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Week 8 Assignment 3

A strategy is a method used to achieve a certain objective. Any business organization has strategies that they use to achieve their objectives and visions. This discussion aims at focusing on the different strategies that Dell Company uses in order its objectives. There are three forms of strategies that business, company or organization should consider. The corporate level strategy helps in answering the fundamental question of what the company wants to achieve. The business level strategies are those methods that a company uses to ensure they have a competitive advantage over other companies. Finally, the market level strategies are the methods used to ensure the growth of the company. Therefore, it is clear that these strategies help in the cycle of a business, from the point of starting the business to the achievement of the goals (P Ghemawat, 2010). With this description, we will take an in-depth look at the strategies used in Dell Company.

Business level strategies

These are the strategies that a company uses in order to gain a competitive advantage over other companies. There are different business strategies that different companies use to ensure competition, for instance, differentiation of products, low prices on products, cost leadership. Companies may also use focus strategies by only concentrating their productions on a specific group of people. The use of an Information system (IS) strategy and the Information technology (IT) strategy in Dell Company is undeniably effective in ensuring competitive advantage. IS strategy is concerned with supporting the current business strategy and also ensuring new in methods in the IT system s are implemented.

On the other hand, the IT strategy is basically the foundation for all activities in the Company. This is because almost all activities are technologically operated, from machines to computers and so forth. The use of IS and IT strategies in Dell company has led to a significant increase in the business processes especially in the automotive department where all activities are controlled by machines (Michael Dell, 2010). This strategy has also aided in the manufacturing of computer-aided designs which help in designing of products. This ensures the quality of products. Subsequently, the IS-IT strategy plays a big role in supporting the activities of adding value to the products, which also ensures quality. Apart from the IS-IT strategy, Dell Company ensures that the suppliers of their products are close to their manufacturing company. This reduces costs by avoiding transportation. It also ensures that the products are delivered on time because the distance from the manufacturing company and the outlets is reduced.

The above strategies used by Dell Company help in ensuring a competitive advantage. This is because; the IS-IT system enhances activities that improve the quality of the products. High-quality products enhance competition. It also ensures that these activities are done faster. Ensuring that suppliers are close to the manufacturing plant ensures that customers’ needs and demands are met effectively without unnecessary delays (Schwießelmann, 2010).

However, from a personal view, the focus strategy would be of essence to this company. If it focuses on specific products for a specific group of people, it will enhance competitive advantage. This is because the electronic industry has really grown and each company is focused on the same electronics. The emergence of smartphones and tablets has also led to stiff competition in the computer world since most people use tablets and smartphones. Therefore, to avoid this, Dell Company should apply a focused strategy and it will most definitely work since the brand name is already established.

Corporate level strategies

These are the strategies that a company uses based on what businesses they should compete in, and they affect the whole organizational structure (Hiriyappa, 2015). Dell as accompanying focuses on the whole process of production, manufacturing, and selling of its computer and electronics without the involvement of other parties. It has always ensured a direct relationship with its customers. Following recent overloading of the computer industry, Dell has sought to apply a new strategy. They are looking for smaller companies for purposes of acquisition. In addition to this, they are seeking for fast-growing companies that are not in the computer industry. This means that they may focus on completely different products. Acquisitions will most definitely affect the whole organizational structure, and the decision for using this strategy came from the top management. Thus, their main corporate strategy is the business diversification strategy.

From my own view, Dell Company could use the business stability strategy. This strategy is applied to the existing market conditions to ensure the maintenance of the market share. This could be through actions that ensure reduced cost on materials which will, in turn, lead to reduced cost in production. It could be effective through maintaining customer relations to keep the existing customers. The main reason for supporting this is because Dell is already a big company with an established brand name. Therefore it is easier for it to ensure stability during the economic recessions. Also, it has a history of ensuring personalized relationships with their clients; therefore, it would be easy for them to maintain their customers. With this, they will be able to achieve their optimal goals.

Competitive Environment

In describing a competitive environment, Andrew Hoffman, a professor in management in the University of Boston stated that, “in such an economy, there is one and only one social responsibility of business, to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud (Hoffman, 2000, p. 127).” Dell Company was begun in 1984 by Michael Dell as a technology-based company. Being among the top leading companies in the computer and Personal Computers producers, it has encountered stiff competition from other top-selling companies. Such companies include Apple which tops on the list and Acer and HP which can be rated on the same level as Dell.

