Dell Case Study

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1 Introduction
Dell is the #1 personal computer provider in the USA and #2 worldwide. Dell has nearly two billion interactions with customers worldwide each year, and processes more than three million transactions daily. On average, over 140,000 Dell computer systems are shipped each day.2 1

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Dell offers real-time feedback online to suppliers about critical aspects of inventory management such as inventory volumes, product quality and customer satisfaction. Dell uses Radio Frequency Identification (RFID) tagging. This technology-based method of identifying unique items using radio waves streamlines the inventory and shipment tracking process, reducing costs. By speeding up movement through its supply chain, Dell achieves cost reductions which are passed on to the consumer. Dell is an industry leader in reducing inventory on hand, reducing the costs of holding out of date technology. The Dell model uses standard industry technology such as Intel microprocessors or Windows or Linux operating systems. This means end users are not locked into particular operating systems. Dell’s lower mark-up, operating efficiencies and effective inventory management provides customers with highquality, relevant technology in customised systems. The direct selling model allows customers to access necessary service and support, and products and services that are easy to buy and use.

The company was founded in 1984 by Michael Dell, with a new business model consisting of selling computer systems directly to customers. Dell says “The best way to describe us now is as a broad computer systems and services company”. It sells desk top computers, servers and networking products, printing and imaging, notebook computers and a range of software, consumer services and business solutions. Personalisation lies at the heart of the Dell ethos – enabling customers to express themselves through their computing. The Dell Consumer tagline “Yours Is Here” expresses the concept that while Dell builds the computer, it is inspired by the individual customer. Dell divides the business into four globally based customer segments: • Consumer • LargeEnterprise • PublicSector • SmallandMediumBusiness. Eachsegmentconcentratesondevelopingexpertknowledgeofproductsand solutions that can be applied world wide. Dell’s Consumer business functions as a worldwide business. The Global Consumer Sales segment is divided into two organisations: 1 Worldwide Channel Sales organisation, including the retail channel 2 Global Consumer Direct business, including Dell’s worldwide websites and phone sales. The existence of a separate Global Consumer segment has enabled a dedicated team to focus solely on the specific needs and desires of the consumer. Products have been directed to consumer wants, rather than starting with an existing commercial product and trying to turn it into one suitable to the consumer. Dell’s Unique Selling Point (USP) is the ability for consumers to select and customise their computer. Customers can purchase custom-built products and services. A pre-built machine may contain features the customers will not use, or not include features important for a specific customer need. Customers, whether online, via phone or in a retail outlet, can select the features they require. Customising your PC. Select your: • Processor • Hard Drive(s) • Media Readers The Dell direct selling model has three core elements: • One-to-one relationships with customers • Products that are built to the customer’s specifications • Lower prices enabled by lower mark-ups and supply-chain efficiencies. • Optical Drive • Speakers • Operating System • Monitor • Service (Dell Care) • Video Card • Keyboard/Mouse • Memory • Graphic Card • Software • Sound Card • Modem • Wireless Component Suppliers Dell End Consumer Dell combines its direct customer model with a highly efficient manufacturing structure. Dell’s supply chain...
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