DELL COMPUTER UNDERSTANDS OPERATIONS STRATEGY
No one will argue that the market for personal computers (PCs) is highly competitive Consequently pea are typically viewed commodity in which there is little or no difference Arno the major competitors Nevertheless Dell Computer continues to gain market share while simultaneously generating significant profits and is now the leader in both categories Between
and 2001 Dell’s share of the PC market grew from 4.2% to 24.9% with Compaq a distant second with 13.3% market share and Hewlett-Packard in third place with 9.7%. How has Dell been able to accomplish this First its Dell Direct Model links the firm directly to its customers eliminating costly distributors and retailers. Originally a mail order firm Dell now also uses the Internet to take customer orders. In addition by applying information age technology it can build individually customized computers most of which are shipped within 3-5 days after the order has been received. (Because each computer is built to order Dell does not have any finished goods inventory And it does all this at a reasonable price. Dell Computer provides a good example of a firth that understands the concept of operations strategy and has designed and installed processes which allow it to do an excellent job of executing that strategy. In addition to competing on speed customization quality and price Dell also provides various services to its customers. (Services which are very profitable represent about $3 billion of Dell’s $7.5 total annual revenues.)
Alldy Serwer Dell Does Domination Fortune January 212002. pp. 71-75. Das Narayandas and V Kasturi Ranga Dell Computer Corporation Harvard Business School case No. 9-596- 058 revised September 1996. Jennifer Baljko Shah Dell Writes The Book On Efficiency-Processes Focus On Understanding Where Supply Demand Diverge ?In December 17 2001 p. 32.