Dell Computers Essay

dingle Computer pioneered a new way of making and selling personal computers. Its nodes custom-design their computer ein truthwhere the Internet or phone. dingle reengineered its supply chain as it interconnected its efforts with its suppliers and streamlined its order-taking and production process. It can ship a computer indoors two days of taking an order. Personal computers lose 1 portion of their value every week they sit on a shelf. Thus, having intimately no armory is a great advantage to dell. Compaq tried to lease Dells approach, but with limited success.Dells chief executive officer Michael Dell understood that kind of execution. His direct-sales and build-to-order approach was not just a grocery storeing tactic to bypass retailers it was the core of his parentage st castgy. Execution is the savvy Dell passed Compaq in market value years ago, despite Compaqs vastly greater size and scope, and its the reason Dell passed Compaq in 2001 as the worlds biggest maker of PCs. As of November 2001, Dell was wound to double its market sh be, from approximately 20 to 40 percent.Dell turns its inventory oer eighty fourth dimensions a year, compared with about ten to twenty times for its rivals, and its working capital is negative. As a result, it generates an enormous follow of money. In the fourth quarter of fiscal 2002, with revenues of $8. 1 jillion and an run margin of 7. 4 percent, Dell had cash flow of $1 billion from operations. Its return on invested capital for fiscal 2001 was 355 percentan incredible rate for a company with its sales volume.Its high velocity also allows it to breach customers the latest technological improvements ahead of other makers, and to take advantage of go component costseither to improve margins or to cut prices. These are the reasons Dells strategy became deadly for its competitors once PC result slowed. Dell capitalized on their misery and cut prices in a call upon for market share, increasing the distan ce between it and the rest of the industry. Because of its high velocity, Dell could show high return on capital and positive cash flow, even with margins depressed.Its competition couldnt. The system works only because Dell executes meticulously at every stage. The electronic linkages among suppliers and manufacturing create a seamless wide enterprise. A manufacturing executive we know who worked at Dell for a time calls its system the best manufacturing operation Ive ever seen. In 1998, Dell Computers launched its first global cross advertising causal agent, beginning in the unify States and Canada, to further highlight the advantages of its direct business model. The brand advertising campaign carries the theme Be Direct. The campaign highlights Dells unique business model, which helps to eliminate barriers between customers and the manufacturer, providing Dell with the means to enhance the overall customer experience. Dells advertising has focused primarily on its products a nd has been targeted for the most part at computer-enthusiast and industry trade publications, cable and local television and a few national newspapers. The Be Direct campaign will be in addition to the companys ongoing product-oriented advertising. The new brand campaign emphasizes the strengths and advantages of Dells direct-to-customer business philosophy.The direct model, pioneered by Dell in the computer industry, enables Dell customers to have computer systems make to their specifications a single point of accountability award-winning service and support and turbulent access to the latest relevant technology. Presently, the growing number of orders comes in over the Internet. The order-taking system interfaces with Dells own supply chain guard system, which ensures that inventory is where it needs to be for the computer to be manufactured quickly. In addition, Dell stores very little inventory.Instead, Dells suppliers have built warehouses close to Dells facilities, and De ll orders split on a just-in-time basis. By implementing these strategies, Dell has been able to provide customers with exactly what they want very quickly. In addition, inventory costs are low, and Dell minimizes the danger of parts obsolescence in the rapidly changing computer industry. In this way, Dell has find a dominant player in the desktop PC market and is well on its way to doing so in the laptop and emcee markets.ReferencesCravens, D. W. & Piercy, N. (2003). Chapter 1 Strategic Planning and Decision Making. NJ McGraw-Hill Companies. http//www.dell.com