Strategies UNIT-5P - Essay Example

In order to support the worldwide demand for its products, the company established seven production plants in different countries worldwide. Dell’s produces its diverse products on its manufacturing facilities located in: Austin, Texas; Winston-Salem, California; Lebanon, Tennessee; Eldorado do Sul, Brazil; Limerick, Ireland; Penang, Malaysia; and Xiamen China (Dell Annual Report 2005) As stated above, the production activities of Dell are conducted in seven locations worldwide. From this, it can be seen that the manufacturing operation of the company is highly decentralized.

The company does not utilize a single production plant to manufacture all its products. Instead, it opts to establish manufacturing facilities in order to reap specific business opportunities present in a region. The geographical locations of the manufacturing plants are very much strategic as they embody the primary business model and strategy of Dell which is cost leadership. For example, Brazil is chosen as a site for production because of “its sophisticated labor force, its economic incentives to attract technology manufacturing companies in the region, and its strategic location as an export hub to other South American countries” (Mahoney, 1999).

The decentralization of production enables Dell to customize its products according to customers’ specifications. This is also strongly in line with the company’s efforts of motivating employees through empowerment. These factors hinder Dell in confining its manufacturing activities in a single location. Dell strongly boasts its strategy of customizing its product and services according to the specification of the customers. The company recognizes that each customer should be provided only with the products and services which suit their specific needs.

Thus, the company has installed a direct business model in order to specifically address each customer’s wants. The company’s website states that “Culture plays a