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Dell Computers: E-logistics, Warehousing & Inventory Management, Procurement and outsourcing, Customer Service Dell Computer is a leader in the e-commerce computer hardware market. It is an established brand that leads personal computer manufacturers both in US sales and overall online sales. Its trademark method of selling products to customers, corporate and individual consumers, emanates from the Dell Direct model, a Web-enabled infrastructure that allows customers to customise their PCs and order other products they need or desire. This virtual integration structure eliminates the need to manufacture everything, and instead uses the power of the Internet to share and exchange information with suppliers and vendors to build a truly superior supply chain that keeps inventory turnover low and costs to a minimum. The primary method Dell uses in order to achieve and sustain their competitive advantage is a unique, direct to customer business model. The model is known as Dell Direct, referring to their relations with their customers as being “direct.” This model helps Dell focus on price for performance, customisation, service and support, latest technology and superior shareholder value. Additionally, Dell is able to distinguish itself from its competitors with its customised on-demand manufacturing. With this customisation, Dell is able to offer customers more value for their money by eliminating intermediaries in their procurement, manufacturing and distribution processes. Instead of building there products and storing them on shelves in computer stores across America, Dell only takes orders off of their Web site, builds them specifically to personal needs and delivers to homes everywhere with in a few days. This style along with a couple other aspects has a profound affect on Dell’s competitive advantage. Dell’s primary resources include the most up-to-date technology and IT tools that allow it to successfully move along their superior supply chain and achieve the value they strive for. Dell’s value chain allows Dell and its suppliers to exchange information and interact with each other. The Internet, Dell’s key IT factor in its success, results in lower costs to customers than other retailers because customers tell Dell exactly what they want and Dell creates products for the consumer without experiencing wasteful resources in production. Overall, it is evident that Dell’s competitive advantage lies in its direct model success. Through Dell’s IT performance, which combines its resources, its relationship with suppliers and its consumer communication capabilities, Dell has developed one big advantage over its competitors. Analysis of Dell’s Competitive Advantage:

Dell is officially the No. 1 computer systems company in the world. Dell is able to sustain a competitive advantage over competitors in the computer industry because of an extremely efficient supply chain/distribution system. Dell is able to achieve superior profits in the industry because they are a knowledgeable user of information, communication, e-commerce, e-business, internet, and web technologies. Michael Dell states that Dell is so successful because of “Knowledge Management”. Mr. Dell defines that term by saying “physical assets are being replaced by intellectual assets.” This relates to Dell’s inventory system. Dell implements a Just-In-Time inventory system which operates on only 6 days of inventory. Dell is able to achieve greater profit margins and increased profits because of their inventory system. Inventory and labour are the highest liabilities of a firm. Since Dell only operates with 6 days worth of inventory, they are able to cut costs on warehousing, hiring people to track and maintain inventory, and avoid holding on to obsolete technology. This allows Dell to free up cash flow to invest in other value adding activities. Dell uses a JIT inventory system because Dell’s customers can only order computers directly through Dell itself. Dell uses their website to take customer’s orders. Dell focuses on direct sales, cutting out other distribution channels entirely. This allows for a deeper relationship with the customers wh...

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