Dell's Business Strategy

Business Strategy of Dell

Introduction

Dell is one of those companies which were initiated with a very low budget and took over their respective industries by the storm. From modern cyber startup to the international technology leadership, the common chain in Dell's heritage is an untiring commitment to the customer, whether it is corporate or an individual. In today global arena, Dell has emerged as a leader of the IT industry and is expanding its business increasingly, through its product line and expanding itself to the farthest locations.

Discussion

Corporate Strategy of Dell Inc.

Dell is operating on a very wide competitive scope, where it compete other IT giants such as HP and Compaq. Dell has a strategy of being a broad low-cost provider. This strategy is reflected, through the deployment, of the cost efficient approach, of mass customization and the manufacturing locations, that allows, build to order manufacturing, in all of its 8 plants worldwide. Through the world-class manufacturing innovation, Dell has made it possible to built computer to customer specifications, provide them the best value, and yet keep its cost low through keep all of the key value chain components in-house.

Synergy the company is trying to create

Dell is operating in multi related, diversified businesses. Dell has always believed in dealing the maximum parts of the value chain, and that is the reason that most of the upstream channels are owned and operated by Dell itself. Through this, a multi business company, like Dell can achieve economies of scope, where it can use the same value chain for its numerous businesses in order to reduce the overall cost.

Barrier in trying to create the synergy

The Downstream Supply Chain of Dell is strong and up to the benchmark to maintain a sustainable competitive advantage, but the upstream value chain of Dell is not applicable to the global standards, as cultural difference requires a different sort of upstream strategies. In a country like USA people might by product for its features but in Asian countries like China and Japan, people prefer touching the product and then making the decision to buy it. In this case, Dell has to drop the overall approach and has to go for multi-domestic approach, in order to grab a sizeable chunk.

Competitive and Business Strategy of the company

Dell has always sought to outcast its rival on the basis of cost and value. Dell has successfully managed its competitive strategy by managing its cost drivers and promptly redesigning its value chain to drive out costly components. This is the reason that dell has build its own distribution network and after sale support network rather than outsourcing it.

Successes and Competitive Advantage that Dell had over the past 5 years

Dells image of being a low cost provider makes it one of the prior choice for the IT customers. Striving to build core and distinctive competencies, in performing key value chain activities, Dell has managed all of its value chain activities this had given Dell a noteworthy competitive clout in the market and, at least debatably, given Dell some extent of competitive advantage...