Strategic Management at Dell Computer Term Paper

[...] transaction customers, which represent 30% of U.S. sales, are small and medium size enterprises (about 20%) and home office customers and consumers" (Kraemer, Dedrick and Yamashiro, 2000)

Built-to-Order Production

The built-to-order production strategy was implemented to the great success of Dell Computer Corporation as it aided it differentiate itself from competing PC manufacturers. It ensured customers of the highest levels of interest in satisfying their needs and it as such gained their trust. But is also has some limitations in the meaning that it requires more time, implies more costs and forces the organization to "have available specific components as they are needed to fill an incoming order" (Kraemer, Dedrick and Yamashiro, 2000). Then, as it implies a high level of customization, it prevents the company from producing large masses of similar products, which could reduce costs and offer Dell a comparative advantage - process otherwise know as economies of scale. But the strategy has been continually revised and improved along the years, to now offer more advantages and sustainable comparative advantages than disadvantages.

The primary changes in Dell's business model which improved the quality of the operational process and eventually increased the company's national and international market share to eventually materialize in increased financial results could be summarized as follows:

Several product improvements, such as the reduction in the total number of screws to five, the reduction of the cable length for an easier processing and handling, reduction in download time by using optic fibers or the addition of "software to Microsoft Windows 98 to test all hardware installations in the factory, reducing customers' setup time from 45 minutes to 2 or 3 minutes" (Kraemer, Dedrick and Yamashiro, 2000)

The hiring of specialized marketing consultants to handle order processing and customers' specification for the built-to-order production system

The integration of Information Technology to support and improve the corporate operations

4. Conclusions

Dell Computers Corporation is now an international leader in the industry of computer manufacturers and it represents a business model for organizational success. From its shy beginnings as IBM's sales intermediary to its current global status, all of Dell's strategies have been centered on the complete satisfaction of its customers' needs and wants. "Dell's strategies of direct sales and built-to-order production have proven successful in minimizing inventory and bringing new products to market quickly, enabling it to increase market share and achieve high returns on investment in a highly competitive industry"(Kraemer, Dedrick and Yamashiro, 2000)

References

David, F., 1989, Strategic Management, Columbus: Merrill Publishing Company

Kraemer, K.L., Dedrick, J., Yamashiro, S., 2000, Refining and Extending the Business Model With Information Technology: Dell Computer Corporation, Center for Research on Information…