1. The fundamental reason for success, with a comparison to another successful and unsuccessful company?
2. How can the cmpany maintain its competitive advantage?
3. Could this be suitable for other companies and if so explain why, if not explain why?
4. Discuss the concept of sustainability and its relevance to the company featured in the case study.
Logistics management is regarded as the supply chain management component that is mainly adopted with the motive to meet actual requirement of the target market with the help of planning, control and implementation of the effective storage and movement of goods and services (Mangan, Lalwani, & Lalwani, 2016). In case if any company is not able to manage its logistics practice in most effective manner then it has adverse impact on its overall performance and the main impact is that it becomes difficult to supply products and services to the targeted customers on time and in most efficient manner. Logistics management is all about the tactics the company like how the firm plans to transport its products and whether it is done successfully or not.
The present report is based on the logistics management strategies adopted by Dell that has become one of the main reason behind success of the firm in the market. Further, it has identified that what Dell has done different in the area of logistics through which business performance has increased as compared with the competitors.
1. Overview of Dell’s logistics management strategy
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Logistics is one of the most integral part in the supply chain and it represents how efficiently the products and services of the firm are transported and this contributes a lot in enhancing efficiency of the firm (Christopher, 2016). Dell is considered to be leader in the computer technology industry that offers different form of computers, laptops and other electronic products in order to meet with the requirement of its target market. In case of company like Dell the logistics management strategy matters a lot as it involves effective transportation of the products so that goods can be transported to the customers in lesser period of time and in turn it has positive impact on the brand image of the firm.
Through internet the company is able to know the actual interest of its customers like what products they prefer to buy and what all modifications are required in the product range so as to maintain the overall position in the market. The company is quite responsive in satisfying the need of the customers and this is also valid reason behind success of Dell in the market where it operates. The organization is having close relationship with its suppliers that allow to call off inventory from the suppliers at very short notice and the organization works in partnership with different partnership so as to introduce new product in the market (Jacobs, Chase, & Lummus, 2014). Within the workplace culture of continuous improvement has been implemented on continuous basis and this positively affects the supply chain practices of the business. Michael Dell who is founder of the company is also one of the strongest contributors in the success of the firm. Leadership role of the individual has positively affected the each and every operation of the company and this has made the business practices of Dell much more successful in the market. In near future it is required for Dell to focus on these type of practices so as to accomplish its desired goals.
Considering the case of Dell, one of the main reason behind success of the firm in the market is its distribution strategy where one specific strategy has been adopted by the firm through which products are delivered to the target market in lesser time and in turn it represents the efficiency of the firm (Song, & Parola, 2015). Since the establishment of the firm the products are sold directly to the customers and in the year 1996 the economics magazine stated Dell as “Selling PCs like banana”. No doubt the market where Dell operates is highly competitive and in turn large number of players are present in the market that are offering electronic products such as laptop, computer etc. Dell’s logistics management strategy is well planned and all the actions are being carried out as per the directions set by the top executives and in turn it has become one of the main reason behind success of the firm in the market where at present operations are being carried out. The operations of Dell are not restricted to one country but at present its operations are conducted throughout the world (Waters, & Rinsler, 2014).
In the entire supply chain no such intermediaries are present and avoidance of different parties such as retailer, wholesaler etc directly contributes in delivering products to the customers in short period of time. This is the main reason due to which customers of Dell are highly satisfied with the practices of the business and in turn best quality products are delivered to the customers as per their actual expectations (Stadtler, 2015). The finished products that are manufactured by Dell are delivered by the third party logistics partner direct from the manufacturing plant to the customers of the firm. Further, internet is regarded as the key to Dell’s strategy that contributes in direct communication with the target market along with the real time visibility of the purchasing patterns.
On the other hand, the competitor of Dell named Acer is one of the unsuccessful company whose supply chain management practices are not so effective as compared with Dell. In case of Acer many intermediaries are present such as wholesaler, retailer etc that supports in supplying products to the customers. This is one of the main reason due to which delay in supply chain as one of the issue is mainly faced. Further, it is not present in case of Dell and this has contributed in the success of the firm (Schönsleben, 2016). For communication purpose the company has used internet but in case of Acer no such mode has been adopted by the firm for interacting with its target market. Dell’s mass customization approach has supported a lot in the success of the firm where small number of platforms are manufactured that are mainly customized as per the demand of the customers. So, this type of tactic is not undertaken in case of Acer and due to this reason the firm of unsuccessful in comparison with Dell.
2. How can the company maintain competitive advantage?
In the era of globalization competition is largely present in the market and for every company it is the toughest task to decide what are the tactics that can be undertaken for gaining competitive advantage. In case of Dell first and foremost thing that can be adopted by the firm for gaining competitive advantage is avoiding intermediaries in near future also where the company is required to supply products to the customers directly. The main positive impact will be that it will support in reducing inventory in the supply chain. Further, by forecasting the demand more accurately it is possible for the entity to satisfy the requirement of its customers in the best possible manner (Rushton, Croucher, & Baker, 2014).
Mainly internet as one of the platform has been adopted by the company for interacting with customers and if in case this platform is adopted for longer period of time then on long term basis it will provide real strength to the firm. In near future the concept of mass customization be utilized by the company in proper manner as it is also one of the main strength of the business. Through effective utilization of this concept it is possible to gain competitive advantage and in turn performance of the firm can be increased easily. Many times it is possible that intermediaries in the supply chain adversely affects the business performance and this is the main reason Dell operates with intermediary and all its business practices are strengthened with the help of this.
