(Gitman, 2007, 21) Dell alo introduce the latet relevant technology much more quickly than companie with low-moving, indirect ditribution channel, turning over inventory every three day on average. In 1985 the company tarted aembling it own PC brand. Ever ince, Dell had achieved phenomenal growth and by 2000 had topped $25 billion in ale and over $2 billion in net income. In late 2000, however, (erwer, 2005, 63) the PC indutry' average 30-year growth rate crahed to a negative 10% due to low economy. Dell Corp. had to make difficult deciion on how to utain it profitability in light of it broad product portfolio--PC, worktation, and erver on torage product for a broad cro-ection of cutomer in the United tate and worldwide. Dell' high return to hareholder ha been the reult of a focued effort over time to balance growth with profitability and liquidity. Dell ha conitently led it larget competitor in each of thoe categorie.
The future for Dell and the ret of the computer indutry i haping up to be a fairly difficult one mainly due to the weak economy. But, Dell' economic problem are normal and hared by all companie in any indutry. What' not normal with Dell however, i it dilemma of how to maintain it leading poition over it competition and achieving ambitiou growth rate in an environment with which the economy i haped up to be wort than anticipated, due to it flat buine tructure, which make conumer kittih and pending down. Therefore, (Gitman, 2007, 21) in light of the above ituation, we believe that Dell could be facing a predicament of whether they hould maintain their trategic coure or fundamentally change it in order to achieve the targeted growth rate
Dell' fortune do look better than it rival, though. Dell Computer' trategy wa built around a number of core element: build-to-order manufacturing, ma cutomization, partnerhip with fewer upplier, jut-in-time component inventorie, direct ale, market egmentation, cutomer ervice, market ening, early integration of the Internet, low operating cot, and extenive data and information haring with both upply partner and cutomer. Through thi trategy, the company hoped to achieve what Michael Dell called "virtual integration"--a titching together of Dell' buine with it upply partner and cutomer in real time uch that all three appeared to be part of the ame organizational team. (erwer, 2005, 63)
upply Chain Efficiency: e-Buine i jut like any buine in at leat one repect: you have to maintain your edge. Whether reponding to a flood of new cutomer and product, or reducing cot while maintaining cutomer loyalty during period of economic decline, Dell believed that a more efficient upply chain would contribute ignificantly to it long-term ucce. By extending it build-to-order model all the way from material and component upplier to the cutomer, Dell could maximize both operational efficiency and cutomer atifaction while reponding immediately to change in the marketplace. The company' goal wa to integrate the upply and demand ide of the buine with the help of thi falt buine tructure in order to eliminate the guework that lead to inventory hortage and overage.
Dell hould have a tranformational model intead of it traditional model which would penetrate aggreively the High-end erver market, Joint venture with