DELL COMPUTERS

DELL COMPUTER VALUE CHAIN ANALYSIS

DELL COMPUTERS AND VALUE CHAIN ANAYLSIS

Introduction:

This assignment is discussing the online and offline environment of Dell Inc. Furthermore, this study will study how Dell is creating value in its products through its value chain, by discussing the value chain of Dell Inc. Towards the end, this study will give some recommendations for the companies in the IT sector for increasing their sale over the internet.



Dell computers:

Dell Inc is a multinational IT based company that develops, sells and supports PC and related services. It has its head office in Texas, USA. The company is named after its founder, Michael Dell. Dell is one of the largest technology based organization of the world and has over 95,000 employees. Since its inception, Dell has been acquiring companies in his field. When dell started its operations in 1984, it started selling by taking orders from customers over the telephone, and the computers were built according to the demand of the customers. (Fredman & Dell 2005, Pp.97)

Online environment of dell:

The online environment of dell refers to the online selling of PC's by Dell. Dell calls it as direct sales model, in the direct selling Dell does not use the retail channels for selling its PC's but reaches its customers through their website. The customers of Dell can place their order through the website of Dell, and then they can manufacture computers according to the requirements of the customers. In this way, dell creates a direct association with every customer, which is a tremendous competitive advantage. Therefore, they have complete knowledge about their end customer, their buying preferences, information that gives Dell an opportunity to present value-added products and services to their customer and stay close to them all the time. This practise provides Dell with a wealth of information for product development and customer relationship management. (Fredman & Dell2005, Pp.97)

Their online supply has also enabled Dell to build very close relationship with their suppliers; their suppliers are connected with Dell through their website. (Gosselin, Stormer& Meier , 2009, Pp.120,)

Dell has divided its customer base into 3 major segments, and these segments are large organizations, small and medium sized organizations and small home based customers. There customers are spread everywhere with no customer having more than 2% contribution in the total sales of Dell. Their focus is their corporate customers, who form about 65-70 of the total revenue. With their large customers, Dell is working with them as their business partners, they are not just their PC vendors but they will work in place of the IT department of their customers. They have developed vertical integration with their large customers. (Sand 2009, Pp.45)

Dell provides its corporate customers with two main facilities; these are “Premier Pages” and “platinum Councils”. The premier pages allows the customers to manage all their transactions from Dell by themselves, they do not need to consult anyone and can order any thing they need from the premier page. This saves them from the hassle of asking for quotations, ...