2000). By using outsourced resources, organizations can gain a competitive advantage by utilizing contingent staff to accomplish strategic goals without incurring the fixed overhead. By focusing on the leading edge and highly specialized skill sets, outsourcing providers can often offer higher quality services, or at a lower price than the client organization. Typical reasons for outsourcing go beyond simple contingent staffing. Outsourcing providers are able to maintain economies of scale with regard to specialization (...
Why has Dell been so successful despite the low average profitability in the PC industry?
Dell's strengths were oriented around listening to the customers, responding to the customers, and delivering what the customer wanted. The direct relationship was first through telephone calls, then through face-to-face interactions, and now through the internet. It has enabled them to benefit from real-time input from real customers regarding products and future products they would like to see developed. The company also doesn't use reseller or retail channels because every computer is built-to-order, which allows less inventory. The direct model allows them to take the pulse of whatever market and provide the right technology for the right customers.
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 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.
In comparison with Apple, Walmart uses a very expansive network of vendors to source all their types of different items. Apple’s key components are typically sourced from a single manufacturer and used across their whole product line. Apple’s devices are available only in a limited number of configurations, allowing the component sourcing to be managed and streamlined. Walmart’s vendor network supplies thousands of different products, making the supply chain larger and vendors more diverse. Walmart’s main controls are placed around cost, and while Apple is also cognizant of cost, they also have the capital to pay to ensure they receive high quality cost and
We often dream of owning the best computers in the world. However, various options from the wide range of manufacturers tend to make it difficult to do a selection. Therefore, picking a reliable model that is stupendous is inevitable; a computer that even after four years, it will still be outstanding. Knowing the chances of its success is fundamental. This means that a good machine should break less often. Additionally, a company that has a great technical support, which helps a computer owner to receive timely and reliable customer support services. What is ignored are the outliers. There are companies that have had awful record of accomplishment of crappy and extremely expensive computers. One must ensure they purchase from established and genuine dealers.
Apple was founded in 1976 by Steve Jobs and Steve Wozniak, who were determined to change the way people were utilizing the computer. From then Apple has been able to grow its business into one of the most prominent company in the world. Apple Inc. is an American company that creates software, cellular phones, computers and consumer electronic products as well. Some of the Apple products most recognized products are the iPod, iPhone, Mac, and the recently new iPad. They have established over 300 retail stores in about 10 countries around the world. Many people do not know this, but also service numerous of computer software, such as Mac OS X operating system, Final Cut Studio, Logic Studio, iOS, which is a mobile operating system that hosts
The major competitors of Apple are Dell and Samsung out of which Samsung is the
...market share, Intel progressively reduced licensee and developed process and manufacturing infrastructure to manufacture chips by itself. Thus, it contained the “profit pool” in its value chain. Thereafter, successful tie-ups with ‘horizontal’ complementors like Compaq 7 Microsoft led to wrecking of IBM’s hegemony. With established leadership in microprocessor industry, Intel strategically started ‘Intel Inside’ and ‘Runs better on Pentium processor’ programs to improve brand recognition. As more and more end-customers identified Intel and microprocessor as the most important component in a PC, Intel could now command higher power and bargaining position with OEM and software manufacturers. This ensures demand-side control.
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
Dell’s initial competitive strategy, when it was founded in 1984 by Michael Dell, was to focus mainly on differentiation. Its strategy was to sell customised personal computer systems directly to customers, which was a rapidly emerging market at that time (1). This was done by targeting second-time customers, those that already understand computers and know what they wanted. Meanwhile other companies at the time was selling “’plain brown wrapper’ computers” (2). By offering customisations, Dell gained a better understanding of customers’ needs and wants. This helped the organisation position itself differently against the more popular brands, such as Compaq and IBM.
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.
“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).