Summary of Dell Computers Value Chain Analysis

Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems; superior service and support; and products and services that are easy to buy and use.

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.

Using the direct model supply chain design, the company can bring these new products and capabilities quickly to market. These changes in technology can impact how the supply chain functions, so Dell needs to properly introduce these new technologies in an effective manner, and not impact how the computer is post assembled at the manufacturing facility after the customer orders.

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.

Dell has been in the market with a strategy ‘to strive to provide the best possible customer experience by offering superior value; high quality, relevant technology, customized systems; superior service and support and differentiated products and services that are easy to buy and use’

Dell is known for its supplier strengths which in turn supports the just in time delivery model. The secret to this is the well-established collaborative supplier partnerships. The suppliers are mostly based in Taiwan where the bargaining power of the suppliers is less. While some are directly controlled by Dell others are managed by contracts. Dell has to a degree integrated the supply chain but mostly contracts. It is known for its outsourcing model that keeps the cost low. They intend to work with the suppliers sharing the best practices and strive to improve their capabilities by means of developing collaborative networks of mutual dependence and high

Dell products are build-to-order as customers are able to configure and place orders directly with the company via the phone or its website. The advantages to Dell providing custom-made products is that it eliminates selling to wholesalers and retailers, therefore reducing their mark-up

Supply Chain Management is becoming more and more important for the success of today’s business world. Dell has realized this trend from its very first steps and has become one of the most successful PC companies in the world by putting emphasis on its supply chain, orchestrating its build-to-order and direct sales strategies. While most of the literature that covers Dell’s business and supply chain strategies is too theoretical, we suggest an analysis of a lower level using knowledge-based techniques. So, we have developed a business

Dell has used its direct sales and build-to-order model to develop an exceptional supply chain by taking customer feedback very seriously. Dell uses the feedback to further evaluate and when necessary, implement change to improve their supply chain. The company maintains close-knit relationships with customers, and maintains very close, professional relations with their suppliers. Dell collects a larger amount of customer information than is the industry norm. This also works to the company 's advantage.

SUPPLIERS: Dell outsources all of its component manufacturing. But, it does not outsource the final configuration and keeps control over the production and supply chains. Since Dell follows build –to- order and just-in-time, the inventory remains in the supplier’s books till Dell puts the order. Dell’s direct selling model depends critically on lead-time management so that inefficient lead conversion time would not leave the company with overage or underage of components.

In 1984, Michael Dell formed a company now known as dell, Inc. with a strategy to sell build-to-order computers directly to its customers. Customers would have to phone, fax, or order their custom built computers which eliminated the expense of middlemen known as resellers. Between the years of 1986-1993, Dell had to refine its strategy in order to gain market-credibility against its rivals. Such rivals included IBM/Lenovo, Hewlett-Packard, and Gateway.

Dell Computer Corporation’s Michael Dell’s decisive and apparently uncontested vision for the sustained growth of the corporation hinges on advancing the Dell Direct Model. A distinct advantage displayed by Dell versus his closest competitors in this arena-Gateway, Compaq, Hewlett-Packard and Digital Equipment seems to be the synergy created by the integration of marketing communication efforts and their ability to accurately adjust sales staff and production levels to meet the corresponding demand.

Company Resources • Dell 's principal products/resources includes desktop PCs, notebook computers, workstations, and servers. The company also marketed a number of products made by other manufacturers, including CD-ROM drives, modems, monitors, networking hardware, memory cards, storage devices, speakers, and

Dell Inc is a multinational information technology corporation based in Texas, United States of America. It develops and sells computers and related products and services. It is one of the largest technological corporations in the world, and bearing the name of its founder Michael Dell, it employs more than 96,000 people across the world. Dell has grown by inorganic and organic means since its inception. Some of the notable mergers and acquisitions it has been involved in include that of Alienware in 2006 and Perot Systems in 2009. By 2009, the company had sold personal computers, network switches, servers, and software and computer peripherals. The company also into sells HDTVs