EXECUTIVE SUMMARY As one of the world's leading direct computer systems companies and a premier supplier of technology for the Internet infrastructure, Dell's competitive advantage is its direct customer focus. Constant interaction with its customers online and via the telephone gives Dell the ability to understand unique computing needs that drive individual and enterprise productivity. Even though growth rates for the computer industry are expected to be less than previous years, Dell can still successfully operate, enjoying healthy sustainable profits. A main problem is a sagging US economy which Dell has no control over and a saturated PC market with lower profit margins from industry price wars. Dell should focus on being a “market taker”, instead of trying to be a market maker and capitalize on its 1
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EXECUTIVE SUMMARY
As one of the world's leading direct computer systems companies and a premier
supplier of technology for the Internet infrastructure, Dell's competitive advantage
is its direct customer focus. Constant interaction with its customers online and via
the telephone gives Dell the ability to understand unique computing needs that
drive individual and enterprise productivity. Even though growth rates for the
computer industry are expected to be less than previous years, Dell can still
successfully operate, enjoying healthy sustainable profits. A main problem is a
sagging US economy which Dell has no control over and a saturated PC market
with lower profit margins from industry price wars. Dell should focus on being a
“market taker”, instead of trying to be a market maker and capitalize on its ability
to enter new markets and quickly dominate, as it did in the low-end server and
workstation markets. It should pursue a multi-continental expansion of its middle
and high end server products. Dell should also pursue the external data storage
market through acquiring a leading company like the EMC Corporation. Having
already captured a large share of the US market, Dell should try and increase its
server, storage, and service segment penetration overseas to gain more
international market share, particularly in China and Latin America. Studies might
also be done on African and Russian markets as Dell has no physical presence in
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these regions. The only viable strategy in order to achieve Michael Dell’s goal to
double Dell Computers’ current revenue to $60 billion by 2007 is to work on
methods to improve sales in these 3 new areas. A combination of service, storage
and server product growth across newly established international markets will help
achieve this ambitious goal. While the US economy is in a recession, there is still
plenty of room to grow outside its borders.
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INTRODUCTION
Dell was founded in 1983 by Michael Dell, an 18 year old college freshman from
Texas who started out upgrading hard drives for IBM compatibles on nights and
weekends. Within a year, his service business had grown to an incredible $6
million from performing computer upgrades for local area businesses and he
dropped out of school to concentrate on the business. When Dell changed his
strategy and started offering custom built-to-order machines, the business
exploded, with $70 million in sales by the end of 1985. Evolving into an assembler
company, Dell was able to exploit certain events occurring in the industry and
swiftly adapted to meet market conditions. Five years later, total sales had grown
to an unbelievable $500 million and Dell became nationally known as a supplier of
state-of-the art desktop and portable computers. Dell continually achieved
phenomenal records in sales and profit growth, eventually making it the most
successful company ever in the PC industry, surpassing $25 billion in 2000. As one
of the world's premier providers of computer products and services, Dell was the
US market leader in its core products, the desktop and laptop markets by 2001.
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Dell’s Competitive Advantage:
Dell is officially the No. 1 computer systems company in the world. Dell is able to
sustain a competitive advantage over competitors in the computer industry because
of an extremely efficient supply chain/distribution system. Dell is able to achieve
superior profits in the industry because they are a knowledgeable user of
information, communication, e-commerce, e-business, internet, and web
technologies.
Michael Dell states that Dell is so successful because of “Knowledge
Management”. Mr. Dell defines that term by saying “physical assets are being
replaced by intellectual assets.” This relates to Dell’s inventory system. Dell
implements a Just-In-Time inventory system which operates on only 6 days of
inventory. Dell is able to achieve greater profit margins and increased profits
because of their inventory system. Inventory and labour are the highest liabilities
of a firm. Since Dell only operates with 6 days worth of inventory, they are able to
cut costs on warehousing, hiring people to track and maintain inventory, and avoid
holding on to obsolete technology. This allows Dell to free up cash flow to invest
in other value adding activities.
