Enterprise Computing Systems - Essay Example

It continued to command a strong market position and post profits in-an industry which was already struggling with declining sales and billions of dollars running in losses. Today, Dell directly sales around 90% of it’s PCs directly to the final customer. It has efficiently streamlined it’s supply chain in it’s favor by by-passing the re-seller channel which is a norm in the PC industry. The key to Dell’s success is it’s business model. This model gives Dell it’s competitive edge over the indirect PC sales.

Dell’s efficiency was one of the primary reasons behind it’s success. It’s efficiency allowed the company to operate and a excel in a negative trading cycle. For it’s inventory management Dell adopted a Just In Time Approach. This approach helped Dell create a “pull” for it’s personal computers. Just-In-Time system also helped them save costs on storage incase of excess inventory. They were able to let the sales float irrespective of rising demand. The customization policy proved to be very successful for Dell.

It turned out to be their value-added feature. They were better able to have an idea of what the customers wanted and were able to adapt themselves and their business processes accordingly. However in this rapidly changing world, the business environment keeps changing. Policies and models have to be hence revamped to adapt to the changing business model. During the course of 2006, Dell suffered a set back and significant decline in their sales in the PC market, and with that the continuous decline of PC sales prices too.

This was coupled with other factors such as rising customer dissatisfaction, changing trends, less techno-savvy consumers, rising preference for mobile computing and less need for customization. Market analysts realized that Dell’s problems focused more on cost competition without providing value added customer service, efficiency without innovation and a reluctance