Dell's Strategy

Topics: Costs, Inventory, Balance sheet Pages: 3 (960 words) Published: May 24, 2010
What is Dell’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? Dell’s strategy is to provide products and services to the consumers and eliminate the middleman. “Dell’s business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies” (SEC, 2005). The company relies on a combination of customer intimacy, operational excellence, and product leadership customer value proposition, but the main focus is customer intimacy driven. According to SEC, “A direct customer relationship, also referred to as Dell’s “direct business model,” eliminates wholesale and retail dealers that add unnecessary time and cost or diminish Dell’s understanding of customer expectations. As a result, Dell is able to offer customers superior value by avoiding expenditures associated with the retail channel such as higher inventory carrying costs, obsolescence associated with technology products, and retail mark-ups” and “Dell believes the direct business model is the most effective model for providing solutions that address customer needs (2005)”. What business risks does Dell face that may threaten its ability to satisfy stockholder expectations?  What are some examples of control activities that the company could use to reduce these risks? One business risk that Dell faces is “A failure on the part of Dell to effectively manage a product transition will directly affect the demand for Dell’s products and the profitability of Dell’s operation (2005)” this means that Dell has to keep up with technological advances and changes. With Dell being a technological provider to consumers, they must have the latest and greatest to keep up with competitors. Dell should research and evaluate new technologies as they...
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