Logistic and Supply Chain Management of Dell-Samples for Students

Question: Identify logistics Management Strategies that enabled the Company to become successful or otherwise, as it could be an example of a failed Company. Answer: Introduction The modern day supply chain management is a complex chain of different companies that are dependent on each other. The researcher has provided the example of Dell in this report which is one of the largest technology companies of the globe. The technology industry is too much dependent on supply chain as the suppliers of different products or raw materials have to be shared with the customers. The company is committed to responsible practices in business and maintains high standards of ethical practices. The main aim of this research is to derive the reasons for the success of the company in the modern marketing world and how the company has been able to hold its competitive advantage for such a long time. Background Supply Chain Management and Logistics have become the key issue of the mentioned technology organization. The story of Dell started in the year 1984 in the state of Texas of USA. Mr. Michael Dell was the founder of the company who was a medical student in the University of Texas. The strategy of the company in the beginning years was a bit different from the other similar companies of the time. It stuck to the process of direct sales as which they believed to be the best way to personally reach the customers. After some years they adapted the use of retail sales only to return back to the old process of direct sales. The company reaped the benefits of its innovative strategies of not depending upon any third party suppliers to deliver their product as they became the supreme company of USA beating their rivals like Apple, Hp and IBM. The company is reputed worldwide because of its unique and totally different logistics system (Waters and Rinsler 2014). On the global front Dell relies on a wide range of innovative marketing personnel and some reliable suppliers who are well reputed for delivering the finished product to the service users. Fundamental Reasons for Success Dell has been there in the market from 1984 and the company has enjoyed huge success since then (www.dell.com). As mentioned earlier the use of latest and innovative technological methods and proper strategies has been the main force behind its success (Waters and Rinsler 2014). The case study has provided a brief insight into the logistical and supply chain management of the mentioned organization. As mentioned earlier Dell has followed a system of sales direct to customers. This particular system has been instrumental in carving out the success of the company. In the beginning the company began with upgrading the old IBM machines and reaching the products direct to the customers without involving any middlemen in the process. The following strategy helped the mentioned organization to directly interact with the customers and answer their all queries and difficulties. A large section of the media as well as other companies viewed Dells strategy to be a negative one and termed it as a company which sold pc like bananas. The Company however remained focus on improving the customer relationship management and getting more close to the key customers (Christopher 2016). The success of the company can also be credited to the performance objectives as it s main aim is to provide the buyers with quality pc at a lower cost. Such a lucrative deal was easily accepted by the people and was thus in a very small time Dell became one of the best companies in the market. The researcher has compared the success story of the company with another similar company which has been unsuccessful to survive in the market. Palm Inc was a successful technological company that cropped up in the last decade. It specialized in manufacturing PDAs and different other electronic devices that could easily be integrated into computer platforms. The company was moving in the right path and it appointed a network of computer developers to stay updated with the latest technological advancements of the modern day. But things started changing after some time due to a variety of different factors (Wisner et al. 2014). The first and foremost being its association with another company named Sprint Nextel which was itself a shrinking firm. The company also failed to develop any unique product of its own that could give stiff competition to other existing products like apple I-phone or android. On the other hand the company failed to market the products in a suitable manner as th e advertisements campaigns, promotional campaigns failed miserably. However the most important reason behind its failure laid in its overdependence on third party selling as it failed to reach out the customers and understand their needs and difficulties (Ross 2015). Maintenance of Competitive Advantage Dell has created an organizational structure that is focused on inventions and is based on a flat structure around key processes and supported by a network of independent organizations. Some of the features by which it maintains its advantage in the market are; Market Orientation- As mentioned earlier Dell believes that success comes only on reaching the customers personally without involving any third party in the deal. Therefore the basic task done by the organization is to create superior value for their products to the customers (Hult et al. 2013). The company earned itself a reputation by producing high quality pc and offering them to the customers at the most competitive prices. This particular policy landed the company with huge success as other organizations failed to formulate such strategies as they were dependent on the wholesalers and the retailers to market their products (Gleghorn and Harper 2015). According to business will see the light of success once they formulate the right strategies emphasizes on their customers and competitors and finally develop one of the best learning cultures within the organization. The management of Dell has been successful in creating the best type of strategy for the organization because of the great involvement of each and every employee of the organization. The employees of the company have effectively collected shared and interpreted information and decision making process of the organization (Govindan et al. 2015). Market Positioning and preferences of customer- Segmentation, Targeting and positioning of the customers is done to ensure what type of customers are present in the market, secondly what are the needs of the customers and lastly are there any additional preferences. This helps the organization to prepare their products based on the enhanced customer demands (Fredendall and Hill 2016). Generally at the beginning the business units does not select any particular customers for their products but treat all of them as the same and applies the same strategy over all their products. Secondly there are strategies where the business entity tries to be selective towards the marketing and focus on potential groups to enhance their customer base over that group (Stadtler 2015). Dell has followed exactly the same structure and has achieved huge success. The products of Dell are affordable and are of high quality suiting the range of the selected group of individuals. This helps the organization t o hold a competitive advantage over their rivals over a