Do you think that Dell’s model can be imitated by other PC manufacturers and manufacturers in other industries? Answer: Yes, Dell’s model can be imitated, but the managerial skills are difficult to build. Other companies who are trying to replace inventories with information include Wall-Mart, Target, Best Buy, and Circuit City. Auto manufacturers also have been making strides in this direction. Dell Case: Question 5 :: What factors might make It difficult for other PC companies to adopt Dell’s model?
Answer: The chief factor that makes It difficult for other PC firms to adopt Dell’s model has to do with managerial know-how. Knowing what to do Is simple. Knowing how to do It Is Immensely complicated. Dell Case: Question 6 : What Is the source of Dell’s competitive advantage? How secure Is this advantage? Answer: Low cost Is the source of Dell’s competitive advantage. Dell seems to be able to counter competitive challenges, which evidences management capability. This Indicates a relatively secure advantage, but because It Is Imitable, It Is not erroneously secure.
Dell case: Question 7 what are the potential risks associated with Dell’s global supply chain strategy? How can these risks be mitigated? Answer: There are many risks associated with Dell’s supply chain management. If the transportation links are disrupted (work stoppages, terrorism Dell’s approach will be affected. Also, they are vulnerable to problems their suppliers have. Dell is also vulnerable to IT issues: hacking, system failures. Their competitors would be facing the same issues, though.
The risks that need most to be mitigated are the supplier ones because they would not be shared by competitors. These can be mitigated by integration with the supplier, and Dell has integrated with the supplier’s supplier as well. Case Discussion Questions 1. What are the advantages to Dell of having manufacturing sites located where they are? What are the potential disadvantages? Answer: 2. Why does Dell purchase most of the components that go into its PC from Independent suppliers, as opposed to making more itself (Dell does little more than IANAL assembly of components into PC)? . What are the consequences for Dell’s cost structure and profitability of replacing inventories with information?