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Dell Company Essay

Since its foundation in 1984, when Michael Dell started selling PCs from his college dorm, the DELL Computer company has grown into one of the top PC sellers in most of the 170 markets in which it competes. Dell created an innovative enterprise with a different organizational structure. The organization of Dell is an interfirm network that relies on the external capabilities of other firms. Without the technological expertise of firms outside the boundaries of Dell that supply the PC maker with virtually all of the components for PC production, Dell would not be in business.

Consequently, Dell’s interfirm organization is built around a far more circumscribed set of core competencies, namely the assembly process, and the logistics of procurement, production, and distribution. How is Dell Company Functions It’s direct-sell model contains a business process improvement that permits Dell to not only sell PCs cheaper to customers but also achieve extremely low levels of working capital and high levels of asset turnover.

Dell focuses relentlessly on cost efficiencies and operating margin, so that profitability is not sacrificed as higher sales volumes are pursued. Continuous improvement on these dimensions is the norm. The company believes in accountability and employees questioning everything and challenging

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their bosses (Argenti 2002). Advantages of Dell Organizational Structure There are further price options for premium customers: discounts when Dell has production capacity free or for customers who order early.

Dell also has different prices for private customers, corporate clients, premium customers and government agencies, a complex pricing system established on the basis of information and prognoses concerning the customer’s past and future requirements and the most popular configurations. The advantage for Dell is an improved financial structure for the company. Dell customers pay before Dell has to pay its suppliers, Dell can use the cash flow to finance other business areas instead of having to generate floating capital. What are the drawbacks.

The drawbacks of doing final assembly in a large number of uniload sites created a wide range of problems, including inventory problems, economic scale problem, and lack of competent talent to run the operations. Main Issues In order to resolve customer issues, Longer-than-necessary training time for new customer service representatives, and high levels of consultation required between customer service representatives. In this business, like most service businesses, the ability to retain customers is extremely important.

Getting a new customer costs a company several times as much as it costs them to retain one, and customer retention is the primary purpose of the Customer Service organization. To focus on systems to the exclusion of the processes they enable is truly looking through the wrong end of the telescope. That’s why companies like Dell have worked so hard to develop and deploy scripted expert systems that all of their customer service representatives use to diagnose and resolve customer problems when they call in.

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