Dell Outsousing

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1. What are the key challenges DELL should be concerned with as it enters the large-scale server market? (3 Points) Unlike PC market, the support service was more critical for server market since a problem in server even for a short time could cause serious problem in the customer’s business. Competitors such as Hewlett-Packard and IBM had begun offering variety support service aggressively to enhance the quality of their service. DELL, through a business model that focuses on direct PC sales, make to order model, low-cost production, and superior customer service, will definitely face some challenges or even have to change their strategy in order to guaranteed their high quality service when they enter the larger-scale server. The…show more content…
They also need to pay for their training cost if they need more skilled workers. Also, the price wars are expected to take the profit even low. These would be a huge challenge to their low-cost production strategy, which may not be able to apply to the large server market. 2. Should DELL outsource the four-hour service level support or should DELL provide the service with in-house resources? Why or Why not? Benefits if DELL outsources 1. Minimize overall operation costs: By hiring a professional organization, DELL can use their expertise, knowledge, and connections to reduce their expenses. An outsource partner will design and execute the most cost-effective service for DELL’s clients. After outsourcing, DELL could obtain less expensive materials, lower transportation cost, and better inventory management. 2. Avoid labor problems and Setup Investment: By outsourcing its field support service, DELL does not need to worry about its labor problem since the outside vendor would provide them the best manpower and facilities for their clients. Also, if DELL keeps the function in-house, they will eventually have to make a major investment in the support service in order to ensure the quality of the service. Outsourcing could help them save the setup cost including the high training cost and facilities investment. 3. Meet customer demand and Increase customer’s satisfaction: Outsourcing could help DELL overcome the problem on inadequate field service. Since
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