Submitted To:

Samira Rahman (SMI) Course Instructor INB 480 (Global Business Strategy) SEC:2

Submitted By:
Farhan Israq Ahmed Khaliqur Rahman Tasneem Haider Khan Farhana Islam Farah Sadaf Al Sabah Khan Muhammad Ali Ashraf 1110440030 0910982030 1110501030 1110263530 1010859030 071299030

School of Business, BBA Program

North South University Dhaka 12th June 2013

Back ground of Dell: Dell was founded in 1984 by Michael Dell, the computer industry's longest-tenured chief executive officer, on a simple concept: that by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add

unnecessary time and cost, or who can diminish Dell's understanding of customer expectations. Headquartered in Round Rock, Texas, Dell Computer Corporation is a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Dell's climb to market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling standards-based computing products and services. Unique resources of Dell: Direct customer relationship is the key to Dells business model, and provides distinct advantages over the indirect sales model. Dells direct relationship with the customer allows it to tailor its offerings to customer needs, offer add-on products and services, and use the Internet to offer a variety of customer services. In addition, Dells PCs are built to customers specificatio ns upon receipt of an order, giving Dell additional advantages over indirect PC vendors who must try to forecast demand and ship products based on those forecasts. Dells direct sales and build to-order model has achieved superior performance in the PC industry in terms of inventory turnover, reduced overhead, cash conversion, and return on investment. Dells business model is simple in concept, but very complex in execution. Dell has established close relationships with suppliers, which enable it to enjoy many of benefits of vertical integration like constant supply of raw materials and lower factor costs. By having suppliers hubs located near the manufacturing plants and an efficient supply chain with the concept of Virtual Integration. In order to hit the market in a timely manner with new products that are based on new technologies, Dell had to constantly improve its supply chain. Furthermore, manufacturing processes had to be improved to compliment the efficiencies created by the supply chain. To manage this complicated infrastructure, Dell had to recruit, train and retain a capable work force that can grow as the company grows.

Who creates value within the firm? The business world is full of choices, networks and endless opportunity. Value creates when customers use a product because it meets their needs better than the competitions. Dell is able to address its problems associated with rapid growth, and build itself into a profitable company. Value chain illustrates the most crucial aspect of value chain management. In value chain, there are two categories primary and the support activities. Under primary activities there are inbound and outbound logistics, sales and marketing activities. They represent the services involved in the core of value chain. On the other hand, under support activities there are human resource management activities, technology development, procurement activities and the organizational infrastructure to support the processes of value creation at the center of value chain. The operations of Dell has been very effective in terms of managing the inventory levels near to zero and making its suppliers locate their warehouses and factories near to Dells own manufacturing and assembly unit. This indicates that the company has been applying the JIT (Just In Time) approach for the manufacturing of their products. Moreover, this has resulted in the improved efficiency. And due to this, Dell has extremely low transfer time due to strict inventory control and high productivity. Furthermore, as a result of its efficient structure, the company increased its profit margin by selling the computers directly to the end users which also boosted the customer relationships of the company. Moreover, Dell is very famous for providing good customer service both before and after the sales. The company has good relationships both with small and big information technology equipment and services companies such as Electronic Data Systems ( EDS), Cox Communications, Inc and etc. And the company has been offering post sales services through Premier Dell.com website where customers can log in and select the appropriate configurations for their IT systems. Pre and post sales support of the company is a very good image for the company and it can be incorporated as part of the companys competitive advantage. Dell always tries to value different perspective because everyone has a contribution to make its own product. All the primary and secondary activities create strong value within the firm.

Comparison of resources with other firms: Dells business structure of virtual integration allowed it to excel in an incredibly competitive industry. It's competitiveness in the industry resulted from a highly efficient business model that sought out every opportunity to work more productively without compromising the quality of their product. Dells low-cost, direct sales model shaped its position in the industry and Other companies have struggled to copy this innovation.

VRIO:

Valuable

In order for a resource to help create a competitive advantage, the resource has to be valuable. Dell has managed to position its products as reasonably prices and high performing. The reasonable prices that Dell charges for its products have played a role in helping the Organization become successful in the highly competitive business environment that Dell operates in.

Rarity

Some rare resources are likely to create a competitive advantage as it would be hard to find the resource required to create the competitive advantage with a lot of competitors. The fact that Dell is able to develop products according to customer specification makes the company rare since majority of the firms that Dell competes with do not offer made to order services.

Imitability

Resources that are hard to imitate can be useful to create competitive advantage since they cannot be copied by the competitors. When it comes to Imitability, majority of Dell products can be easily imitated though the customization aspect might prove to be hard to imitate for some competitors since they do not have the required resources to offers such services.

Organization

In order for a valuable, rare and hard to imitate resource to be beneficial to an organization, a strong and suitable organization is required. Dells organization structure can be said to be strong and suitable since it has throughout the years managed to keep the company successful to its stakeholders. Moreover, the management is suitable since it had to realign strategies at times when it has deemed appropriate implying that Dells organization is competent and responsive to environmental changes. We believe Dell Computer Corporation is also known as the principles of a Zero Time organization. Zero-Time Organization provides a perspective of the company using the core characteristics of Zero Time: Zero-value-gaps, Zero-learning-gaps, Zero-management-gaps-gaps, Zero-process-gaps and Zero-inclusion-gaps. Dell is successfully implements each of these disciplines and closer to its goal.

Dell VRIO analysis

Location based on the distinction between labour intensive and capital intensive For major components (e.g. hard disk drives) they should work with suppliers with global capabilities. Local suppliers in each region can provide other parts. Sourcing of materials for PCs (major components and systems) should be done centrally, while, sourcing of consumables (box and shipping material, printing of keyboards, printing of manuals, etc.) should be local. Countries that possess a comparative advantage The resources and capabilities should be located in low cost locations. Suppliers are required to maintain inventory near or in Dell plants to support Dells build-to-order production. They can produce elsewhere and ship to supply hubs, or they can set up production nearby. Dell should source its major components for all locations from their headquarters. This will allow Dell to consolidate its buying power and get better terms from suppliers.