DELL COMAPANY

Masters of Computer Applications

Submitted to

Lovely Professional University

Phagwara, (Punjab)

OPR602: PRODUCTION AND OPERATIONS MANAGEMENT

Name Submitted To:-

Ramlal Kumar Dr. Atanu Bhattacharya
(12112102)

To Whom so ever It May Concern

I am Ramlal Kumar 12112102, here by declare that the work
done by me on “ITC” Case Study 12-03-2023 Deposit Date
Lovely professional University , Phagwara, Punjab, is a record of
original work for the partial fulfillment of the requirements for
the award of the degree, Masters of Computer Applications.

Name
Ramlal Kumar
(12112102)

Acknowledgment

The Case Study opportunity we had with Head was a great chance for learning and
PRODUCTION AND OPERATIONS MANAGEMENT. This is a Operation Management
Therefore, I consider myself as a very lucky individual as I was provided with an
opportunity to be a part of this Case Study. I am also grateful for having a chance to
learn from Case Study who led me through this First Case Study. I express my deepest
thanks to Head Dr. Atanu Bhattacharya School of Computer
Application, Lovely Professional University for allowing me to grab this opportunity. I
choose this moment to acknowledge his contribution gratefully by giving necessary
advices and guidance to make my Investigation a good learning experience.

Name
Ramlal Kumar

Page 1
(12112102)

DELL COMPANY
Dell is an American privately owned multinational computer technology company based in
Round Rock, Texas, United States, that develops, sells, repairs and supports computers and related
products and services. Bearing the name of its founder, Michael Dell, the company is one of the
largest technological corporations in the world, employing more than 103,300 people worldwide.

Dell sells personal computers (PCs), servers, data storage devices, network switches, software,
computer peripherals, HDTVs, cameras, printers, MP3 players and also electronics built by other
manufacturers. The company is well known for its innovations in supply chain management and
electronic commerce, particularly its direct-sales model and its "build-to-order" or "configure to
order" approach to manufacturing—delivering individual PCs configured to customer
specifications. Dell was a pure hardware vendor for much of its existence, but with the acquisition
in 2009 of Perot Systems, Dell entered the market for IT services. The company has since made
additional acquisitions in storage and networking systems, with the aim of expanding their
portfolio from offering computers only to delivering complete solutions for enterprise customers.

Dell was listed at number 51 in the Fortune 500 list, until 2014. After going private in 2013, the
newly confidential nature of its financial information prevents the company from being ranked by
Fortune. In 2014 it was the third largest PC vendor in the world after Lenovo and HP. Dell is
currently the #1 shipper of PC monitors in the world. Dell is the sixth largest company in Texas
by total revenue, according to Fortune magazine. It is the second largest non-oil company in Texas
– behind AT&T – and the largest company in the Greater Austin area. It was a publicly traded
company (NASDAQ: DELL), as well as a component of the NASDAQ-100 and S&P 500, until it
was taken private in a leveraged buyout which closed on October 30, 2013.

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CONTENTS

• EXECUTIVE SUMMARY
• COMPANY PROFILE
• DELL MISSION STATEMENT
• DELL VISION STATEMENT
• PRODUCTS
• ORGANIZATION STRUCTURE
• MANUFACTURING
• PROCESS STRATEGIES
• GROWTH STRATEGY
• DELL’S CRM STRATEGY
• CORE ELEMENTS OF STRATEGY
• BUSINESS STRATEGY
• DIRECT SALESUPPLY CHAIN STRATEGY OF DELL
• DELL’S INITIAL COMPETITIVE ADVANTAGE
• COMPETITIORS
• PEST ANALYSIS
• DELL SWOT ANALYSIS
• PORTER’S FIVE FORCES & ANALYSIS
• CONCLUSION
• REFERENCES

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 COMPANY PROFILE

HISTORY

Dell traces its origins to 1984, when Michael Dell created Dell Computer Corporation, which at
the time did business as PC's limited, while a student of the University of Texas at Austin. The
dorm-room headquartered company sold IBM PC-compatible computers built from stock
components. Dell dropped out of school to focus full-time on his fledgling business, after getting
$1,000 in expansion-capital from his family. In 1985, the company produced the first computer of
its own design, the Turbo PC, which sold for $795. PC's Limited advertised its systems in national
computer magazines for sale directly to consumers and custom assembled each ordered unit
according to a selection of options. The company grossed more than
$73 million in its first year of operation.

