Essay About Dells Relatedness And Manufacturing System

Essay Preview: Dell
Report this essay
raising questions as to the viability of unrelated diversification strategies. [Textbook,
p186] Dells relatedness in diversification manifests itself in corporate relatedness. Dell
often introduces new products that while consumer electronics or computing devices,
may not share production resources. Instead, the knowledge about these various products
and services is very similar, and workers can transfer it across the corporation.
A firm can best implement an integrated cost leadership/differentiation businesslevel
strategy when a company can “adapt quickly to environmental changes, learn new
skills and technologies more quickly, and effectively leverage its core competencies
while competing against rivals”. Dell has successfully meets all three of these criteria.
Dells direct model allows it to communicate directly with customers, which eliminates
intermediaries and provides Dell with real- time feedback and market information. This
rich information allows Dell to respond quickly to changes in consumer demand or
overall market conditions. A successful pioneer of mass customization of computer
manufacturing, Dell has quickly demonstrated its ability to learn new technologies and
successfully apply them in its manufacturing system. Dell has leveraged this core
competency to provide a low-cost, highly customized product to end users. To maintain
this strategy, Dell must be continuously adaptive and demonstrate strategic flexibility,
quickly responding to opportunities to reduce cost or increase differentiation. One
example of how Dell has managed to maintain strategic flexibility is through the tight
integration between its online e-commerce consumer-direct website and its flexible
manufacturing system. The flexible manufacturing system in itself allows Dell offer
mass customized products that exactly match customer specifications. This degree of
customization distinctly differentiates Dell from other batch-process manufacturers, but
can be a costly system to maintain. By streamlining its production procedures by
connecting consumers to warehouse assembly workers, Dell has reduced the overhead a
flexible manufacturing system can introduce, and it increases customer satisfaction as
well as opens new opportunities for new sales.
With the introduction of an online purchasing system, Dell also created Premier
Pages that integrated into corporate intranets. This innovative approach capitalized on
an already existing resource, its online system, and flexible manufacturing system, to
offer tailored hardware to corporate IT departments. In addition, as corporations choose
to integrate Premier Pages into their intranets, they essentially lock into a future of Dell
as their vendor. Dell has essentially provided an integrated toolbox