For the analysis, I have chosen Dell, Inc. This is an international information technology corporation, with headquarters based in USA (Round Rock in Texas) and more than 96 thousand people employed worldwide. Dell is a technological company, one of the largest PC manufacturers and suppliers in the USA and worldwide. Dell offers five lines of desktop systems, server and networking line, storage devices, notebooks and netbooks, software and peripherals, as well as IT and financial services. Thus, with regard to operations process, Dell, Inc. provides both products and services to its customers. The main business process of Dell, Inc. are still related to manufacturing hardware components, and in this paper Dell Inc. will be considered mostly as a manufacturer.
In general, operations management includes product creation, development, manufacturing and distribution. Dell became on of PC market leaders due to its notable build-to-order value chain, which evolved in contrast to traditional in PC manufacturing industry value chain. Dell gained a significant percent of B2B computer sales, because it optimized its value chain and provided just-in-time ordering. The operations in Dell are generally performed in the following order: manufacturing of PC components, customer assembly of computers on order of the customers, purchase, service and support activities (Budgoli, 2010). This strategy was extremely effective when business segment of PC market was rapidly growing, and when Dell managed to lower its product costs due to the just-in-time manufacturing system. Moreover, Dell was known for perfect and quick customer support.
Currently, the company is losing its leading positions because market drivers have significantly changed. First of all, other PC manufacturers managed to optimize their costs even more effectively than Dell. Secondly, the market is driven by personal and mobile devices, and by innovative solutions. Major competitors of Dell are HP and Apple (Fogliatto, 2010), HP due to its competitive costs and effective service, Apple ”“ due to its innovation and successful marketing.
New strategy of Dell, Inc. is thus focused on growth and competitiveness. They are planning to review costs and to possibly matching costs to customer segments and relocating their production centers to cheaper regions. Dell has identified five growth priorities: consumer, enterprise, notebooks, small/medium business and emerging countries.
Dell is also planning to focus more on innovations and on reducing its product cycle. In general, Dell is still one of the strongest PC manufacturers, but currently it has to face strong competition and should thus adjust the strategy of development.