Dell, Inc. process strategy and distribution strategy essay
The purpose of this paper is to analyze Dell, Inc. process strategy and distribution strategy. There are four basic process strategies: process focus, repetitive focus, product focus and mass customization (Daft & Lane, 2009). Dell, Inc. uses a mass customization process strategy, since it performs high-volume and high-variety sales, offers large quantity of products. Dell’s strategy is based on build-on-order principle, when PC components are manufactures, and the device (PC, laptop, netbook, etc.) is then assembled on order of the customer. There is a variety of assembly types, which also falls into the scope of mass customization strategy. Also, Dell’s equipment and production lines are flexible, and are customized to match the buyers’ needs.
In addition to high customization, Dell, Inc. also focuses on direct distribution channels: one of Dell’s main keys to success is the quick delivery time and inventory optimization. In fact, it was stated that Dell “uses information instead of inventory” (McIvor, 2010). Currently, Dell also forms strategic partnerships with major retailers; however, it makes agreements and limitations on price variation in order for these partnerships not to hard direct distribution and e-commerce. Dell also manages to integrate online sales into its distribution strategy.
Headquarters of Dell, Inc. is situated in Round Rock, in Texas, USA. Dell has separate distribution centers in many countries, and its suppliers are also located worldwide. Dell uses logistics outsourcing in order to reduce delivery time and optimize distribution (Inkpen & Ramaswany, 2006). Thus, in general, the location of the main distribution center is not so important since the whole company is effectively managed, and distribution lines are optimized in every country. However, Dell is one of leading PC manufacturers within US, and US segment comprises the largest part of Dell revenues. Thus, the location of Dell headquarters in USA is quite successful from this point of view. In future, it is likely that the integration of the whole company will become even more tight, and the location of the major distribution center will have even less impact on the company than it has now.
