Dell Competitive Advantage and Value Chain Analysis

1551 Words Feb 19th, 2011 7 Pages
Strategic Management: Dell Value Chain Activities Analysis

INTRODUCTION
According to Porter the value chain is defined as the complete flow of products from the suppliers to the customers and management of the information flow in a way that maximizes the consumer satisfaction with the increase in the profit margins of the company.(ivythesis,2009)
Dell’s value chain is one of a kind, they outsource all there components across the world and then assemble and sells it directly to the customers. Dell works in a very complex manner by directly supplying to the customer and by this they skip the market middlemen. They achieve value addition at the same time because of incurring low on total expenditure. This ensures dell to get the maximum
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Therefore Dell is able to sustain its competitive advantage. Dells direct relationship with the customers helps it’s the managers to engineer the products to their needs and are able to predict the sales trends too .. Dell also has an early to market advantage and a technological advancement advantage which other rivals are unable to compete with due to large inventories. Use of different strategy by dell has ensured dell a brand name promising best customer experience and high performance quality. Dell has to ensure adaptation with market trends and continue to offer high quality products and strategise effectively to maintain this competitive edge.

Partnership with Suppliers
Dell gains competive advantage partly because of its creditable supply network. Since Dell functions on built to order model it relies heavily on its suppliers efficiency therefore this relationship is one that is of key importance to Dell.
Dell places high quality standards and demands high speed of delivery from its suppliers. It is through this relationship with the suppliers Dell is able to implement its built to order strtagey and work with lowest level of inventory level . Dell follows the concept of inventory velocity which is related to low inventory level and maximization the speed this was probable only because of the efficiency of the suppliers. Dell in the industry has partnerships with the most component suppliers they adopt an approach known as the extended enterprise wherein…