Essay about Matching Dell

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This analysis describes the case of computer and peripherals industry especially the successful management of Dell Computer Corporation which grew twice as fast as its major rivals like Compaq, Gateway, Hewlett Packard and IBM. The main reason for the success of Dell was their "Direct Model" of selling computers which eliminated all traditional channels like distributors, resellers and retailers. Traditionally all its competitors like IBM, HP, and Compaq etc. used reseller, retailers and distributors to sell their computers to end users. IBM was the first company to launch its PC in 1981 and soon held 42% of the market. But the growth of IBM proved to be short
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Another important aspect of the logistics strategy adopted by Dell was that suppliers were encouraged to locate warehouses and production facilities close to its assembly operations to ensure smooth flow of materials across the value chain. This ensured that its value chain was capable enough to handle the largest of orders in smallest possible time frame. Through this value chain the company was able to introduce a wide range of products. All the above stated resources and capabilities decreased operating costs with enhanced customer service and thus helped maintain substantial profit margins through relatively low inventory and capital expenditures in comparison to the revenues. Thus if we talk in terms of the strategy triangle we can say that Dell had the resources and capabilities such as highly integrated sales forces, efficient supplier relations, a able leadership in Michael Dell, cross functional excellence and outstanding corporate culture, which eventually led the company to achieve its core strategy of direct distribution and selling and hence maintain a relatively high growth rate. I would also like to mention that to improve its systems and processes, Dell hired management experience from other companies like Motorola, Apple computer and Intel who focused especially on operations and manufacturing and thus focused on return on invested
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