In 1986, Michael Dell brought in Lee Walker, a 51-year-old venture capitalist, as president and
chief operating officer, to serve as Michael's mentor and implement Michael's ideas for growing
the company. Walker was also instrumental in recruiting members to the board of directors when
the company went public in 1988. Walker retired in 1990 due to health, and Michael Dell hired
Morton Meyerson, former CEO and president of Electronic Data Systems to transform the
company from a fast-growing medium-sized firm into a billion-dollar enterprise.

The company dropped the PC’s Limited name in 1987 to become Dell Computer Corporation and
began expanding globally. In June 1988, Dell's market capitalization grew by $30 million to $80
million from its June 22 initial public offering of 3.5 million shares at $8.50 a share. In 1992,
Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest
companies, making Michael Dell the youngest CEO of a Fortune 500 company ever.

In 1993, to complement its own direct sales channel, Dell planned to sell PCs at big-box retail
outlets such as Wal-Mart, which would have brought in an additional $125 million in annual
revenue. However, Bain consultant Kevin Rollins persuaded Michael Dell to pull out of these
deals, believing they would be money losers in the long run. Indeed, margins at retail were thin at

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 best and Dell left the reseller channel in 1994. Rollins would soon join Dell full-time and
eventually become the company President and CEO.

DELL MISSION STATEMENT

“Our mission is to be the most successful IT systems company in the world by delivering the best
customer experience in all markets we serve. In doing so, Dell will meet customer expectations of:

• highest quality
• leading technology
• competitive pricing
• individual and company accountability
• best-in-class service and support
• flexible customization capability
• superior corporate citizenship‖

DELL VISION STATEMENT

―With the power of direct and Dell’s team of talented people, we are able to provide customers
with superb value, high quality, relevant technology, customized systems, superior service and
support, products and services that are easy to buy and use.‖

Dell’s vision includes a culture where environmental excellence is second nature. Their operations
will place a high priority on waste minimization, recycling, reuse programs and pollution
prevention and align with the principles of their direct business model-efficiency delivers customer
value.

PRODUCTS

• Desktop computers
• Notebook computers
• Network servers
• Workstations
• Storage products Desktops
• Servers
• Netbooks

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• Peripherals
• Printers
• Scanners
• Pen Drives
• Smart Phones

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ORGANIZATION STRUCTURE

Michael Dell

VP
SVP Business VP Government
Educational
Development Relations
Services

Mid-Level Mid-Level
Mid-Level

Lower-Level Lower-Level Lower-Level

SUPPLIERS

MICROSOFT: for Windows

INTEL: for micro processors

NVIDIA: for Graphic chips

SONY: for monitors

MANUFACTURING

From its early beginnings, Dell operated as a pioneer in the "configure to order" approach to
manufacturing and delivering individual PCs configured to customer specifications. In contrast,
most PC manufacturers in those times delivered large orders to intermediaries on a quarterly basis.

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To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing
its products close to its customers. This also allows for implementing a just-intime (JIT)
manufacturing approach, which minimizes inventory costs. Low inventory is another signature of
the Dell business model a critical consideration in an industry where components depreciate very
rapidly.

Dell's manufacturing process covers assembly, software installation, functional testing (including
"burn-in"), and quality control. Throughout most of the company's history, Dell manufactured
desktop machines in-house and contracted out manufacturing of base notebooks for configuration
in-house.

However, the company's approach has changed, as cited in the 2006 Annual Report, which states,
"We are continuing to expand our use of original design manufacturing partnerships and
manufacturing outsourcing relationships." The Wall Street Journal reported in September 2008
that "Dell has approached contract computer manufacturers with offers to sell" their plants. By the
late 2000s, Dell's "configure to order" approach of manufacturing and delivering individual PCs
configured to customer specifications from its US facilities was no longer as efficient or
competitive with high-volume Asian contract manufacturers as PCs became powerful low-cost
commodities.

