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¶ … Dell business model and strategy is one of the best strategies that can be employed by various organizations for them achieve their set goals and business objectives (Hall, 2000). In this paper we describe how the auto industry might work differently if it were designed in accordance with the Dell Model.
The Dell model
The Dell Model (Hall,2000,p.6).
The strategy comprises of three main components namely the best direct customer experience, virtual integration as well as low cost provider. In the Dell Model, the company occupies the Original Equipment Manufacturer (OEM) space between the suppliers and customers.
The best direct customer experience
One of the strategies that are employed by Dell is the provision of the best direct customer experience that they can have with machines (computers) as a tool. This involves the obtaining of these computers, using them as well as servicing them appropriately. This stage involves no intermediaries whatsoever. The company therefore interacts with the clients directly. This allows the company to directly learn its clients likes and dislikes. This strategy can be replicated in the auto industry through the direct sale of products via a direct channel. The auto manufacturers just like Dell would need to keep a record of all of the vehicles as well as their customization details. These vehicles should therefore be manufactured...
Elements of auto design, logistics, product build as well as test must be considered at this stage. The aim is to enhance customer experience.
Low cost provider
Low cost is indicated by Hall (2000) to be a prerequisite in staying successful in any business.
Virtual integration strategy
Comparing Ford and Dell Model
The auto industry would indeed run differently if it applied the Dell model as indicated below. The Ford Motor case is used to illustrate this.
Ford had a number of projects underway that were meant to position the company advantageously for success in incorporating with the expanding enterprise that also consisted of suppliers and consumers. In addition, there were chronological factors that would have to be taken into consideration in many virtual integration stratagem.
The present supply base was in many respects a product of history. As the firm had grown over the years, so did the supply base, to an extent where in the late 1980s there were numerous suppliers of production materials in an intricate network of business affiliations. Suppliers were chosen primarily on the basis of cost, and little consideration was paid to overall supply chain costs, including the intricacy of dealing with such huge network of suppliers.
Starting in the early…
References
Hall, RW (2000). Distributed Excellence and the Dell Model. Target Volume 16 (2)
Kraemer, KL and Dedrick, J (2002): "Dell Computer: Organization of a Global Production Network," Center for Research on Information Technology and Organizations, 2002.
Kraemer, KL.,Dedrick, J ., Yamashiro, S (2002). Refining and Extending the Business Model With Information Technology: Dell Computer Corporation
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