Dell Strategy Essay

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COMPETITIVE STRATEGY of Student: Nguyen Nhu Y Subject: Value Chain Management Tutor: Mr. Hoang Kim Chuong Date of Submission: April 28th 2012 INDEX 1. Dell's competitive/business strategy....................................................... 3 2. Sources of Dell’s competitive advantage .................................................. 3 3. How did Dell archive that competitive advantage source and Value chain strategy that Dell pursued ............................................................................................ 3 4. Risks of Dell's strategy ............................................................................. 4 5. Comparison between Dell and Toyota competitive strategy ..................... 5 6. References .............................................................................................. 7 Nguyen Nhu Y Page 2 1. Dell's competitive/business strategy Dell’s main competitive business is archiving lower manufacturing costs than most of its competitors. The strategy involved receiving orders directly from customers and avoiding distribution channels. It was an efficient and less expensive way of distribution and production. That enabled Dell to attain cost leadership and competitive advantage in PC market. 2. Sources of Dell’s competitive advantage In general, Dell’s competitive advantage came from 4 sources: - Just in time purchasing of components (avoiding falling prices) - Customers linked directly to manufacturer - Lower inventory costs (avoiding carrying and inventory costs based on cost of capital) - Distribution channel related costs and markups (which increases prices to the customer) Each one of these measures enabled costs cuts, quicker deliver time and a more reliable finished product. 3. How did Dell archive that competitive advantage source and Value

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