Dell Inc. Business Policy Paper

4220 Words17 Pages
Introduction Dell Inc. is one of the world’s largest information technology firms, serving individual consumers as well as small businesses and large enterprises. The company manufactures and sells PCs and related equipment, including network servers, printers, displays, projectors, and storage systems. Founded from Michael Dell’s dorm at the University of Texas in 1984 with a mere $1,000, Dell’s revenues have grown to approximately $61 billion in 2009. This stemmed primarily from a direct-sales model and a well-managed supply chain, which provided Dell with significant operating margin advantages over competitors. Despite its historic success and legacy, in recent years Dell experienced difficulties in an evolving marketplace, which…show more content…
Sustainable competitive advantage is limited since competitors quickly imitate others’ successful advances. For instance, all major manufacturers have implemented variations of direct sales and efficient operations – Dell’s main competitive advantages. Retaliation is prevalent, as well: when Dell entered the printer business, HP severed its supplier contracts of printers, cameras, and scanners with Dell.[ix] Thus, strategic actions are often undermined. Conclusion. While still one of the largest in the world, the PC industry is clearly saturated. Four of the five forces affecting industry profitability are high, lowering industry profitability and establishing an unfavorable environment for existing players. To have success in the industry a company must rely on the following key success factors: (1)value chain management, (2)management, (3)technological innovation, (4)reliability and support, and (5)comprehensive product offerings. (For further detail refer to Appendix E: Key Success Factors in the PC Industry)

Firm Strategy

Historically, Michael Dell’s built-to-order concept – selling personal computers directly to enterprises and government organizations as well as, to a lesser extent,
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