Dell opened plants in Penang, Malaysia in 1995 and in Xiamen, China in 1999. These facilities
serve the Asian market and assemble 95% of Dell notebooks. Dell Inc. has invested an estimated
$60 million in a new manufacturing unit in Chennai, India, to support the sales of its products in
the Indian subcontinent. Indian-made products bear the "Made in India" mark. In 2007 the Chennai
facility had the target of producing 400,000 desktop PCs, and plans envisaged it starting to produce
notebook PCs and other products in the second half of 2007.

PROCESS STRATEGIES

A process strategy defines how to produce a product or provide a service that Meets or exceeds
customer requirements, cost and managerial goals. And has long term effects on Efficiency,
production flexibility, Costs and quality.

Basically there are four process strategies:

• Process Focus

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 • Repetitive Focus
• Product Focus
• Mass Customization Focus

PROCESS FOCUS

• Facilities are organized around specific activities or processes

• General purpose equipment and skilled personnel
• High degree of product flexibility
• Typically high costs and low equipment utilization
• Product flows may vary considerably making planning and scheduling a challenge

REPETITIVE FOCUS

• Facilities often organized as assembly lines

• Characterized by modules with parts and assemblies made previously
• Modules may be combined for many output options
• Less flexibility than process-focused facilities but more efficient

PRODUCT FOCUS

• Facilities are organized by product

• High volume but low variety of products
• Long, continuous production runs enable efficient processes
• Typically high fixed cost but low variable cost
• Generally less skilled labor

MASS CUSTOMIZATION

Dell Computer Company’s Process Strategy is “Mass customization” that provides a

competitive advantage through:

• The rapid, low-cost production of goods and service to satisfy increasingly unique customer
desires

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 • Combines the flexibility of a process focus with the efficiency of a product focus
• Sell custom-built PCs directly to consumer
• Lean production processes and good product design allow responsiveness
• Integrate the Web into every aspect of its business
• Focus research on software designed to make installation and configuration of its PCs fast
and simple

GROWTH STRATEGY

• Process streamlining: Dell built a significant advantage in the marketplace by focusing

on innovations in the supply chain. Dell focused on enabling "just in time" delivery of parts
and components.
• Product diversification: Dell has used a diversification strategy to enable business growth.
• Market penetration: Dell has achieved market penetration internationally with various
segmentation strategies.

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0
DELL’S CRM STRATEGY

Make segmentation and identify customers

Listen to their customers

Learn from customers

Each member is a student who is responsible of

learning from the customers.

CORE ELEMENTS OF STRATEGY

• Build-to-order manufacturing
• Mass customization
• Partnerships with suppliers
• Just-in-time components inventories
• Direct sales
• Market segmentation
• Customer service
• Extensive data and information sharing with both supply partners and customers

BUSINESS STRATEGY

Dells Company's success is the connection among all of its competencies. The direct sale is
dependent on the built-to-order system, and the built-to-order system relies on the supplier
integration system. Hence a dell pc is intended to reduce human touches in making, contractor are
certain to make sure high product excellence, contractor are physically included into making and
the whole charge accomplishment process id run by a stylish mixture of inner and outer
information.
A benefit of direct sales and build-to-order making is that costly catalogue doesn't put up in the
path and doesn't gain its value earlier than it can be put on the market and fresh goods can be
brought in not having to remove older inventory in the path. Dell knows so much information
about the end user, information such as: what product was bought from dell, how many products
were bought, where the product was delivered to and so on. The following discuss how the
company achieved success, the process involved.

DIRECT SALE

Michael Dell said this direct association ―assembles important information" concerning the
client, therefore Dell is familiar with its clients, details that allow Dell to propose add-on products
and services, and remain, in wide-ranging, closer to the client. This "make available Dell with
assets of promotion and manufactured goods growth idea".

