Recommend how Dell should react to slower growth and increased competition in its core market segments. Explain how your new or modified positioning strategy enables Dell to leverage some of its existing advantages.
Essay specific features
June 12, 2015
No of pages / words:
4 / 1046
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Approximately 70% of the firm’s revenues were attributable to large corporate purchases in which Dell could maintain a negative cash conversion cycle.
In response to lower growth, Dell should isolate the key cost drivers as follows:
? Current Cost Drivers:
o Inputs – low due to short lead time
? COGS lower due to short lead time for components which fall in price by 27% annually
? Co-location of component suppliers minimizes inventory & cycle times and associated carrying costs
o Processes – efficient due to tight integration
? Direct sales minimize channel mark-ups & advertising
? Tightly integrated order entry, production and shipping minimized inventory buffers and cycle times
? Tight control of cash via inventory metrics
o Scale & Scope – adequate but growth is slowing
? Scale – 7...
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A graphical analysis of Dell’s value chain highlights the key support and primary activity interactions.
Having isolated the key elements to Dell’s success, we can further leverage these by repositioning in the following ways:
? Continue working closely with component suppliers with a focus on integrating the supply chain even more efficiently...
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