The case study gives an outlook at Dell’s management and operation procedures which are used to operate and structure the company efficiently.
The key points are:
• Dell’s business plan was to sell good quality hardware at a low cost directly to the customer, allowing them to have a tailored Desktop that met their personal requirements; this was done by allowing customers to choose options from a list of components and specification which were then assembled to order. This strategic business plan eliminates the retailers and distributors, allowing dell direct contact with their prospective customers.
• This assemble to order model allows Dell to recognise and respond to customer preferences and industry trends very quickly and without a significant amount of their capital being tied up in inventory (which the value of the inventory in storage would decline as updated products emerged).
• Dell‘s business model was about cutting out the ‘middle man’, but in doing so created a vulnerable link in their customer service and technical support aspect of the company. Customers are accustomed to discussing purchases, returning faulty equipment or seeking support at the store; such opportunities were absent from Dell’s model which led to a loss of share prices, orders and major public criticism. This forced Dell to update their business model as they re- housed their call and support centres instead of outsourcing it to other countries.
• With Hewlett-Packard’s and Sony’s growing market share and superior customer and technical support teams, Dell was forced to raise its game in the product it delivered and in their after-sales department. This revolution within the Dell organisation gave birth to the new code of business and conduct: ‘The Soul of Dell’. This, in the words of Founder Michael Dell, is explained as ‘... conducting business the Dell Way- the right way, which is ‘Winning with Integrity.’ This new philosophy...