Dell Computer Corporation – Strategy and Challenges for the 21st Century

Sales of Dell storage fell overall by 20%, due to a 62% drop in EMC storage rose by 15%. EMC storage has then evolved to Dell technologies. Dell continues this strategy with other acquisitions (Kovar, Joseph F., 2011).

The proposal presented herein gives the background information of Dell Computers Corporation highlighting the current operation for the manufacture of computers. The proposal highlights the potential of the company to increase its market share and profitability through change of its culture from order based to inventory base.

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.

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.

Dell Company has a successful business strategy. As it is following cost leadership strategy. Its success story is hidden in cost proposition, delivery, and unique customization. In response to the high performance and better chances for growth Dell is applying two way strategy parallel to one another.

Majority of Dell’s individual devices are provided by outside suppliers which consist of China, Korea, Mexico, and Singapore. There are over sixteen countries that are involved in the manufacturing process of Dell products; however, China, Korea, Mexico, and Singapore are responsible for the key components of Dell personal computer products. China manufacturers are responsible for keyboards; Korea manufacturers are responsible for LCD and memory chips, Mexico manufacturers provide batteries, and Singapore manufacturers provide hard and disk drives. Penang, Malaysia, Xiamen, China, Bracknell, UK, Manila, Philippines, Chennai, India, Hyderabad, India, Noida, India, Hortolandia and Porto Alegre, Brazil, Bratislava, Slovakia, Łódź, Poland,

Dell set itself apart from the competition by developing a system to better manage its working capital. While competitors focused on forecasting future sales, Dell developed the Build-To-Order model. This allowed for Dell to maintain their inventory cost at a minimum, which in turn lowered their cost of goods sold. Through this process Dell’s Work-In-Process (WIP) inventory and finished goods inventory in relation to present total inventory in the 1990’s was approximately 10% to 20%. This knocks out the competition which stood at about 60%. Dell definitely set itself apart from the competition. Dell made sure to master this process which allowed them to provide a service to

Dell is a technology company, offering a broad range of product categories, including desktop computer systems, storage, servers and networking products, mobility products, software and peripherals and services to manage IT infrastructure for large organizations . Dell are the number one supplier of personal computer systems in the United States, and the number two supplier worldwide. This case study is based on the Dell 2007 SEC filing. Read the latest Dell SEC filings from Yahoo!. I

REF OF GROUP MEMBERS’: TABLE 1 : 5 C’s SITUATION ANALYSIS Factors Dell Company: Resources 1.4 Licensing, Distribution channel, Supply • Intellectual property, Human resources, Patent, Competences Brand acuity1 chain management 24 25 Techno structure • Just-in-Time; CRM; Engineer R&D, Acquisition

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.

To further affix to the high inventory, Dell also found out that the rapid changes in Technogies, will kill it company one day. Reason due to computer loses it value too fast, and it’ll causes huge liabilities to hold inventory. And when forecast is wrong, Michael Dell will have to write off. Dell finally comes out with 5 business strategies model to follow.

Dell entered into China, the world 's fastest growing PC market in 1998. Even though it was a late entrant, Dell initially succeeded through its direct business model, which is primarily aimed at industry and public service units. But this approach will leave the Chinese consumers ' desire to touch the product before buying. Although the actual growth of the zones, the third and fourth tier cities are left behind. But the Chinese grass was tamed domestic brand, Lenovo. It 's relational and efficient supply chain business model, combined with the commercial network helped Lenovo corner 35% market share; Dell continues to dip. But 2005 was a challenging year for Dell. Not only did the company 's struggles in the consumer electronics segment, which leads to the cancellation of MP3 players, but also the core of the PC segment, Dell was the corner of its traditional competitors, such as Hewlett-Packard and Gateway, and new competitors, such as Lenovo and Acer. This resulted in lower average sales prices of Dell products and operating margin weakened. Dell has problems on various fronts; the share price fell to $ 29 in October 2005. (IBS Case Development Centre, 2015)

Global companies play an important role in the business environment, because they connect their business together around the world. A good example of a global company is Dell Inc., an American computer-hardware company, headquartered in Austin Texas, which develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. They design, build and customize products and services to satisfy a range of customer requirements: from the server, storage and Premier Services needs of the largest global corporations, to those of consumers at home. According to the Fortune 500 2006

Dell has always been one of the largest PC makers in the United States. Recently, though its share of the PC industry has been declining. It went from the number one low cost provider of PCs in the world to number 3. Its inability to adapt to the new markets that have emerged has caused the company to fall behind other hi-tech companies such as IBM, Apple, and even HP. I feel this is an important topic because it is an example of a large company that has lost touch with what consumers want and is currently trying to restructure itself in order to gain back the dominance they once had. Consequently, Michael Dell has announced his decision to attempt a leverage buyout in order to retain control of his company. Furthermore,

According to Dave Schneider, an engineering manager for Dell Americas operations, he states “We [Dell]