Dell Inc is an American-based international computer technology corporation that develops, designs, manufactures, sells, and repairs personal computers and various related products and services. The company's initial competitive strategy when it was incorporated in 1984 primarily focused on cost advantage and differentiation through customer knowledge advantage. Dell’s uniqueness is demonstrated by its superior profitability occasioned by knowledgeable use of information, e-commerce, communication, Just- In- Time inventory system, insourcing, web and internet technologies ( Parvez, Ullah, Sabuj, & Islam, 2018) . This paper discusses Dell's supply chain and logistics innovations and how they compare to those of its competitors and the emerging supply chain and logistics management factors negatively affecting large computer chain stores. This essay also discusses ways in which market research can prevent large computer businesses from collapsing. The paper is based on an appraisal of a short eleven-minute video titled "Your computer, your way: Dell and the direct sales model." The video elaborates on the supply chain, logistics, and strategies used by Dell and other companies to sell personal computers.
Comparison of Dell's supply chain and logistics to competitors such as the Apple Store and others
One of the initial competitive advantages of Dell can be attributed to the use of direct selling coupled with a build- to- order rather than build- to- stock inventory strategy. Dell doesn't manufacture a computer until an order is made. As a result, the company does not ail from inventory problems giving it an enormous pricing advantage. Dell carries out roughly seven to eight days of inventory turning its inventory about fifty times a year. This benefit alone gives Dell a pricing advantage between five and seven percent ( Parvez et al., 2018) . Direct sales help the company dodge intermediaries like retailers and wholesalers, lowering the expenses even further.
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On the other hand, competitors like Compaq and Apple sell their computers predominantly through retailers. They operate under build- to- stock system of inventory, resulting in inventory problems like selling at discounts in case of order cancellation or delivery complications. These companies take five to eight weeks in the inventory channel compared to Dell's seven days. When the inventory margin is added to retailer margin, Dell enjoys ten to fifteen percent price gains ( Parvez et al., 2018) .
Since its inception, Dell has been outsourcing manufacturing raw materials and assembling personal computers internally. Travelers are used to pick appropriate parts from the bin to a box that goes to the assembly area. Once the cell assembly operator has all the parts at their disposal, assembling and computer building follow. Afterward, a quick test is conducted to ensure that all units, components, and software are functional before sending the computer to the client (Rasool, Iftikhar, Nazir & Kamran, 2016). Dell outsources the raw materials but not the manufacturing operations to avoid being replicated by competitors. In contrast, its competitors preferred outsourcing the entire manufacturing operations as the strategy gives the aptitude to select suitable components and suppliers rather than the company having to develop them.
Besides, Dell enjoys a technology advantage over its competitors. The company builds its computers after receiving orders, unlike its competitors who manufacture in anticipation of orders. Consequently, Dell introduces the latest technologies faster than companies that have slow-moving stock (Rasool et al., 2016). Technology advantage has made Dell the number one retailer of Personal Computers outselling Hewlett-Packard and IBM. Also, Dell has ventured into an IT portfolio like servers, mobile placement of orders, cloud storage of orders, thus challenging printer leader HP.
Supply chain and logistics management factors that were already negatively affecting large computer chain stores
Large computer chain stores are negatively affected by various supply chain and logistics management factors, including the use of the internet, build-to-stock inventory systems, and intermediaries' engagement. Most computer manufacturers predict demand, build the machines and transport them to retailers and wholesalers. This system creates a massive problem in stock-taking and requires an investment of time and human resources. Another problem with production based on predicted demand is that when the forecast is wrong, the company is left with too much machine stock that they are forced to sell at a steep discount. What is more, computers on shelves quickly become obsolete as new, faster, and more advanced machines enter the market.
The computer stores are unable to keep at par with the virtual online stores in several areas. The online computer shops provide a satisfying shopping experience as they offer different computer models and provide a platform where customers can search, review, compare, and select machines that best suit their needs. In contrast, large physical computer stores have limited variety depending on the size of the store. Furthermore, online selling allows the manufacturer to build a customized computer following the specifications of the customer. This is unlike selling from the large stores where computers are highly-priced, and the customer is more likely to miss specifications that would cost them extra cash to add.
The presence of intermediaries is another factor negatively affecting the supply chain and logistics management of large computer chain stores. The retailers and wholesalers of computers generate profits by selling manufacturer's products at marked-up prices. Had computer manufactures not engaged these intermediaries, they would obtain more returns from their products. Continuous intermediaries' involvement may make the manufacturer lose control of the product owing to distorting of information and overemphasis of products’ benefits to increase sales and justify the high prices.
Ways in which market research can help prevent these large technology businesses from failing.
Market research is a powerful instrument for business establishments of all sizes (Babin & Zikmund, 2015) . M arket research may have helped prevent large computer businesses like IBM, Compaq, and Hewlett Packard from failing by minimizing risk and improving their business strategy from the bottom up. Initially, Michael Dell manufactured and sold computers using unique and better strategies than large computer corporations who used demand predictions to manufacture and ship computers to retailers. If the forecast failed, these companies would be stuck with large stocks resulting in dumping at low prices. These companies could use market research to assess the market size and growth to make accurate forecasts and avoid losses due to the cheap dumping of computers.
Market research could also salvage the large computer companies from falling by assessing customer needs and manufacturing computers with specifications that meet those needs. Market research could also help the companies determine whether their computer models appeal to their customer base and make modifications where needed (Babin & Zikmund, 2015) . Large computer companies like Apple can also benefit from market research by collecting competitive intelligence to discover ways of differentiating themselves from corporations manufacturing the same products. By finding out competitors' weaknesses and strengths, the computer companies can create an exemptional strong value plan.
Since its incorporation, the competitive advantages of Dell have been direct selling, building to order, and use of technology. Thus, the company does not suffer from inventory problems such as disposing of the stuck stock. Large computer chain stores are negatively affected by emerging supply chain and logistics management factors such as the internet, intermediaries, and the use of a build-to-stock inventory system. However, these companies can be rescued from falling through marketing research which provides market information competitive intelligence that could enable them to manufacture computers that match the market needs.
References
Babin, B. J., & Zikmund, W. G. (2015). Exploring marketing research . Cengage Learning.
Parvez, M., Ullah, N., Sabuj, M. A., & Islam, S. (2018). Profit Maximization of DELL Inc. through Build-to-Order Supply Chain for Laptop Manufacturing. American Journal of Industrial and Business Management , 8 (06), 1657.
Rasool, Y., Iftikhar, B., Nazir, M. N., & Kamran, H. W. (2016). Supply chain evolution and green supply chain perspective. International Journal of Economics, Commerce and Management , 4 (10), 716-724.