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Dell uses a JIT inventory system because Dell’s customers can only order
computers directly through Dell itself. Dell uses their website www.Dell.com to
take customer’s orders. Dell focuses on direct sales, cutting out other distribution
channels entirely. This allows for a deeper relationship with the customers
whereby Dell can offer their customer’s better service, savings, convenience, and
efficiency. A customer can order their own custom computer, have it built by Dell
in three days and have it delivered to the customer’s doorstep within one week.
Dell’s use of the internet has revolutionized the company. Dell makes their
website extremely consumer friendly to offer an easy order process to the
customers. Dell has also created their “Premier Page”. This page was made for
Dell’s larger accounts including corporations, the Government, and educational
institutions (i.e. Syracuse University). This webpage includes dynamic price
upgrades, easier navigability, and a greater range of available upgrades/options.
Customer relationship management software keeps close tabs on the types of
computers that customers are buying (Pizinger).
Not only does Dell use the internet to make the customer ordering process easier.
They also use the internet to build better relationships with their suppliers. In order
for Dell to work off of 6 days of inventory, their suppliers have to be very involved
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in the company to make sure superior service is met. Dell uses state of the art
production planning programs that forecast the quantities of components needed to
build the computers. After those forecasts are made, supply chain systems pass
those forecasts to suppliers, who respond with cost estimates and plan their
production as a result (Solis).
To achieve their supply chain superiority, Dell uses solutions from i2 Supply Chain
Management. “i2 streamlines the supply chain by providing component suppliers
and Dell planners with global views of product demand and material requirements.
It also provides real-time factory scheduling and inventory management, so
employees can generate key reports based on accurate and timely data, pinpoint
inventory on the factory floor, and receive supplier deliveries on a true just-in-time
basis (i2 supply chain management systems).”
This allows Dell to change their manufacturing schedule every two hours to keep
up with customer orders. Dell’s suppliers have access to this accurate, timely
information. Since the suppliers work with facts instead of forecasts, this allows
them to reduce waste and improve efficiency. Once suppliers receive this
information, they are directed to deliver needed materials to a specific dock door
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for assembly for specific product manufacturing. Dell uses the Windows NT
operating system and Intel-based servers for all of the i2 applications.
Dell’s e-commerce is a huge part of their competitive advantage. Their e-
commerce internet infrastructure is so advanced and knowledgeable that by using it
to determine trends and demands of their products, they have gained superiority
over their competitors.
Dell has set up strategic alliances with other companies to have their products sold
on Dell’s direct selling distribution channel. Back in 2000, Palm, Inc. made an
agreement with Dell to offer an expanded line of handheld Palm products and
accessories. This agreement allowed Dell to drive momentum for the Palm
operating system market (Dell: 2000, April 17). Along with Palm, Xerox also
partnered with Dell to take advantage of Dell’s e-commerce. Advantages to Xerox
were increased profits by offering the printers with the Dell computers.
Advantages to Dell include selling high quality printers along with their
computers, but more importantly, it allowed Dell to be involved in the customer
buying process for printers. Being involved in the decision making process is key
to Dell’s success because they see directly what the customers want and determine
their production schedule from that information.
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Dell achieves its competitive advantage over other firms in the industry by having
superior supply chain management. Dell utilizes technology to interpret
information. By being involved in the customer buying process they are able to
determine their customers’ needs. This allows Dell to streamline production and
have close relationships with their suppliers which results in getting timely
deliveries in order to mass customize customer’s computers.
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Analysis of Dell’s IT Tools:
Dell’s supply chain management success can be summed up in one idea. “Supply
chain management shortens the cycle between the component, the manufacturer
and the end customer. We are allowing them to almost touch each other, (E-
commerce)” according to Michael Chong, e-business Technology Manager of Dell
Computer Corporation. Supply chain management is the effective and efficient
movement of materials from suppliers, through a company and into products,
which eventually is received by consumers.