Michael Dell states that there are two major services which bring Dell closer to its clients: Premier
Pages and Platinum Councils. Premier Pages, now called Premier.Dell.com, are modified IT
procurement and help websites for big customers, which allows them choose and control their
acquisition from Dell, hence leaving to salespeople a more review task. Premier.Dell.com stands
for a personalized auction place and as Dell has discovered how important that is, it has enlarged
the amount of Premier Pages from 1000 in 1998 to 50,000 in 2000 Platinum assembly are local
gathering of Dell's major clients, where management, salespeople and technicians talk about their
practice with Dell and their requirements and prospect from the technology. in addition, Dell's
client understanding proposal, Dell meeting, the Direct2Dell blog and the Idea Storm demonstrate
the significance that Dell set on its client interaction

This model called the direct sale model has been in existence for ages. Dell Company produced
almost all its products after an order was made by a customer. Presently, Dell is among on the few
computer makers that builds their own personal product. This type of process has successful over
the years. It's a competitive advantage over competitors, while also selling its products at a lesser
price. Dell also managed to offload much of the financial burden of manufacturing to suppliers,
and its manufacturing efficiency is legendary, because of this model dell has grown faster than its
competitors HP and Acer.

SUPPLY CHAIN STRATEGY OF DELL

Supply chain management is becoming significant in this day trading globe. In addition in today's
supply chains there is perpendicular breakdown of manufacture, signifying that businesses are
liable to focus on their core capability and subcontract their logistics and less important procedures
just to keep capital. Delay is a common run through, where there is a setback in result construction
and particularly in developing of a produce, ensuing in improved forecasts about the end
manufactured goods requirement over time Michael Dell's calculated selection and his efficient
method of understanding them have taken part in an important role in Dell's victory tale. The
major constituent of his winning company model of the corporation is its supply chain
management; for this reason, a lot of theorists of Supply Chain Management tried to examine
Dell's SC approach, and quite a lot of businesses have tried to "duplicate" the business model,
without accomplishing it yet. This detail illustrates the difficulty of Dell's SC tactic and its
exceptional method of positioning it to training. The important fundamentals of Dell's business
form are its direct sales model, built-to-order and supplier integration.

A supply chain is made up of all parts concerned, in satisfying a client demand. In other words, a
supply chain (SC) includes all organizations that collaborate in order to produce and deliver a
finished product to the final customer, as well as the customer himself. Supply chains may be
dissimilar in dimension, difficulty of dealings among the members and sharing of material
existence.

The supply chain of Dell includes:

• The client

• Dell's website

• Dell's gathering plant

• Dell's dealers

SUPPLY CHAIN REACTION

• React to broad variety of quantities demanded

• Attempt to meet short lead times

• Handle a wide variety of goods

• construct high inventive goods

• Handle delivery doubt

Separate from the direct model and build-to-order supply chain scheme, forecasters have treated
with previous matters which will add to Dell's accomplishment. point out, Dell's undisclosed
formula relating to its supply chain is "suitable combination of procedure and individuals
fundamentals" from Michael Dell's statements that "our R&D center of attention on procedure and
excellence development in developing" and "one of our main confrontation is looking for directors
who can split and act in response to quick changes" .The solution of supply chains is individuals,
because they introduce the Supply chain into existence.

DELL’S INITIAL COMPETITIVE ADVANTAGE

As a multinational enterprise, Dell is very competent in executing its global strategy, giving the
company a competitive advantage that was unrivaled in the first half of the 2000s.

One of the sources of Dell’s initial competitive advantage can be attributed to its famous direct
selling and build-to-order approach. This just-in-time (JIT) strategy allowed it to operate with the
lowest inventory level in the industry. Reducing excess inventory provided Dell with a significant
cost advantage as component costs depreciate as much as 1% weekly in the electronics industry.
Direct selling has also allowed Dell to bypass intermediaries such as wholesalers and retailers,
reducing costs even further. In addition, Dell offered customizable options that proved to be
customer-centric and attractive.

Dell’s global force of 200 suppliers had access to automated and real-time information such as
demand trends and volume expectations for different components. This close relationship with
suppliers and the direct selling model has allowed Dell to balance demand and supply remarkably
well.

Dell conducts its business operations worldwide in many different foreign markets. One of Dell’s
motivations to internationalize was to secure supplies and gain access to low-cost factors. Dell
situated manufacturing plants across the world, seeking out location-specific advantages such as
low labour costs and highly productive workforces. The manufacturing operations are also in close
proximity to important regional markets to minimize delay between purchase and delivery. Dell’s
choice of locations had indeed armed it with an initial competitive advantage.

