Dell’s executives believe that five tenets were the key to delivering superior customer value:
• A direct relationship is the most efficient path to the customer;
• Allowing customers to purchase custom built products and custom-tailored services is the most effective way to meet customer needs;
• Non proprietary, standardized technologies deliver the best value to customers
• Searching a low-cost structure where cost savings can be passed along to customers in the form of lower prices;
• Dell should endeavor to deliver added value to customers by: researching all the technological options, trying to determine which ones are "optimal", and being accountable to customers' for helping them obtain the highest return on their investment in information technology (IT) products and services.
In accordance with these tenets, Dell's strategy had seven core elements: a cost-efficient approach to build-to-order manufacturing, partnerships with suppliers aimed at squeezing cost savings out of the supply chain, direct sales to customers, award-winning customer service and technical support, customer-driven R&D, emphasis on using standardized technologies, and product-line expansion aimed at capturing a bigger share of the dollars, its customers spent for IT products and services.
1. Cost-Efficient Build-To-Order Manufacturing
Dell built its computers, workstations, and servers to order; none were produced for inventory. Dell customers could order custom-equipped servers and workstations according to the needs of their applications.
Dell was regarded as a world-class manufacturing innovator and a pioneer in how to mass-produce a customized product. Dell's build-to-order strategy meant that the company had no in-house stock of finished goods inventories and that, unlike competitors using the traditional value chain model; it did not have to wait for resellers to clear out... [continues]
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