The paper “ Dell Strategic Management - Environment, Resources and Competence Analysis, and Future Development“ is an impressive variant on a report on management. Dell computers were founded in 1984 and went public in 1988. The company was founded by Michael Dell at the age of 19 years. The company initial capital was the only US $ 1,000. Dell's computers grew from less than $1 billion in 1992 to more than $32 billion in the 2002 fiscal year. The company was able to capture the corporate PC market in 1990.
The company has grown to command for more than 15% of the world computer market (Scherer, 2007). The company has grown to have over 35,000 employees and manufacturing facilities in different parts of the world. The company has over 730 patents while over 535 are pending. The company's success has been attributed to its unique low-cost business model. Dell has been the most successful company in the computer industry (Yost, 2005). The company deals with PC hardware, enterprise systems, third party products, and services. The company PC hardware is estimated to account for almost 46% of the profit while non PC hardware takes more than 50% of the total gross profit (Indovino, 2013).
The report carries out a strategic analysis of Dell PC. This will involve looking at the strategic review and coming up with recommendations. Strategic reviewA strategic analysis of the organizationDell's strategy is based on business customers through a vision known as a scalable enterprise. The strategy is aligned with industry standards and the famous Dell direct model (Fields, 2004). Scalable enterprise strategy elements are able to relate to the current computing trends which are very dynamic.
The strategy has helped the company to communicate with its customers based on its value strategy. The company has been more committed to product design and reliable delivery as well as providing after-sales services (Moser, 2003). The company Dell direct helped in eliminating the intermediaries, therefore, creating a link between the manufacturer and consumer. This approach was based on telephone sales (Rivkin, Porter & Nabavi, 1999). With the rise of the internet, the company has been able to reach its customers using a direct sales model at low marginal costs.
The company distinctive supply helped a lot in taking advantage of the internet. By going online, dell did not have any conflict with the resellers and distributors. The build to order strategy helped the consumers to configure their own products online. This made Dell computers to be among the first enthusiast of online sales. The company set its first online sales in 1994 and by 1998, the company internet sales accounted for more than half of its revenues. The company build to order approach was able to win a lot of customers globally.
The approach was able to compress the supply chain which gave a high-cost advantage than the competitors (Dell & Fredman, 1999). The ability to customize their orders helped the company to gain repeat customers. The supply chain management practiced by dell is also a major area that has led to success. The supply chain is managed in such a way that it reduces the holding inventory. The company has more than half of its suppliers located outside the USA. Through the internet, the company is able to monitor the flow of orders to the suppliers and feed real-time information.
The suppliers are thus able to have updated information on customers’ demands. This helps the suppliers to adjust their production schedules. The suppliers only manufacture components based on customer’ s demands and ensure that they are shipped appropriately to arrive in time. This strategy has helped Dell to reduce its inventory in the supply chain leaving only the transit existing between suppliers and Dell. The inventory is thus replaced with information. The company has been able to have the lowest inventory in the industry.
This has given the company a competitive advantage in the computer industry (Dell & Fredman, 1999).
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