Ã¯Â¿Â½DELL Computer Corporation Inc. Group 8
CASE STUDY ORGANIZATION
Dell's company mission: To be the most successful computer company in the world at delivering the best customer experience in markets they serve.
Computer is a product where its value would obsolete in a very short period. Product life cycles in the personal computer (PC) industry have decreased from 22 months in 1988 to 4-6 months in 2004. The performance of key components has continued to double every 18 months or less. The computer tools are considered as obsolete when the latest computer technology has been discovered and launched.
The PC industry is driven by rapid technological improvements in components, particularly microprocessors, semiconductors and storage devices. Getting new, quality products to market on time is critical to maintaining competitiveness in an industry where customers are willing to pay a premium for the latest technologies. Time is a critical competitive factor in the industry in two ways:
Excess inventory loses value (estimated 10% per month)
Products incorporating the most advanced technology are in high demand and
carry a price premium.
There are two factors determining the ability of PC companies to manage inventory and introduce new products, which are:
Standardized, modular nature of the PC. PCs are built from standard components, using common architectural interfaces determined largely by Intel, Microsoft and earlier, IBM.
PC makers can outsource much of their production and purchase components from a well-established production network of contract manufacturers and components suppliers.
Dell's business model combines direct sales and build-to-order production. The business model is slightly different with other PC makers. While other PC makers rely on sellers, retailers, and other agents to help gaining more marketing and sales, Dell have to put much more effort to reach out to the customers. To reduce the cost of distributing...