Dell case on Global Business Essay

Submitted By Karen-Ochoa
Words: 799
Pages: 4
Open Document
- Michael Dell started company in 1984 Undergrad Student
- 2004 one of the worlds great computer companies leading share in personal computer and server business.
- 2004 Dell’s revenues grew from 6 to 41billion and over 2% on global market share when computer makers lost money due to slumping global demand for Pcs.
- 1/3 sales US

How?
- Cost structure is lowest in the industry= dells global manufacturing and supply chain management strategy
- Brazil, Ireland, Malaysia, china, US. Low labor cost, high productivity of local workforce, proximity to important regional markets to reduce shipping costs and time.
- Dell costumer support operations: Bangalore, India, low wage rates, and availability of educated English speaking. Difference in culture US/India -> complains, move some operations to US.
- Supply Base: 200 Global suppliers. 50% China.

Business Model: direct selling, no wholesalers or retailers.
- 2004 85% of sales made online: ability to customize and get the system that best suits costumers.
- Low price and customizing: winning in costumers

Power of business model:
Managing global supply chain to minimize inventory, while giving through Internet real-time information about order flow to suppliers.

- Suppliers get online demand trends for the components to produce, and get the volume expectation for next 4-12 weeks, updated every day.
- Produce the right quantity of components, with perfect time of delivery for production.

EX:
To use a digital chip from Texas Instruments they adjust to Quantas Taiwan schedule needs, they fix the notebooks computers, and these adjust to the schedule according to data from Dell

Goal: replace inventory by information, drive inventories out of supply chain apart from the ones in transit between suppliers and dell.
- 2004: 3 days of inventory compared to 30-40-90 days that competition had
-Advantage: components cost 75% of revenue and fall 1% per week because of technology innovation: component cost advantage and on the bottom line.
- Synchronize and balance demand and supply like few competitors can. Minimize excess and obsolete inventory (0.05% in Dell, 3% in competitors)
- Ex: if they are running out of 17-inch Sony monitors, they’ll offer a lower price on 19 inch until they get more inventory.

DISCUSSION

1) What are the advantages to Dell of having manufacturing sites located where they are? And what are the potential disadvantages?

- Advantages low cost (Brazil, China, Malaysia and, relatively, Ireland), they have educated work forces that are highly productive, and they are near large regional markets.
- Potential disadvantages quality control, sensitivity to international shocks.

2) Why does dell purchase most of the components that go into PC from independent suppliers, as opposed to making more itself?

- Outsourcing allows Dell to focus on what it does best. It enables Dell’s business model to be successful.
- Dell’s comparative advantage is in pricing, customization and rapid order fulfillment, gained through supply chain management and logistics.
- By outsourcing, Dell does not carry risks connected to inventory and can be highly flexible in the manufacturing process.
- Dell has lower coordination costs than if it were producing its own parts.

3) What are the consequences for Dell’s cost structure and profitability of replacing inventories with information?

- Dell’s Cost structure is the lowest in
Show More

Related Documents: Dell case on Global Business Essay

Dell Analysis Case Study Essay

Case Analysis: Dell Introduction Present CEO and chairman of the board Michael Dell founded Dell in 1984, as a leading technology provider that designs, develops, manufactures, and supports PCs, software and peripherals, storage and servers, and associated services. With operations in four geographic areas and additional business centers and manufacturing sites in more than 20 locations around the world, Dell is able to reach more than 24,000 retail locations worldwide. Dell’s ability to process…

Words 5226 - Pages 21

Report on International Ethical Issues Essay

1). Executive Summary…………………………………………………………………3 1.1 Background and learning goals of the report …………………………………3 2). Introduction to Dell Inc………………………………………………………………4 2.1 Background of Dell Inc. ………………………………………………………4 2.2 International activities of Dell Inc. ……………………………………………5 3). International ethical issues facing Dell Inc. ………………………………………6 3.1 Employment Practices…………………………………………………………6 3.2 Environmental Pollution………………………………………………………7 4).…

Words 2740 - Pages 11

Essay on Globalization and Organizational Structure

Q1. Organizational structure refers to the formalized arrangement of organizational components such as the headquarters, subsidiaries, business units/division with the headquarters and subsidiaries, product lines, jobs positions, tasks and reporting relationships in a organization. This is very much interconnected with how a business, depending on how your business is structure, it affects how your formalized arrangement operate. If your firm was just exporting, mostly all the organizational components…

Words 2996 - Pages 12

Senior Project Manager Essay

| U02A1 Dell Supply Chain | James DeHaven | BUS3022 Fundamentals of Supply ChainCapella University | Why has Dell’s Direct Supply Chain been so Successful? The direct supply chain model that Dell has been using for many years to sell customized PC’s to customers via the internet has been very successful. Dell designed and structured the supply chain to provide customized computers in a quick manner and with a reasonable price. Customers can visit the Dell website and configure the PC…

Words 1079 - Pages 5

Essay on Michael Porter

Michael Porter 5 Forces Porter's five forces of competitive position analysis is a simple framework for assessing and evaluating the competitive strength and position of a business organization that formed by Michael E. Porter of Harvard Business School in 1979. Basically, the concept of this theory is actually based on the five forces model that uses to determine the intensity of competition and market attractiveness. Therefore, strategic analysts are often to use Porter’s…

Words 1195 - Pages 5

dell-new horizon Essay

Case Analysis : Dell – new horizons Problem statement The impact on Dell's business is great and it becomes ever more important for Dell to restore its competitive advantage. Dell has to catch up with the rapid changes in technology and it was not able to gain a sustained competitive advantage due to its reliance on the traditional business strategies which take away innovation from them. It should also evolve its global strategy such as responding to local needs and adopting other transnational…

Words 726 - Pages 3

Essay about Case Analysis of Dell Computers

microcomputers, minicomputers, and personalcomputers. Dell also sells computer peripherals, which SIC 3577 encompasses. The description for SIC #3577 is establishments primarily engaged in manufacturing computer peripheral equipment such as including printers, plotters, and graphic displays. During the time of the Dell Case, which is from 1995 to 1999, are some major trends occurring in the PC industry. By the mid-1990s, a relatively mature global industry structure was in place, with the U.S. specializing…

Words 12003 - Pages 49

What Factors Contribute To The Rapid Pace Of Change In Business

Assignment one 1. What factors contribute to the rapid pace of change in business? Is the pace likely to accelerate or decrease over the next decade? Why? Human resources, capital, natural resources, entrepreneurship, and technology all play a factor in to a rapid change of pace. They are likely to increase because all of these factors are growing rapidly. 2. What role does entrepreneurship play in the economy? Who stands to gain from the success of individual entrepreneurs? How do other parties…

Words 941 - Pages 4

Accounting (Technologies) 224 Group Research Project Essay

commerce, & discuss the business significant of each of the features you identify? Marking guide to be placed here Leave this blank Abstract With technology development E-commerce has become more widely used in trading, particular for international business. E-commerce is businesses trading with other businesses via interne. The most commonly used three types are B2B, B2C and C2C. E-commerce's unique features we are identifying are Ubiquity, Global Reach, Information Richness…

Words 3151 - Pages 13

Strategic Corporate Communication in Vodacom Essay

ABSTRACT Strategic Corporate Communication is communication that happens in a corporation e.g. business, company, shop or group of companies. It is about laying a plan to reach the intended objectives of the company. Let say if the company needs to make profits it should have its strategic plan to reach that goal. On the other hand, those strategic plans must involve internal and external public. Mainly Strategic Corporate Communication is supported by a detailed research plan. Corporate…

Words 2648 - Pages 11