Question

1.Porter’s Competitive Forces Model, Porter’s Value Chain Model, and strategies for competitive advantage

a)Describe Dell’s business model? Then mention who Dell’s major competitors are? Then, elaborate on what Dell’s competitive strategies are?

b)Describe the tasks that Dell must accomplish for each primary value chain activity.

c)How would Dell’s information systems contribute to Dell’s competitive strategy, given the nature of its business?

Answer 1

a) Dell's Business Model

Dell’s business model involves designing and developing unique products and services.

While the company engages in design and development , the actual production is outsourced to third-party contract manufacturers with a prime aim of cost minimization and ensuring quicker delivery of products. Dell has its manufacturing facility located in countries like China, Indian, Brazil, Texas, Malaysia & Poland.

Dell's Major Competitors

The Major Competitors of Dell are listed Below

• Lenevo
• HP
• IBM
• Apple

Dell's Competitive Strategy

• Dell started gaining competitive advantage by its famous build-to-order selling approach. It is this Just in time strategy that enabled Dell to operate at lowest possible inventory in the industry.This provided Dell phenomenal cost advantage.
• Dell further adopted the concept of Direct selling , which helped Dell in bypassing additional cost/margin taken by intermediaries like wholesaler and retailer. In addition to this Dells offering to its customers had the option of customization , making the brand very very customer centric
• Dell also had a very close relationship with its suppliers which had direct access to real time information related to demand trends and volume expectations.

b)

Dell's Value Chain

Inbound Logistics: – More emphasis on the concept of Just In Time with suppliers located in almost all major cities. The company should come up with more production facilities.

Operations: – Implementation of Lean practices alongside the concept of assembly line.

Outbound Logistics:- Increase in share of inventory for retailers and wholesalers to capture standardized selling market as well.

Marketing and Sales: – Promote brand as for the customer by the customer image. This primarily because customization is given by customers.

Service: – Provision of AMC or enhancing the product guarantee by nominal charges.

c)

Contribution of Information System towards Dell's Competitive Strategy

• Dell makes a very strategic use of information systems to gain competitive advantages and accomplish business goals. Adequate exchange of data takes place with the suppliers to support build to order approach.
• When Dell receives an order, its data processing systems will identify specific components and automatically deliver the request to appropriate suppliers.Dell ERP & Supply Chain Management System remains integrated with suppliers ERP with help of electronic data interchange (EDI).
• Dell also has its own website www.valuechain.Dell.com which is utilized for faster sharing of information with suppliers.
• Dell also shares its forecasting information with production partners with the help of its extranet system monthly.
• Dell uses its extranet, EDI and several electronic communication media for its service supply. The company is a firm believer of full integration of its service and support.