Dell Case Study
Dell Case Study
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 was
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 was