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Report on compare and contrasts approaches to operations management at dell and tesco

References Introduction Dell was founded in 1984 by Michael Dell on a simple concept: Its corporate headquarters are located in Round Rock, Texas, and it conduct operations worldwide through subsidiaries. Nowadays they are expanding that core strategy by adding new distribution channels to reach even more commercial customers and individual consumers not only in the USA but around the world.

Recently, company also has begun to pursue a targeted acquisition strategy designed to augment select areas of its business with more products, services, and technology.

But what pursued Dell to change its strategy and to reevaluate its direct model? In 2007 and 2008 Dell was listed in a Scoreboard: Because of its size and an absence of an innovative product like the iPhone, it is a challenge for Dell to drive revenue growth in a meaningful way.

In order to be able to return its market share and high rates of growth Dell has to reshape its strategy and reevaluate its goals according to the new trends in IT market. Strategy analysis Today the computer industry is arguably the most important industry in the world. As a tool the computer is a crucial element in many industries ranging from telecommunications and consumer electronics to medical research and automobiles.

  • In 1990s Dell really has a strong competitive advantage with its built-to-order approach because of cost reduction as a result of low inventory but no more;
  • Also the price differences between the United States and other regions have declined;
  • Every highly technological and innovative industry has rapidly changing trends and structure and the computer industry one of those who requires from companies always to be in touch with the latest technologies and movements;
  • The HP strategy focuses on cost savings in any phase of global operations, and this persistent review of operations has also fostered production efficiencies and better development of products to suit customer needs.

In the first quarter of 2008 Worldwide PC shipments grew by 14. But today computer industry looks not like 20 years ago. Every highly technological and innovative industry has rapidly changing trends and structure and the computer industry one of those who requires from companies always to be in touch with the latest technologies and movements. But nowadays Dell and other U. The main reasons are continued price downturn and performance gains in key components as a result expanding demand for PCs.

It is very important for Dell to take into consideration the increasing significance of individual consumers since mostly it was oriented more on commercial customers and government. Portable devices laptops and notebooks are the fastest growing form factor, totaling 32 percent of unit demand in 2005 compared to just 10 percent in 1990, and are expected to exceed desktops Figure 4 [9].

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As it was written in IDC press release "Notebook purchases are driving consumers beyond one PC per household to one PC per person and manufacturers are reacting by focusing their attention on customization and personalization.

In the first 25 years of the computer industry the unit sales were counted in thousands for mainframes and then in hundreds of thousands for minicomputers Table 1 [10]. Today the Internet and the applications based on it have become the main driving force for the PC and the whole computer industry.

In addition the core personal computing industry includes not only traditional desktop and laptop PCs and PC servers but also smart handheld devices such as personal digital assistants PDAs and smart phones which will augment PCs as Internet access devices in the next decade.

Also there are such new trends in information technology industry as on-demand computing when firms purchase additional processing power from large computer service firms and have that power delivered when they need it over a network [7].

  • But what pursued Dell to change its strategy and to reevaluate its direct model?
  • Its factories in north Austin and Nashville are the only major computer-assembly plant still located in the United States;
  • Nowadays they are expanding that core strategy by adding new distribution channels to reach even more commercial customers and individual consumers not only in the USA but around the world;
  • In the first quarter of 2008 Worldwide PC shipments grew by 14;
  • In order to define why operations management is needed in an organisation knowledge of operations management is required strategic management research essay - tesco the report below provides an insight into the supermarket company tesco, with emphasis on the company's internal analysis of.

Server virtualization enables companies to run more than one operating system at the same time. It can be a challenge for Dell to be the first in these new trends and also to be aware of global architectural standards set originally by IBM and now largely controlled by Microsoft and Intel.

For example, Dell started offering Linux notebook systems and soon it became the first major manufacturer which offers Linux across its full product line. However, by early 2001 Dell had disbanded its Linux business unit. There were clear signs that that Microsoft pressured Dell Inc.

Computers-in-Use Driving Forces illustration not visible in this excerpt Source: Very important issue for Dell is a continuous price war in a highly competitive PC market. When adjusted for quality improvements this price decline is even much more dramatic. Also the price differences between the United States and other regions have declined. Gartner indicated that even the popularity of mini-notebooks today will not be enough to prevent the PC market from suffering in the current economic climate over the next 2009 year.

This in turn will force a deeper price war and further consolidation in the marketplace.

Analysis of Dell’s Business Strategy

As a result there still always will be a main concern with cost reduction and business processes improvement in PC market. In 1990s Dell really has a strong competitive advantage with its built-to-order approach because of cost reduction as a result of low inventory but no more. In 2005 HP had hired Randy Mott, Dell's former chief information officer which helped it to improve its direct sales model to compete with Dell.

In addition, the U. In 1980 the U. In 2000 the U.

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Nowadays Asia-Pacific region has even more computers-in-use than Northern America [10]. Worldwide the indirect channel accounts for two-thirds of sales, and the dealer segment is larger than retail. And the retail exhibits many different local patterns as a result of local consumer preferences, government regulations and differences in historical evolution.

  • Its factories in north Austin and Nashville are the only major computer-assembly plant still located in the United States;
  • As it was written in IDC press release "Notebook purchases are driving consumers beyond one PC per household to one PC per person and manufacturers are reacting by focusing their attention on customization and personalization.

This local complexity makes it difficult for branded PC makers to become global market makers. As a result of the increasing share in global market sales, Dell was forced to adjust their distribution models to fit local markets and to work with big retailers. In 2007 and 2008, the company partnered with Gome, China's largest consumer electronics retailer, DSG International, one of Europe's major consumer electronics retailers, and Tesco, an international retailer with operations in Europe and Asia which will allow Dell to sell its products to millions of in-store computer buyers [12].

In the same month, Dell opened its first exclusive retail store offering in Russia. Since one of the main problems of the last years of PC makers was cost reduction there was a shift in the location of production from the Americas and EMEA to the Asia-Pacific region [5]. Initially, production was spread throughout East Asia in Japan, Malaysia, Singapore, Taiwan, and Korea but by 2005 China was the single largest producer of PCs and computer equipment in the world.

In contrast to many of its competitors, Dell still owns several production facilities in the USA. Its factories in north Austin and Nashville are the only major computer-assembly plant still located in the United States.

This could be seen as an expensive race to the bottom that no PC vendor or component supplier really wins. Some PC vendors complain that component innovation is too fast, and they feel pressured to introduce too many products for too small markets. The main issue for the report on compare and contrasts approaches to operations management at dell and tesco years seems to be whether the cost of managing so many products might outweigh the benefits of being able to offer products that more closely match the needs of customers.

Most of them have the similar strategy and products as Dell. The problem is that Dell's far removed from the days when its manufacturing and distribution system was the significant competitive advantage. Hewlett-Packard, now the world's largest PC maker, has a relatively lean cost structure while pushing his sales force to ring up bigger sales numbers. The HP strategy focuses on cost savings in any phase of global operations, and this persistent review of operations has also fostered production efficiencies and better development of products to suit customer needs.