COMPETITIORS
Dell's major competitors include:

• Hewlett Packard (HP)

• Acer
• Fujitsu
• Toshiba
 • Gateway
• Sony
• Asus

• Lenovo
• IBM
• MSI
• Samsung
• Apple

PEST ANALYSIS

Political

Technolo- PEST
Economic
gical ANALYSIS

Social

POLITICAL

The political aspects are likely to include worldwide, government directives, funding council and
institutional policies. In this case, one of the biggest threat that DELL concerns about is political
or legal environment because political factors involve government regulations and legal issues
defining the term & conditions under which the organization has to operate. It becomes vital to
take this factor into account because many countries still have some restraining policies which are
maintained to defend domestic manufacturers and production.

ECONOMIC

The economic environment refers to the nature and route of the economy in which an organization
competes or may contend. It includes funding mechanism and streams, company directives,
budgetary restrictions and income generation targets of the enterprise. A primary threat that Dell
encounter is the problem of software piracy.

Moreover, it looks for the total GDP and GDP per head growth rates of the relevant country.
Additional factors can be consumer expenditure, interest rates, currency fluctuations, exchange
rates and other costs in order to evaluate the influence of economic factors on the organization.

SOCIAL

This factor is referred as a society’s culture, attitudes and values. Particularly, it may include
change in lifestyle, consumerism, attitude to work, education & health, demographic changes,
distribution of income and social mobility. As a result, commoditization of the industries enables
it to be accessible to the consumers earning lower income. External social factor affects the
organization in terms of providing them the solution according to their demand because customers
choose a single vendor to meet all of their requirements. Therefore, to remain competitive, it is
essential for the company to satisfy them with the best service and solution.

TECHNOLOGICAL

There is hardly any industry that is characterized by a quicker technological development than the
computer industry. Most importantly, speed of change and adoption of new technologies by other
organizations affect the organization’s effectiveness. Moreover, the rate of obsolescence and the
impact of the internet use also matters in this framework.
DELL SWOT ANALYSIS

Strenths Weaknesses

Oppurtuniti
Threats
-es

STRENGTHS

• Brand name: Dell has a very strong brand reputation for quality products. Its brand is
valued at $ 7.5 billion.

• Product customization: Dell allows its customers to customize their laptops. Such
services were not originally found within any other major computer retailer (and currently
only Sony and Toshiba allow that), but add great value to the customers and provides Dell
with a competitive advantage.

• Environmental record: Dell is engaged in many green initiatives and has received many
rewards for being an eco-friendly business. This is a benefit when working with public and
government agencies.

• Competency in mergers and acquisitions: Over the last five years Dell has spent $13
billion for successful mergers and acquisitions, which brought patents, new capabilities,
assets and skills to the business.
 • Direct selling business model: Dell doesn’t sell its products through big-box retail outlets
but instead sells directly to consumers and enterprises, keeping their already thin profit
margin to themselves.

WEAKNESSES

• Commodity products: The large stream of Dell’s revenues comes from computer,
especially laptop, sales, which is a commoditized product. Computer hardware
(commodity) products are sold with a very low profit margin.

• Poor customer services: Once praised, Dell’s customer services deteriorated due to
outsourcing its call centers offshore. Dell invested a large sum of money in fixing this, but
hasn’t yet regained its previous reputation for customer services.

• Low investments in R&D: The company spends a much lower percentage of its income
on R&D that its main competitors and thus, missed an opportunity to develop strong
products for smartphones and tablet markets as well as to learn new skill and capabilities.

• Weak patent portfolio. Due to low spending on R&D Dell hasn’t acquired a strong
portfolio of patents and is now finds it hard to compete in lucrative smartphones and tablets
market.

• Too few retail locations. Selling products online saves money and allows for product
customization but provides less visibility for the products. The consumer finds it hard to
trust the products if it can’t hold it first in his hands.

• Low differentiation. Low price was once Dell’s competitive advantage but the company
is no longer able to provide competitive prices. Apart from the price, Dell’s products are
little differentiated from competitors’ products and are in competitive disadvantage if the
price offered by competitor is lower.

OPPORTUNITIES

• Expand services and enterprise solutions divisions: Dell provides various services
(cloud, security and infrastructure) and enterprise solutions (servers, networking and
storage), which are the most profitable Dell’s business at the moment. Dell business should
 focus on growing these divisions as they promise better growth opportunities and higher
profit margins.

