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Paraphrasing of Discussion and Analysis of Dell Strategy - Essay Example

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Dell is a leader in its market sector because of its advanced products that owe their superiority to a few factors. One of these factors is innovation which uplifts the quality of their products…
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Paraphrasing of Discussion and Analysis of Dell Strategy
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"Paraphrasing of Discussion and Analysis of Dell Strategy"

Download file to see previous pages However, recent times have seen the increase in competition against Dell and its winning strategies. As such, Dell seeks new strategies so as to gain and maintain competitive advantage. One such strategy Dell zeroed in on is “dynamic capabilities” (Magretta 1998, p.4). The trick is to go beyond utilizing resources in an ordinary way. Instead, the company employs strategies that configure and thereby create competitive advantage of these resources. “Dynamic”, on the other hand, stands for the ability to transform these resources with ease in light of the flux environment within which Dell competes. The ability to adapt to external and internal change is also a significant way of maintaining competitive advantage. In light of this analysis, Michael Dell states that: “The goal is to stay a few steps ahead of change. That means the company can create and even shape change to some extent. The best way to beat change is to spend adequate time with the customers (Magretta 1998, p.83)”. This approach reflects not only on the nature of the strategies Dell upholds but also on the nature of their operating models. That is, adjusting and improving the models capabilities over time in light of changing market needs. Critical Overview: Focusing on Relationships within a Supply Chain. Dell attributes its key successes on a unique value chain. This chain owes its uniqueness to the nature of relationships of the various stakeholders within the supply chain. These relationships create leverage for the company in view of its customers’ appreciation. Secondly, Dell is one of the company’s that heavily relies on web technology to differentiating itself from other players in the market. One advantage of utilising web technology is the ability to select direct market routes, as opposed to other companies. Direct market routes are cost efficient as they facilitate quick delivery of goods and services. Also, the company can adapt and respond to the market environment needs with flexibility. Source: Magretta, 1998. In regard to the stakeholders in the supply chain, Dell focuses on the customer’s interests more than any other stakeholder. Granted, distributors and retailers contribute significantly to the value chain. However, in maintaining the differentiation strategy Dell prefers to target the customer directly. This approach provides convenience for the customer through superior customer service and the company by building a customer oriented brand name. Secondly, a direct approach to customers’ business model vouchsafes lower operating costs. This enables customers to enjoy Dell products at relatively affordable prices. Lower operating costs are an advantage for the company as they can invest other capital to improve the value of their products through research and development and also, enables them to invest in other ventures. The ever changing external factors over the years have led to the need to expand some previous strategies. Therefore, Dell outsources some logistic and distribution elements of its strategy. While exploiting the internet to create effective distribution channels, Dell does not ignore traditional channels such as direct mail. Through outsourcing primary activities, Dell creates a virtual value chain because suppliers and distributers alike qualify to be partners hence “integrated in their value adding activities” (Magretta 1998, p.7). This strategy further differentiates Dell from competitors offering the same services. The partnerships created also allow for competitive advantage for Dell. These partnerships facilitate innovation through injection of “ ...Download file to see next pagesRead More
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