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Dell is a major player in the computer hardware industry. It is currently number 38 in the Fortune 500 list. The company entered a market dominated by large corporations such as IBM and Hewlett Packard in 1984. It easily survived the competition and grew to become a leader in personal computer products and accessories as well as many other products. Dell was able to achieve its success by ensuring that customer experience is unmatchable through offering "superior value; high-quality, relevant technology; customized systems; superior service and support; and differentiated products and services that are easy to buy and use." (Dave Chaffey)
Dell has products for both personal and business applications. The company is set apart from competition by lower prices and the product customization. A vision of direct sales has been the driving force behind Dells operation. This culture of direct customer contact has made Dell one of the most successful companies in the world. The organization attempts to market the fiscally responsible customer by offering significantly lower prices than major competitors. Removing the middle man and providing the products directly from the company to the customer is one way to do this. In order to make this happen, it was necessary for the company to design a more efficient operation, including its production and sales strategies. (Vadim Kotelnikov).
Dell eliminates the need for inventory by purchasing material only after customers have placed an order. This helps to keep prices lower. Minimum shipping and supply costs are ensured through global partnerships. The necessary components are acquired from various vendors and assembled at Dell facilities located all over the world. A unique sales strategy that allows only for phone or internet sales ensured that its sales prices were at the lowest possible level with reduced overhead costs for retailers. "We are a really superb product integrator. We're a tremendously good sales-and-logistics company. We're not the developer of innovative technology" (Vadim Kotelnikov). The business strategy of dell is based on providing quality products to the customer at the lowest possible cost. That is what has made Dell a major player in today's market.
Dell's growth strategy is based on increasing its customer base through product improvement and diversification. Dell has attempted to capture a greater share of the market by introducing various new products for each of its market segments. With a future consumed by mobile technology, Dell has been the first computer hardware company to enter the fast growing mobile handset market. Dell's new Smartphone is a part of its growth strategy in the twenty-first century. Dell has also opened a few retail stores to lure in those customers that do not use the direct order model. When Dell started its direct order model, it was the only computer hardware company offering such a system. However, today all its major competitors have followed suite and began to use the proven system. This has led Dell to expand its sales strategy to include retail sales in order to maintain competitiveness.
Another important factor in the success of Dell has been its focus on customer satisfaction and improvement. Dell's culture of direct customer marketing requires ongoing feedback from customers in order to improve key products and operations for certain groups of customers. (Dave Chaffey). The organization has taken this a step further by its online chat on the Dell website, where users are free to discuss their issues on a public forum. The organization also has a very effective HR and Finance department. The work culture at dell supports its business strategy and values diversity and ethics. The finance department ensures that the organization uses its resources in an optimum manner and can get investments for its various projects.
Dell has become the primary provider of computers to global companies and public sector customers in the U.S., providing products and services to about 98% of the Fortune 500 companies. (Facts). The company focuses on solution rather than technology advancement, which means that there is no danger of the organization falling behind due to a new technology. The customer focused nature means that the company is always improving in order to meet the needs of the consumers. For example, a rising need for Smartphone's has provided Dell with access to the market. This business outlook ensures that the organization and its products will remain meaningful over the long term. (Facts).
Overall, the competitive advantage that Dell has achieved did not come from traditional competitive techniques. Instead of researching and competing with the other suppliers in the market, Dell simply focuses on its own customer needs. By providing product customization, customer feedback and customer service, Dell has become as one of the most customer-based companies in the world. There is no better way to build a business than to build it around the customer. By keeping operating costs low, selling directly to the customer, minimizing the inventory, and minimizing development expenses, Dell is able to better satisfy the customer. The goal is to provide low price computers and other products and leave the cost of development to the competition. Dell simply customizes current technology to improve customer satisfaction.