• Obtain more patents through acquisitions: If Dell wants to diversify; it needs new
technology patents and new ideas. Dell hasn’t properly established its R&D facilities to
discover new technologies and patents, so the only feasible way to obtain patents and
technologies is to acquire other companies.
• Strengthen their presence in emerging markets: Emerging economies are the fastest
growing markets for laptops, tablets and other electronic devices. Dell has a good presence
in these markets but should strengthen its position as the company experiences declining
market share.

• Tablet market growth: Tablet market is expected to grow in double digits for the next
few years and the company has a great opportunity to release new tablet models and benefit
from the market growth.

THREATS

• Growing demand for smartphones and tablets. With a lower price and strongly
improved capabilities, consumers often choose tablets and smartphones over laptops. The
growing demand for the previous devices takes a share out of laptops, the main stream of
revenue for Dell.

• Profit margin decline on hardware products. Dell’s main income is from selling
hardware products, which prices will increase in the future due to rising raw material prices.
This will add to costs for Dell and will further cut the profit margin.

• Slowing growth rate of the laptops market. Growth rate of the computer market is
slowing down and in the near future the markets will become saturated. It will prove hard
for Dell to compete in such market or at least fight back the lost market share.

• Intense competition. The company faces intense competition in all its business segments.
It competes in terms of price, quality, brand, technology, reputation, distribution and range
of products, with Acer, Apple, HP, IBM, Lenovo and Toshiba.
PORTER’S FIVE FORCES & ANALYSIS

According to Porter, the nature of competitiveness in a given industry can be viewed as a composite
of five forces:

• Threat of New Entrants

• Threat for Substitute

• Bargaining Power of Supplier

• Bargaining Power of Customer

• Competitive Rivalry

THREAT OF NEW ENTRANTS: MODERATE

• Low capital investment for independent stores

• Low product differentiation
• Brand name may be a barrier to entry
• Low economies of scale
• No legal or governmental barriers
 • Decreasing profitability shows that there is a threat of new entrants

RIVALRY AMONG COMPETITORS: HIGH

• High concentration
• Price War: Low Margin
• Decreasing profitability
• Low differentiation
• However, in the midst of sever competition, Dell can still gain market share from other
competitors. That proves Dell’s business strategies have been successful.

THREAT OF SUBSTITUTES: LOW

• Strong presence of PC’s throughout society

• One computer for every three people in the U.S.
• Only substitute for PC: Apple Computer.
• However, high price, and lack of software support prevent people from switching to Apple
system.

BARGAINING POWER OF BUYER: HIGH

• Highly price sensitive

• Reliability and customer service become important factors.
• Dell’s products are very reliable and customer service is outstanding. These two factors
help Dell to create certain brand royalty. But that’s given the fact that the Company set the
prices very low. If the prices are raised too high, customers will not hesitate to switch.

BARGAINING POWER OF SUPPLIERS: HIGH

• Large number of suppliers for components like hardware, keyboards, etc.

• But two major inputs are monopolized
 • Microsoft standard for all PC’s
• Intel standard for most PC’s
• High switching costs

CONCLUSION

The company Dell has developed quickly becoming a component of the top seller in the computer
market and also enhancing the marketplace appraisal and significance. Dell has constantly been
able to succeed for the duration of difficulty of period base contest. Dell has recurrently
transformed and unmitigated its business model at the same time as remarkable equilibrium
between organizing and edibility. The company has extended its accomplish to millions of likely
clients at low marginal cost by making use of the internet.

Dell is exceptional because of its connection to its suppliers, which makes possible its build-
toorder model. Dell completely takes on the method of the comprehensive venture by screening
its dealers as an essential fraction of achieving trade and an important part for its accomplishment.

REFERENCES

http://www.ukessays.com/essays/information-technology/an-executive-summary-of-
dellcomputers-information-technology-essay.php
http://www.strategicmanagementinsight.com/swot-analyses/dell-swot-analysis.html
https://en.wikipedia.org/wiki/Dell http://www.123helpme.com/dell-computers-strategy-
view.asp?id=164561

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