An important goal for Dell is to enable customers to process their own
transactions. Dell is known for their efficient and effective build-to-order business
model. This model allows customers around the globe to order customized
systems from the dell.com website. Dell’s online supply management allows Dell,
suppliers and customers to work together. As Michael Chong states, “Because we
work directly with customers, we have the ability to connect and understand what
products will be required and when (E-Commerce).” This helps Dell to inform
their suppliers what supplies are needed based solely on customer demand. As a
result, there is not an excess of supplies in warehouses that will decrease Dell’s
efficiency. As Dell is known for their exceptional service, ease in ordering and
responsiveness to customers needs, their competitive advantage is easily
distinguished.
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Dell’s internet presence through Dell.com is an important factor in Dell’s success.
By involving the customer from the beginning of the ordering process, Dell.com
makes it easier to do business for both parties and initiates customer relationships
while providing a means for ongoing customer service. With a number of links
focused primarily on certain groups and customers, purchases can be made easily
and efficiently. No matter what you are purchasing, Dell.com can assist the
customer in customizing and evaluating Dell’s offerings. Dell.com can help an
individual consumer purchase a single notebook or can help larger companies
purchase or lease products that will help them lower their costs. A new service,
launched in the year 2000, made it possible for customers to purchase refurbished
Dell PCs, notebook computers, digital cameras, scanners, printers and speakers
online. “The returned equipment comes from companies upgrading systems but
wishing to continue using Dell gear, or from cancelled order (Kelsey, 2000).”
Specifically, Dell has enhanced its supply chain by using i2 Supply Chain
Management to plan orders and communicate with suppliers every two hours. This
results in Dell’s efficiency in manufacturing and delivering exactly what its
customers want. Time to deployment and overall cost of ownership can be
achieved if i2 Pronto and/or i2 Solutions for Value Chain Management are utilized,
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along with Dell servers and storage. i2 Pronto is a rapidly deployed solution for
factory planning and collaboration. Dell possesses a competitive advantage in that
they are currently the only hardware platform certified for rapid deployment of i2
Pronto solutions. i2 Solutions enable Dell to reduce costs, lower total cost of
ownership and establish a reliable, stable operating environment. Dell’s own
implementation of i2 SCM solutions is known as the “DSi2 system”. DSi2 runs on
120 Dell servers and manages more than 250 suppliers delivering more than 3500
parts. As a result, Dell can deliver customized, replicable configurations, reducing
time to deploy and cost of ownership. i2 solutions also enable customers to put
Dell’s value chain to work in meeting company goals and attaining value (Jacobs,
2003). “i2 SCM streamlines the supply chain by providing component suppliers
and Dell planners with global views of product demand and material requirements.
It also provides real-time factory scheduling and inventory management so
employees can generate key reports based on accurate and timely data, pinpoint-
inventory on the factory floor and receive supplier deliveries on a true just-in-time
basis (Harrington, 2002).” This system allows Dell to achieve a new
manufacturing schedule every two hours which shows the latest customer orders,
backlog numbers, stock status and supplier commitments. Today, the supply chain
of Dell not only runs on 120 Intel-based Dell servers running Microsoft Windows
NT, but it also has four primary i2 software modules: i2 Collaboration Planner
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Demand Fulfilment, Global Supply Planning, Factory Planner and Supply Chain
Planner (Harrington, 2002). This success proves that Dell has the best of both
worlds. They achieve state-of-the-art performance at an economically attractive
price.
A competitive advantage is seen when a company, such as Dell, links supply chain
management with customer relationship management and supplier relationship
management. This link is known as DVCM (Dynamic Value Chain Management).