Dell gets its competitive advantage from various factors. The direct model is the main cause of competitive advantage. Customers are able to customize their products from the direct relationship and service they get from Dell Company. With the fast evolution of technology, customers want their devices to be up to date. Therefore, Dell Company allows for this service which is not offered in other organizations. Also, this direct model has ensured faster delivery and this enhances good customer relations (Donald P. Cushman, 2012, p. 26). This is because; customers get their ordered products after a very short time. Dell is a big company which engages in business with other big companies. This ensures a large amount of income. This adds up as a competitive advantage because the company is guaranteed of great revenues as it maintains these big company connections.

However, there are some weaknesses that make it for Dell Company to have a competitive advantage. The major one is the fact that Dell Company does not target the student market. It has only focused on big companies and failed to capture the students, which is a big part of the market of computers. This is mainly attributed to the fact that Dell Company has not ensured good relations with educational institutions. In addition to this; Dell does not have retail shops. Therefore, in order for a customer to get a Dell product, he has to travel all the way to the supplier. This becomes a bit inconveniencing for the customers.

Looking at Apple Company as the main competitor to Dell, we see that it has a competitive advantage over Dell Company. First of all, Apple has a very strong brand name. This brand name is associated with the uniqueness of Apple products which use the same applications and software, thus making it easier to use. Secondly, it is globally known that Apple products are of very high quality. Apple has managed to be innovative with its products, maintain the same software and applications. This has not been experienced by other companies. The use of the same applications and software has helped in reducing risks associated with new applications and software; hence the cost of production reduces. Finally, the Apple Company has managed to have an integrated system of the supply chain. The company has a wide range of product manufacturers from chip manufacturers to system developers (B.WertherJr.c, 2013). This makes it hard for other companies to outdo them.

Analyzing the two companies, it is very evident that Apple Company will be the most successful in the long run. This is because its business and corporate strategies are way much higher than Dell's strategies. In order to meet up with Apple’s competition level, Dell will have to invest a lot of resources to be at per with Apple Company. Also, Apple Company is where it is now because of its strategies; hence these strategies will still be effective even in the long run.

Market Cycles

Slow market cycles are whereby a competitive advantage is secured through prevention of imitation from other companies with costs of imitation being very high. On the other hand, fast-cycle markets are whereby competitive advantage of a company is not secured hence cases of imitation may occur since costs involved in imitation are not high (Graeme Chamberlin, 2006).

Therefore based on the conclusion that Apple Company will most likely survive in the long term, it will survive for both cycles. The strategies used by Apple Company are way beyond imitation. We have clearly seen that Apple Company has a competitive advantage due to the brand name, production technique, the innovation levels and the system of the supply chain. In the case of fast-cycle markets, trying to imitate Apple products will definitely lead to failure since the quality will not be the same. In fact, many companies have tried to invent products similar to Apple’s but when it comes to selling, they experience a fail since Apple products are expensive yet globally accepted by customers. This leads to a total flop of the counterfeiting company. Therefore, if Apple can survive in fast-cycle markets, it will in slow-cycle markets.

Sources

B.WertherJr.c, E. d. (2013). Resilience: Continuous renewal of competitive advantages. Business Horizons.

Donald P. Cushman, S. S. (2012). Communication Best Practices at Dell, General Electric, Microsoft, and Monsanto. SUNY Press.

Graeme Chamberlin, L. Y.-C. (2006). Macroeconomics. Cengage Learning EMEA.

Hiriyappa, B. (2015). Corporate Strategy. B Hiriyappa.

Hoffman, A. J. (2000). Competitive Environmental Strategy: A Guide To The Changing Business Landscape. Island Press.

Michael Dell, C. F. (2010). Direct From Dell: Strategies that Revolutionized an Industry. HarperCollins e-books.

P Ghemawat, B. C. (2010). Strategy and the business landscape.

Schwießelmann, J. (2010). Dell: Can Rivals Beat Its Strategy? GRIN Verlag.