Group Work

Understanding Firm as a Customer

in the perspective of Dell

Presented By: Alok Kumar Jha,

Krishan Kumar,
Pankaj Girdhar,
Nikhil Kumar,
Yogesh Pratap

10.07.2021 Group No:4

 Perspective Covered
2

 Understand the Process that how Dell rely on a network of suppliers

 How Dell added value to their offerings
 Integrated purchasing activities by Dell by managing balance between
functional areas and Outside firms
 How Dell takes final purchase decisions
 What benefit Dell got by adopting this perspective
 About Dell
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 The company, first named PC’s Limited, was founded in 1984 by American
Michael Dell, who was then a student at the University of Texas in Austin, USA
 Dell used the unique concept considering that era through bypassing the
intermediate dealer channel and selling the personal computer directly to buyer
by building the products after getting order.
 Dell has not only changed the way of doing business in selling side but also they
have innovated in purchase side of their business that gives the perspective of
Dell as a customer firm.
 Today, Dell Technologies is instrumental in changing the digital landscape the
world over that develops, sells, repairs, and supports computers and related
products and services.
 Dell as a customer Firm for Suppliers
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 Dell is having their business reach in both B2B and B2C and their success in both
the segment is mainly achieved through their ability to meet the customer’s
requirement.
 Dell enabled themselves to identify the resources and capabilities that have a
potential to create and deliver the value to their customers.
 Dell develops their suppliers through Co-Creation in research and development
for adding value to the customer.
 This also helped them to minimize the delivery time of the product in addition to
the reduction in inventory cost.
 Through cooperative relationship with suppliers, customer, Dell is able to
increase the size of value pie and that leads to give benefits to all stakeholders.
 Dell Value Network
5

Physical Flow
Information
Flow
The information flow
plays an important part
in the effective
management.
The efficient
information flow of the
supply chain, leads to
provide the effective
Market management to
Dell
Dell Supplier Network
6
 Dell Supply Chain Network
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 With a strategically innovated formula and implementation of Supply Chain value

network, Dell excluded the reseller’s/ dealers mark-up costs and associated huge working
capital required for carrying large inventories of parts as well as for final goods.

 The formula became known as the direct business model with full of integration that gave
Dell an ample competitive advantage.

 Dell focuses on supplier selection and made their process as per the industry benchmarks
that helped them to achieve maximum benefits by co-development with the suppliers.

 Dell by having the integrated purchase orientation is able to manage its direct sales model,
that helped them to achieve the negative cash conversion cycle.
Dell’s Success mantra for Supply Management Orientation
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Focus on Craft a
delivering Sourcing
Customer Value Strategy

Sustainable
highly
collaborative
Build a Supply
relationship
Network
with Suppliers
and Sub-
Suppliers
VRIO analysis of Dell’s procurement Strategy
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 Dell has sustainable competitive advantage in terms of product customization.

 Dell has a sustainable competitive advantage in terms of inventory
management, as other companies are lagging with dell in terms of inventory
cost.
 Dell has also having sustainable competitive advantage in PC industry as the
customer is able to receive the product as per their choice. For making the same
they Dell have to manage the good relationship with the supplier.
 Dell has also temporary competitive advantage in after sale services as on-site
customer support was being valued by the customer but it is also an imitable.
 Dell has sustainable competitive advantage in terms of logistics management as
the requirements of the customer is being met on very short span of time
through timely delivery.
Dell’s Long-term relational Strategy
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 Supplier assessment in Dell is compulsory

that comprises assessment of performance,
strategic, and risk assessment.

 Dell provides company-level rewards for

suppliers with excellent performance in
breakthroughs and innovations, global
strategic procurement, sustainability, and
best overall.

 Rewards may also be provided for suppliers

in a particular business unit of a Sector or a
particular field of materials.
Conclusion
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 Dell secured resources from external environment and integrated

with their internal operation.
 Dell added value in their offering by relying network of suppliers.
 Dell’s business manager is better able to craft responsive market
strategies.
 Dell is in better position to coordinate cross functional efforts
designed to deliver greater value to customer
 Dell adopted best practices of value based supply management
orientation that resulted to greater profit to firm.
Thank
you !