Dell Inc. : Business Level Strategy

Dell. Dell’s products—computers, servers and printers—are commodities. Dell tends not to develop the technologies underlying these products. Instead, it purchases the components from firms that develop the technologies (semiconductors and computer software). Dell’s direct-to-customer marketing strategy is not unique, but the extent to which Dell performs this strategy better than anyone else in the industry gives it a competitive advantage. Its size, purchasing power, quality control, and efficiency permit it to operate as a low-cost provider.

The advantages of Dells model are: The internet allows Dell an extensive scope and reach for its products at a relatively low price (Dedrick and Kraemer 2001). Using the internet Dell has been able to automate many of its business functions, such as product configuration, order entry and technical support (Dedrick & Kraemer 2001), therefore the company can achieve higher revenues without customer service costs increasing greatly. Online configuration ensures that the customer gets exactly what they want. Dells build to order strategy means that inventory levels are low, they only hold approximately 4-8 days of stock, therefore inventory costs are low (Breen 2004).

Dell is a multi-national information technology corporation which designs, develops, manufactures, markets, sells, and supports a range of computer systems and services that are customized to individual customer requirements. As one of global PC suppliers, Dell set 2 strategic objectives to achieve, to be the No.1 global market share PC supplier, and optimize the balance of liquidity, profitability, and growth with a focus on increasing the mix of their product portfolio to higher margin products and recurring revenue streams. (Dell annual report 2009, pg 4). Dell existed in one of the biggest

Present CEO and chairman of the board Michael Dell founded Dell in 1984, as a leading technology provider that designs, develops, manufactures, and supports PCs, software and peripherals, storage and servers, and associated services. With operations in four geographic areas and additional business centers and manufacturing sites in more than 20 locations around the world, Dell is able to reach more than 24,000 retail locations worldwide. Dell’s ability to process in-depth customer knowledge and the tailoring of solutions to the specific customer, through a direct customer sales model, catapulted the company in 2008 to the top PC provider in the United States and second worldwide in terms of sales.

Dell is a leading computer technology organization. Dell constantly keeps up with changes in their market to stay competitive. Dell is focusing on cost from issues of storage to transportation of products.

Dell is a computer corporation recognized for manufacturing computer systems through parts assemble. In 1983, Michael Dell saw an opportunity in using IBM compatible computers for a new assembly line that can be sold to local businesses. The idea as explained by Michael Dell, in one of his interview, is that in the early days of computers' manufacturing, companies had to be able to produce every part of the system. As the industry matured, companies started to focus on single parts and to become specialized in creating items that can be assembled with other parts to prepare a computer. As a result, Dell understood that to have a competitive edge in the market, they needed to

When Dell started its campaign to allow customers to configure and customize their computers according to their needs and budget Dell had serious issue regarding Inventory Management. Dell needed and Inventory which comprised of right computer parts at right time and right place. To manage this entire Dell

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Affordability of latest technology through Direct Sales Services - Dells uses direct customer relationship or as it calls it “customer intimacy” as its distribution strategy. This means meeting customer needs directly and cutting middleman interference as much as possible. This is done either through dedicated sales representatives, telephone based sales and online at www.dell.com. As a result, the purchase price would be lower than other competitors.

The Dell Computer Corporation was founded in 1984 by Michael Dell, who began the company by refurbishing IBM clones out of his dorm room for extra money. From the beginning and through the 1990’s, the company grew quickly and was very successful. Dell used a cost leadership strategy and focus on creating products that were already in the market place, but changed the timing of production and the method of distribution that was in place with the company’s competitors by assembling computers to order and selling directly to the customers. The company focused on creating value for customers and meeting their needs, but into the

Direct Approach: Unlike competitors Dell has done away with Resellers thereby reducing costs and offering better customer satisfactions.

In 1990, Dell Computer tried selling its products indirectly through warehouse clubs and computer superstores, but met with little success, and the company decided to re-focus on its more successful direct to consumer sales model (Frick, 2013). In 1992, Fortune magazine included Dell Computer Corporation in its list of the world’s 500 largest companies.(www.dell.com). That was when Michael Dell became the youngest CEO of a Fortune 500 company. Michael Dell has been trying to improve efficiency since the third grade (www.dell.com). When he heard an advertisement that said he could receive his high school diploma by taking a test he immediately took the opportunity. Although he failed at graduating high school at 8 years old, he did

This enabled strong customer relationships and increased customer satisfaction. One of the characteristics that distinguishes Dell from its other competitors is that Dell provides the facility to customize computers of their choice and taste and deliver the system to the customer as it is. This is the most crucial and critical success factor behind Dell Computers. Dell’s direct to consumer model concept helped them reach above-average returns and remain in business today. Customers have developed a brand-name loyalty to Dell because of their cost efficient differentiation strategy. Their strategic moves for their products created an image for themselves in the market and is the reason for their dominant existence. This enabled them to earn more market share in the industry. The customer segmentation that Dell focuses on is the corporate segment and large businesses form the majority of its clients. This customer segment targeting is more likely a result of its operational strategy and not the other way round. However, with corporate segment customers seeking high performance, reliable, affordable solutions, Dell fits in comfortably. Dell also appeals to those customers who want hands on experience of the latest technology and the idea of customized computers is very appealing. For Dell, it focused on providing superior quality services to its customers through its sales representatives. It also shifted

The business model of dell which concentrates on a built to order framework where the middleman is removed and PCs are sold directly to the end buyer

But there is one company that has stood and fought its rivals. The name of that company is Dell. Started on November 4 1984 by Michael Dell, Dell grew by the early 90’s to become the largest seller of PCs and servers. The company currently sells personal computers,