In order to maintain competitive advantage it is required for the business to focus on single person build where in accordance with this concept the company is able to enhance the job satisfaction level and the level of product quality can be enhanced easily (Monczka, et. al 2015).
Through all these tactics it is possible for Dell to gain competitive advantage and the business can easily enhance its long term performance. On continuous basis it is required to monitor the entire supply chain so that any form of loophole can be managed easily. Through proper monitoring it is possible to build the real strength of the business and in turn favorable results can be accomplished easily. The Dell’s formula of selling products directly to its target market can assist in maintaining competitive advantage and in near future it can provide benefits such as rise in profitability level, market share, customer base etc.
Mainly Dell is focusing on expanding its product range especially into the high margin products that involves projectors and small servers. Along with this the firm is looking towards revenue from the peripherals that involve replacement ink cartridges for Dell branded printers. Moreover, in order to gain competitive advantage in near future also the main option present with Dell is to offer products with the help of partner retail outlet and this can contribute a lot in increasing sales revenue of the business (Ho, Zheng, Yildiz, & Talluri, 2015). Partner retail outlet is one of the best way to reach to the target market and in turn best products can be delivered to the customers as per their actual expectations.
3. Could it be suitable for other companies?
The concept that is undertaken by Dell like selling its product range without any intermediary is highly effective. This is the main process that has mainly developed strength of the firm and in turn its customer satisfaction level is very high with the help of the approach undertaken. The approach of avoiding intermediaries is applicable in case of other companies also. It is applicable in case of any company that is offering books with the help of online medium. Through internet it is possible for the customers to select individual chapters or in case of children’s book customization option is present where it is possible to customize the book with the name of children and so on (Meixell & Luoma, 2015). So, in this way the approach undertaken by Dell can be easily applied to any company that offers book through the online medium.
Another sector can be retail car sales where many of the customers have option to purchase cars through the online medium and this approach is applicable in this case. Customers can easily see the features of the cars, they can post their query and in turn best products can be purchased by them that suits well with their needs. Dell’s formula can work in other places but it is necessary that the company must be innovative and possess capability to manage the supply chain in the most effective manner. If any business does not have proper knowledge and planning skills for managing the supply chain then in such case it is quite difficult to apply the approach that is being undertaken by Dell. Companies that have mainly adopted internet in their strategy for direct communication with the customers in such case it is applicable to adopt the approach that is being undertaken by Dell at present.
The entire product range manufactured by Dell is visible at the website of the company where customers can post their query and they can select the best product as per their need (Heizer, 2016). This approach is suitable for companies such as HP, Samsung, Apple etc that are the main competitors of the Dell. All these companies can also offer the products to the target market with the assistance of Internet and through this it is quite possible to enhance the satisfaction level of the target market. Businesses can take full advantage of this concept if they have good planning tactics.
Considering the case of Dell where its supply chain is very short and in turn in very less period of time the firm is able to supply products to its target market. The reason behind this is avoidance of intermediaries where products can be directly offered to the customers. So, any business whose platform is online can easily take benefit of this concept and in turn it is possible to provide fill convenience to the customers as per their actual need and requirement.
4. Discuss the concept of sustainability and its relevance to Dell?
Sustainability within the business is regarded as the triple bottom line where this process undertakes the efforts of managing social, financial and environmental risks so as to grab the range of opportunities present in the business environment. In the modern era, the technology level is rising at faster pace and this is one of the challenging task in case of Dell. In this case sustainability is most important for the business as through this market performance can be improved easily (Brindley, 2017). Mainly sustainability is all about managing the business practices so as to reduce environmental burden and safeguarding surroundings in the best possible manner. In case of Dell also the sustainability practices are important where organization is required to adopt some tactics through which environmental burden can be reduced such as recycling the old system and contributing in making the society green. In the modern era, adverse impact of every company on the environment is rising at faster pace and due to this reason it is necessary for Dell to take some corrective actions so that its practices may positively influence the surroundings.
The concept of sustainability states that organization has to keep balance between people, profit and planet. Some effective business practices are present that needs to be undertaken by Dell and it contributes in enhancing performance of the firm in the market. Environment management system is one of the ways to become sustainable business where Dell can adopt some measures through which its environmental burden can be reduced and in turn it can bring favorable results for the business in the best possible manner. Second approach to sustainability is stakeholder engagement where Dell is required to build close connection with the parties associated with the business.
Engagement is all about involving stakeholders in the key decisions of the business so that organization performance can be maintained with the help of this. Life cycle analysis is another significant way to indulge into the practices of sustainability. Dell is required to identify social and environmental impact of its products and this can help in knowing whether the overall practices are sustainable or not (Waters & Rinsler, 2014). So, in this way concept of sustainability is most important for the business and by undertaking this approach it is possible for Dell to develop its brand image and in turn the firm can retain customers for longer time period.
The entire study carried out has supported in knowing about the reason behind success of Dell in the market where its logistics management practices are quite effective. Further, the company does not undertake intermediaries in its supplier and it has direct interaction with the customers with the help of communication channel. This has enhanced the level of customer satisfaction level. Apart from this customization approach undertaken contributes a lot in offering products as per the actual need of the target market and this is also one of the valid reason behind success of Dell in the market.
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