given period of time. Dell usually uses the customer segmentation in its marketing strategy and also the product segmentation where it targets several segments of the market and offers their customers a wide variety of products. As mentioned earlier the main strategy of the organization is to ensure that they serve the customers the best products according to their demands. This helps them to increase the market share and have a superior competitive advantage over their rivals in the industry. The mentioned technology organization has divided the customers into two types namely; Transactional Customer- This kind of customers is too much sensitive to the price of the products. They are always in search for high quality products at the lowest possible price, reliable products; value added services and an uninterrupted service from the organization (Stadtler 2015). The following range of customers have been on a rise since the last 5 years because of the advancement of the computer technology especially the internet where one can buy online products easily. The mentioned organization has a set team of experts who look after the online purchases and regularly keeps a detailed update on the buying patterns and behaviors of the people and accordingly approaches them. Thus it can be said that the organization has carefully divided the market according to the preferences of the customers. Dell has the knowledge and ability to make sure that their products meets all the different needs of the customers. The company has earned itself a reputation in the technology and innovation market as one of the premium business unit that sells high quality computer products at a competitive price. Relationship Customer- Relationship customers are the large customers who provide the organization with the largest portion of profit as they are the bulk purchasers of the different products of the company. These corporations or government offices are represented by sales representatives or managers in charge of the accounts (Fawcett et al. 2013). Delivering a quality set of products and services to these service users for a long time creates a strong bond between the organization and the company. The company on the other hand also provides the organizations with a number of different benefits like charging a less amount for the products, offering special discounts for them and also allowing them to provide recommendations on the quality of the product during the production process. Dell has also developed customer specific web sites like premier-pages with already determined prices of different products. Suitability for other companies The other companies that can attain success by following Dells business structure are the manufacturing companies (Mangan and Lalwani 2016). They can follow the following structure to manufacture and distribute their products on their own which will help them to increase their productivity and increase their percentage of profit. It will be easier for them to do business if they get rid of the middle men as they will not have to share their profit it with those people and thus will be able to earn the maximum profits (Ross 2016). In the beginning some other companies were reluctant about following the same strategy like Dell but they slowly started changing their strategies after the huge success of Dell in the market. Companies such as HP and Apple made some serious investigation into the strategic structure of the mentioned technological company as mentioned in the research and made some necessary changes to their already existing structure. HP which provides personal computers, imaging and printing products and many other different computer accessories provides IT infrastructure to both individual and different enterprises. HP has incorporated some of the strategies of Dell and now it has created an excellent account management system for maintaining its global network. The organization has reviewed its prices and rather than offering quality products in a much higher price they are now offering the similar products with advanced features at a much lower price that is believed to be competitive in the mark et. Apple on the other hand is a well known organization that has established its name as one of the best Pc manufacturers around the globe. Its own system software is totally different from that of the windows and Intel and thus has carved out its own name in a different way. In the earlier days the company used to distribute its products to the customers by appointing a third party intermediate (Waters and Rinsler 2014). Apple has also changed its strategy to compete with the other players in the market. They are slowly changing their approach to appoint third parties and are now involved in direct selling to the customers from its large number of different flagship stores. Therefore the strategy of Dell has been a hit in the market as more and more number of organizations are likely to follow the strategy of the organization in the near future. Configure to-order and postponed production work Dell uses the postponement strategy to carry on its business. It has a lot of different advantages (Christopher 2016). The changing demands of the customers now and then and the availability of different substitute products in the market have forced the organization to risk the non selling inventories and keep the best selling products on a different side. The existence of a number of challenges before the delivery of the final product makes the organization vulnerable to profit. Therefore it is necessary for a business entity to provide the right product to the right people with the right price. Dell ensures that the products of their company meet all the necessary specifications of the customers and then they segments out their target market and ultimately sells them to the potential customers. Some benefits include; Minimize wrong inventory and the products are obsolete and marked down. The use of own technologies spurts up in the absence of imports. The customers can be presented with a number of different options to make sure that they are able to get the products at a reasonable cost. Conclusion After a thorough analysis of the whole report it can be suggested that Dell has been successful to survive in the market in times of crisis just because it has adapted to innovative measures to make itself sustainable. The organization has been successful to maintain its integrity and brand equity and has earned itself a name for the provider of quality pc solutions. The company must use the same strategy of innovation and growth until it gets success. In recent times the company has been facing stiff competition from the likes of HP, Apple and many other companies. The direct sales approach by the company cuts the cost of the middle men and thus helps them to reap all the profits without sharing it with the others. Dell can also invest in after sales support as because the after sales support offers a huge profit as compared to the sales of the computers. Last but not the least the mentioned company must focus on the environment and take environment friendly measures and ct down upo n the carbon emission rates of ther organization. References "Dell India Official Site | Dell India."Www1.ap.dell.com. N.p., 2017. Web. 19 Aug. 2017. Christopher, M., 2016.Logistics supply chain management. Pearson UK. 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