“DVCM requires synchronized, multi-enterprise collaboration based on
streamlined decision-making workflows across companies. It requires companies
to push planning and execution toward real-time or near-real time. DVCM's net
result is a fundamental change in the relationship between companies and their
trading partners--a change that creates tremendous value for companies, their
trading partners and their customers (Harrington, 2002).” When Dell utilizes its i2
SCM strategy, Dell “can model and monitor their business in real-time, and
analyze issues such as sourcing, distribution, resource and capacity constraints
(Harrington, 2002).” Some of the capabilities of DVCM are collaborative demand
planning with customers and suppliers, auto-replenishment of inventories, design
information sharing with strategic partners, content management and distribution
with management. After these are implemented, organizations are able to make
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decisions in a timely manner and implement those decisions for completion of the
products.
Another important role for Dell is the use of the Internet. The Internet helps Dell
to establish good relations with both their suppliers and their customers. Not only
does Dell’s use of the Internet allows customers to customize and purchase Dell
products online, the Internet also helps suppliers and Dell communicate and focus
on improving their efficiency. This method began in mid-1999 when Dell
introduced valuechain.dell.com. This website allows suppliers to follow their
material as it as used throughout Dell’s operations. Suppliers can log-on, drop off
invoices, check engineering change orders; review negotiated and forecasted cost
reports, and track their overall performances and progress. As a result of their
successful Internet system, Dell purchases almost 90 percent of its direct material
supplies online. Supplier hubs located near their manufacturing plants are used to
deliver supplies to the Dell plants when they are only a few hours old. As said by
Michael Chong, “We are trying to draw more value out of our supplier
relationship. That’s why the name ‘value chain.’ The applications themselves are
not replacing the business processes. The business processes are already defined
and well ingrained. It is just making the business processes more efficient (E-
Commerce).” By focusing on inventory control with their suppliers, Dell is able to
use industry price declines to their advantage and deliver those savings on to the
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customers. This also gives Dell a competitive advantage. According to Michael
Chong, “Our competition has a hard time trying to manage that type of model
because their inventory turns are fewer. They have more latent costs built into the
components in terms of their inventory (E-Commerce).” An efficient supplier
network is important to Dell. In order to increase efficiency between Dell and their
suppliers, Dell has reduced the number of suppliers they do business with. Three
years ago, Dell worked with more than 1,000 suppliers, but today they only work
with 100 suppliers. Dell also uses supply chain management software to reduce
inventories, improve material management and enhance relationships with
suppliers. This also helps Dell and their suppliers connect to share information
about inventory and improve efficiency, which gives Dell an additional
competitive advantage.
As a result of an alliance, Gen3 Partners and Arthur Andersen decided to work
with Dell in April, 2000. “Gen3 Partners will provide strategic business
development and technology consulting services to help Dell’s largest corporate
customers with headquarters in the United States leverage their existing assets to
create, architect and launch Internet-enabled enterprises (2000).” According to Jim
Sims, CEO of Gen3 Partners, “The next wave of Internet infrastructure will focus
on `brick-to-click' opportunities, as established companies integrate the Internet
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into their businesses. Gen3 Partners will provide a valuable service to Dell
customers by helping them use the Internet to improve their business-to-business
(B2B) capabilities and supply-chain processes." Dell has recently introduced
services to help customers conduct business over the Internet more efficiently,
including a Web hosting initiative called DellHost (www.dellhost.com) and the
upcoming introduction of a small and medium-sized B2B marketplace in
conjunction with Ariba (2000).” Ariba, Inc. provides solutions that allow
enterprises to manage efficiently the purchasing of all non-payroll goods and
services required to run their business. Ariba’s solutions, which include software
applications, services and network access, are designed to provide corporations
with technology and business process improvements to better manage their
corporate spending and, in turn, save money.
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Dell’s Business Model:
The four markets within an industry are defined as Business to Business, Business
to Consumer, Consumer to Business, and Consumer to Consumer. Dell focuses
on Business to Business and Business to Consumer commerce to satisfy their
business and individual customers. Dell differentiates between classes of
customers because the needs of their business customers, who buy large quantities
of computers, are different than the individuals who want to configure a single
unit. “Dell's business model is no secret, of course, and it's been emulated with
considerably less success by many of its competitors (Henricks, 2003).”
