Dell Case Study

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CASE QUESTION AND ANSWER 1) Why do you think DELL chooses to have its factories in five different countries-two factories in the US and others in four different countries? Ans: Dell wants to have a competitive advantage over its competitors so setting its factories at five different countries may have lowered its cost of production. * Resources availability: - Manufacturers always need a resources to produce their products so it will be easy for the company to run if resources are available easily and nearby. They also look for foreign capital, technologies, and information they can use at home or any of their facilities abroad. Resources may be the labour, materials that are neesed to prodec goods. If these resources are cheaper then a company can produce its product at less cheaper price than its competitors. This will reduce their cost. For example: Dells factories have SLC(Suppliers Logistic Center) next to them from where the parts for computer are supplied 90 minutes. Dell may also be producing abroad because, sometimes company need to provide quick services which is not possible by establishing factory only in one place. * Accessibility: - By locating factories at different places DELL can supply finished product to its respective client being most cost efficient, thus reducing fright, shipping and cargo charges. * Growth strategy: - Company may establish its factory in foreign country to attract or target foreign customers. They may see a opportunity to grow in the future by selling products more and more. Its all about market segmentation, targeting, positioning and logistics of product. * Diversify sources of sales and supplies: - DELL has been acquiring same products from different countries by which they have been able to avoid the impact of price fluctuation in any one country. To avoid huge fluctuation in sales and profits

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