Financial Statement analysis of Dell, Inc, in 2005 - Essay Example

Looking further, the strategy of Dell is multi-faceted which does not only include the internal company's internal operations but its external stakeholders as well. It should be noted that Dell's strategy can be summed up as follows: This strategy of Dell is perfect for the hypercompetitive industry it is currently operating in. A hypercompetitive industry, according to Kotler, is one where there is an intense rivalry among the competitors coupled with high buyer leverage, forcing the firms to commit to an efficient value chain which eliminates incompetence in the system which will bring eventually bring down the cost of operation and enhance customer value.

In the face of this high competition and buyer power, Dell was able to come up with a strategy featuring a value chain which eliminates wastage and adds customer value. In the IT market, it is important that a player establishes an efficient manufacturing system which reduces or even eliminates wastage in its value chain. Dell has become a pivotal driver of the supply chain revolution in the IT industry because of its adoption of the Toyota Manufacturing System also known as Just-in Time (JIT) inventory system.

This, together with its commitment in solely marketing its product directly to customers and the utilization of relationship marketing is very much appropriate for the industry Dell is operating in. As a market leader in its field, Dell is regarded in having the leanest and most efficient manufacturing system, excellent customer service, intensive research, lowest prices, and quality products. It should also be noted that Dell was able to develop its competitive advantage due to its unique strategy.

Even though Dell's competitors like Hewlett-Packard, IBM, and Gateway continue to push aggressive strategies to eat up into Dell's market share or at least, capture a more patronage, the firm was already able to create a competitive image, insulating it from attacks. It can be noted that as the sales revenue of other competitors decline or remain flat, Dell manages to record increments. In fact the current strategy utilized by the firm manufacturer has become a sustainable competitive advantage.

In contrast to competitive advantage, the business model of Dell is hard and is even impossible to be replicated by its various competitors. It should be noted that some organizations planned to emulate the business model of Dell but failed. Michael Dell, the firm's CEO expressed that competitors will be bound with their present strategies because adopting the business model of Dell will be detrimental especially in their distribution channels. Currently, Dell enjoys its strategic position as a market leader in the IT industry.

Due to this, the company is quiet insulated with current strategic issues. The only thing that Dell must address nowadays is the significant decision whether it directly employs its core strategies in its geographic expansion. As the company opted to conquer more lucrative markets outside its home country, Dell is faced with the