Dell’s initial success was due to its early use of the internet. “Dell's direct-to-the-
customer strategy presents a highly attractive cost advantage that's tough to ignore
(Banham, 2003).” Their direct interaction with their customers continues to be “a
key driver in sales for the quarter (2000).” Dell’s early work with using the
internet helped them get a jump on their competition while their competition was
finding it difficult to conduct successful Business to Business operations online
since “exchanges are still in their infancy and many haven't even gone live yet
(Memishi, 2001).” Matching customer ease of ordering and direct interaction
through the internet proved successful because Dell believes that it is the customer
that drives the business model.
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Dell recognized the challenge of dealing with the business and individual
customers as two distinct groups with different needs. Dell has done a phenomenal
job managing these two different types of consumers thus far. In the last couple of
years, Dell decided to split their operations into two different websites with
separate B2B sites. With separate sites, Dell planned to “simplify the Internet
procurement process for businesses and institutions of all sizes, generating savings
that can range to millions of dollars annually for large customers (1999).”
However, this idea failed, and “Dell had to shut down its B2B site, four months
after it launched. Dell said the site failed to attract more than three suppliers
(Schick, 2001).”
Dell controls its inventory and costs by being a demand-pull company, whereas
one of its top competitors, IBM, is strictly a supply-push company and operates in
a more traditional manner. IBM has to be good at forecasting what the customers
will need, while Dell makes the computers to order. Dell is more efficient and
therefore more profitable because it can buy its component parts based on the
customer’s demand and not have to worry about building up its supply of inventory
that may or may not be used. “The result was that the company wound up with
essentially no carrying costs for inventory while maintaining excellent turnaround
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on orders, because it sold what it had on hand, collected from customers in an
average of a few days, and didn't have to pay suppliers for several weeks
(Henricks, 2003).” Dell continues to use this successful formula to keep its
competitive edge over its customers.
Although Dell has been successfully operating according to its business plan, there
are some parts of IBM’s traditional business plan that has also proved successful.
In fact, “industry officials say that Dell could benefit from hiring IBM to support
Dell's customers with computer services (Auerbach, 1999).” Successful businesses
continue to monitor their industry and look for ways to improve to maintain or gain
a competitive advantage. This advantage is especially important in the economy
today, although Dell has “cited recent gains in customer requests for price quotes
and larger order sizes and expects a steady year of sales (McWilliams, 2004).”
“Dell is one of few firms left standing tall after the tech crash of the last two
years…[and its] growth comes as it has won over the consumer market, [but] Dell's
performance would be impressive in any year, but is even more so now
(Wasserman, 2002).” Dell’s success extends throughout the entire industry and
causes companies like “Compaq, IBM, Gateway, and Hewlett-Packard to grapple
with a lose-lose dilemma: concede market share to Dell or lower prices at the
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expense of already-flagging profitability (Pellet, 2001).” Other companies have
tried unsuccessfully to try these similar tactics.
With the spread of retail sales on the internet, “e-tailers” have fallen into two basic
groups; pure play or bricks and clicks. Pure play companies use only the internet
to sell its products and do not have a physical store. Bricks-and clicks companies
use their internet site in addition to maintaining one or more physical stores to sell
their products. Dell is a pure play internet company and does not have any
physical stores to sell its computers. “For Dell, however, the Web is more than a
sales vehicle (Thurm, 1998),” because customers can access the website for all
types of purchasing, service and support answers. Individuals and businesses can
check orders and obtain information, while businesses can make use of special
offerings and services through password-secured locations. Dell is also “offering
several flexible payment options to help make it easier to buy personal computers
online” (Pellet, 2001). Dell’s initial success as a pure play company was
evidenced by the fact that it “does more than $10 million daily in Internet sales
(1998).”
Another advantage to being an e-tailor is the reduced time it takes to adjust your
prices or modify your inventory. One of the most difficult tasks for retailers is
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managing your inventory based on your customer demand. Dell has minimized
this problem by matching finished products to orders received. Recently Michael
Dell was faced with a related question, “Do you consider yourself more of a
manufacturer or a retailer?” Dell’s innovative business plan left Dell to state,
“That's a great question. We often have that debate in-house. And frankly, there are
those who will always consider us a manufacturer, and those who will always think
of us as a retailer." While Dell claims “it is people who produce results (Cone,
2000),” it is also the strategies, organizational techniques, and the teaming up with
outside suppliers that produce mutually beneficial results. It was also extremely
helpful for Dell when “AOL announced an agreement to have its Internet access
and communications software distributed on Dell Computer Corp.'s personal
computers (Weiner, 1998),” because AOL is a leading pure play company. The
pure play also allows Dell to expand its product line more easily because of the
ability to adjust the site and add new products. This year, “the company is
bringing to the market printers that can be more easily configured to work with its
build-to-order PCs (Babcock, 2004).” As a pure play company, Dell will find it
much simpler and less costly to adjust their website for products and services in the
future. Dell Computer Corporation is the world's leading direct computer systems
company, and grows larger everyday. The success of its business plan has resulted
in "An increasing number of customers that have asked Dell to share its e-business
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expertise with them (Felice, 2000).” Felice continued to say that Dell's services
portfolio now spans from e-support to e-consulting, serving medium-sized
companies to some of the world's largest enterprises. Three years ago Dell
launched its “direct-sales model into India.” Founder Michael Dell stated, “This is
our 13th direct sales launch in Asia and we continue to grow at more than 30
percent globally (Lallpai, 2000).” Constantly growing here in the US and
continuing to grow all over the world it is no surprise that Dell reported revenues
of $41.4 billion in 2003.
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IT Infrastructure:
IT infrastructure and business-driven technology are extremely important to Dell.
IT infrastructure provides, through the use of technology, the underlying
foundation to support the organization's operations and future growth. This
principal is profoundly important within the computer industry.
One main goal of any successful company is maintaining employee productivity. A
major concern for companies relying heavily on a productive workforce that makes
extensive use of digital data, is the threat of a system failure. Since computer
based companies do a majority of their internal and external business through the
use of computers, a system failure would result in a loss of valuable human
resources and could decrease employee productivity. For instance, Michael
Lambert said recently of Dell’s new business workgroup server, “With the
PowerEdge 1300, Dell has introduced a highly reliable and manageable system
that redefines server value” (New Servers, 2004). The PowerEdge 1300 has the
ability to run dedicated server applications such as file and print, Internet/Intranet
and e-mail, therefore safely increasing employee productivity through the use of
secure workforce systems. Dell and IBM both protect themselves from this
potential problem with the use of specific intranets and backup/recovery systems.
Recently Altiris Recovery Solution has been selected by Dell for integrated
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delivery of backup and disaster recovery. Altiris along with Dell OpenManage
Client Administrator (OMCA) will provide “Direct integration of Altiris backup
and recovery technology with Dell OMCA [which] helps ensure business
continuity and helps provide additional cost savings for Dell customers through
proactive IT management” (Dell selects Altiris, 2004). These factors implemented
into a concrete disaster recovery plan provide Dell and IBM with the confidence to
scale and complex IT network.
Another way Dell and IBM protect themselves from a potential system crash is
through the use of the internet. Dell specifically does the majority of its business
through the use of the internet. This allows customers and suppliers to have a very
intimate relationship from anywhere in the world. This concept, known as global
reach, is one of the major competitive advantages that Dell has created. Through
the use of the internet, the customer has a much greater say in what decisions the
supplier makes. Dell announced a new Web-hosting initiative and alliance.
DellHost was designed for small and medium sized businesses to increase their
internet presence. Through DellHost, Dell has increased its customer base, “forty
percent of which are new to Dell” (Dell speeds web site hosting setup, 2004). By
allowing businesses to use their software they are also expanding their global reach
by having their customers increase their reliance on Dell products.
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Dell and IBM both have managed to maintain high employee productivity
consistently. One of the main ways in which they have managed to do this is to
provide near unlimited availability to their IT infrastructure. Dell and IBM both
keep consumer information lines open 24 hours a day, 7 days a week. They also
all have an easily accessible online help services. For example, the site's "Ask
Dudley" feature “allows users to pose natural-language questions. Created for Dell
by the firm that developed the popular "Ask Jeeves" Internet search engine, the
application now handles more than 150,000 questions a week” (Dell courts
customers online, 2004). Full time access is crucial to the support of the IT
infrastructure by allowing knowledge workers ease in admission to the source
regardless of varied schedule.
The majority of Dell's business is done through the internet. As was previously
stated, this allows the customer to customize his/her product directly for their
purposes. These factors give Dell a competitive advantage in its high scalability
and flexibility. Through a menu of many different system component options, the
customer defines how their company is going to grow, which makes scalability a
non-issue. “By the end of 1999 Dell was chalking up $40 million a day in online
sales-- accounting for 43% of the company's total revenue. Today Internet sales
alone would rank it among the 125 largest companies in the U.S” (Dell courts
customers online, 2004).
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In addition, the reliance on the internet for its business practices allows Dell the
luxury, to easily redefine its image by nearly dismissing the time necessary to
change the system (image, function, etc). This design saves untold amounts of
money because it is ready to adapt to nearly any market, business, or economic
change. Dell and IBM also implement a great deal of capacity planning when
determining what technology will be needed in future markets to stay competitive.
Manish Mehta, director of online support has said, “The paradigm shift we'd like to
see is fewer tech support phone calls, allowing our technicians to spend more time
solving the more complex problems” (Dell courts customers online, 2004). This
displays Dell’s intense dedication to capacity planning and adaptation, even in the
field of technical support.
Enhancing decision making is also a critical factor in the sustained life of a
computer company because technology is constantly changing. With today's fast-
paced computer market, innovation through customer feedback is key to the
success of its products. Dell and IBM both have a high degree of integration when
it comes to transferring data files from system to system effectively. It has been
Dell’s vertical integration model that, “has kept the company afloat despite the
industry downturn” (Schick, 2002). To stay competitive in today's computer
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market, the ease of integration would have to efficiently match the degree of
demand as to manage its resources properly. Also Dell's flatter organizational
structure heightens the ability for many sources to have input into the future of the
company as it deals with the evolving vision of what the market will call for.
Economic problems of late have spurred IBM to begin to adapt this organizational
structure and lessen time needed to change direction.
Dell and IBM both maintain very competitive business partnerships and alliances
through the use of electronic catalogs. Dell does nearly all of its business through
the use of electronic catalog and IBM continues to increasingly rely on the
business generated through them. The use of electronic catalogs gives a specific
competitive advantage because it presents products to customers or partners all
over the world. This is also a factor in Dell's and IBM's global reach enhancement.
Perhaps the biggest advantage of the electronic catalog is the search functionality.
The customer has a much more powerful search capability, making it easier for
them to find the proper product. Another major advantage of online shopping is the
speed in which customers can purchase their final product. A recent Dell customer
reiterates this concept, “Its information hierarchy is so clean that you can purchase
an entire unit in 10 minutes” (Dell.com, 2004).
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Increasing employee productivity, creating business partnerships and alliances,
enhancing decision-making, and enabling global reach are vital to the continued
success of Dell and IBM in today's fast-paced technology driven environment.
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Dell Products
Notebooks
ThinkPad Notebooks
Track record of success, cost-savings
Industry-leading capabilities that dramatically increase productivity and reduce