...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing the time required...
Words: 3030 - Pages: 13
...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing...
Words: 3030 - Pages: 13
...A Direct Threat to the Status Quo An Analysis of the PC Industry and Dell, Inc. I. Personal Computer Industry Summary a. Industry Profile b. Typical Industry Competitive Strategy c. Porter Model Evaluation d. Globalization of the Industry e. Importance of I/T to the Industry II. Dell, Inc. a. Dell Company Profile b. Market and Financial Performance c. Competitive Strategy Statement d. Significance of Information Systems e. Strengths and Weaknesses of Dell, Inc. III. Structured Analysis of Information Systems Use a. Strategic Option Generator b. Roles, Roles and Relationships c. Redefine/Define d. Significance of Telecommunications e. Success Factor Profile IV Final Analysis a. Success of Business Strategy and I/T Use to Date b. Have the Above factors Positioned Dell for the Future? Objective of this paper A thorough analysis of the PC Industry yields a unique look at the most dynamic market arena in the last 25 years. This analysis paper seeks to offer just that: an in depth view of what it takes to succeed in this marketplace. While focusing on the international end-user and corporate markets, important topics such as threats, tactics, and future trends of the core market players will be scrutinized. Further, we offer an in-depth look at how Dell Inc., one of the market’s most successful players, deals with these threats and competition...
Words: 13166 - Pages: 53
...management principals and philosophies we think make Dell a success. Finally, we describe Dell using the lens of a Zero Time organization. Company Background Many know the story of Michael Dell, his college-based business of building personal computers with available parts, and his build to order strategy. Founded in 1984 as PC’s Limited, the name was officially changed worldwide to Dell Computer Corporation when the first stock offering took place, in June 1988. Other key turning points, according to Michael Dell, were in 1986, when Dell first went outside the US to Europe and hit $50 million in sales; 1989, when the company when from last to first place in their industry on the management of their inventory; and 1993 when the concept of segmenting took shape and allowed the management to regain control of customers. At the core of Dell’s business was the build-to-order strategy. Customers ordered PCs directly, and their order was routed through a credit check, then directly to the manufacturing floor. The order was then built, tested, and shipped to the customer, who received it 5-7 days after placing their order. This strategy afforded Dell some impressive...
Words: 9948 - Pages: 40
...GRADUATE SCHOOL OF BUSINESS STANFORD UNIVERSITY CASE NUMBER: EC-17 November 2000 DELL DIRECT1 In 1995, a manager from a leading Japanese computer company was recounting his company’s plans to conquer the US Personal Computer (PC) market: “We have a strong brand name in consumer electronics, and what’s most important, we build many of the components that are needed in the PC ourselves: monitors, audio equipment, CD-ROM, DRAM, and so on. This will give us a tremendous advantage over American competitors, who have to buy everything outside” [1]. Several years later, it looks like the competitive weapon of this and other Japanese electronics giants had misfired. Hitachi, Sony and Fujitsu have spent vast resources trying to crack the US PC market, but had only captured a marginal share—and they had lost money doing it. At the same time, Texas-based Dell Computer Corporation, founded by 19-year-old Michael Dell in a university dormitory room, was growing rapidly, sustaining a much larger portion of the PC market than all Japanese vendors combined. And while the Japanese PC manufacturers were unable to earn any money in the US market, Dell, which produces no PC components, was highly profitable, grew by more than 50% each year over the 1995-1998 period, and saw its stock grow about 30,000% in a decade (see Exhibit 1 for Dell financial summary). Dell does not manufacture any components, but it can produce custom-built PCs in a matter of hours. How does Dell do it? Why did it succeed...
Words: 9040 - Pages: 37
...GRADUATE SCHOOL OF BUSINESS STANFORD UNIVERSITY CASE NUMBER: EC-17 November 2000 DELL DIRECT1 In 1995, a manager from a leading Japanese computer company was recounting his company’s plans to conquer the US Personal Computer (PC) market: “We have a strong brand name in consumer electronics, and what’s most important, we build many of the components that are needed in the PC ourselves: monitors, audio equipment, CD-ROM, DRAM, and so on. This will give us a tremendous advantage over American competitors, who have to buy everything outside” [1]. Several years later, it looks like the competitive weapon of this and other Japanese electronics giants had misfired. Hitachi, Sony and Fujitsu have spent vast resources trying to crack the US PC market, but had only captured a marginal share—and they had lost money doing it. At the same time, Texas-based Dell Computer Corporation, founded by 19-year-old Michael Dell in a university dormitory room, was growing rapidly, sustaining a much larger portion of the PC market than all Japanese vendors combined. And while the Japanese PC manufacturers were unable to earn any money in the US market, Dell, which produces no PC components, was highly profitable, grew by more than 50% each year over the 1995-1998 period, and saw its stock grow about 30,000% in a decade (see Exhibit 1 for Dell financial summary). Dell does not manufacture any components, but it can produce custom-built PCs in a matter of hours. How does Dell do it? Why did it succeed...
Words: 9040 - Pages: 37
...Century Supply Chain Managing the modern supply chain is a job that involves specialists in manufacturing, purchasing, and distribution, of course. But today it is also vital to the work of chief financial officers, chief information officers, operations and customer service executives, and certainly chief executives. Changes in supply chain management have been truly revolutionary, and the pace of progress shows no sign of moderating. In our increasingly interconnected and interdependent global economy, the process of delivering supplies and finished goods (and information and other business services) from one place to another is accomplished by means of mind-boggling technological innovations, clever new applications of old ideas, seemingly magical mathematics, powerful software, and old-fashioned concrete, steel, and muscle. An end-to-end, top-to-bottom transformation of the twenty-first-century supply chain is shaping the agenda for senior managers now and will continue to do so for years to come. With this special series of articles, Harvard Business Review examines how corporations’ strategies and structures are changing and how those changes are manifest in their supply chains. The Articles The Triple-A Supply Chain by Hau L. Lee October 2004 The best supply chains aren’t just fast and cost-effective. They are also agile and adaptable, and they ensure that all their companies’ interests stay aligned. Reprint R0410F; OnPoint 8096 Leading a Supply Chain Turnaround ...
Words: 4558 - Pages: 19
...turns the rules of supply chain management on their head. The result? A superresponsive network and profit margins that are the envy of the industry. Rapid-Fire Fulfillment by Kasra Ferdows, Michael A. Lewis, and Jose A.D. Machuca Reprint R0411G HBR Spotlight The 21st Century Supply Chain Managing the modern supply chain is a job that involves specialists in manufacturing, purchasing, and distribution, of course. But today it is also vital to the work of chief financial officers, chief information officers, operations and customer service executives, and certainly chief executives. Changes in supply chain management have been truly revolutionary, and the pace of progress shows no sign of moderating. In our increasingly interconnected and interdependent global economy, the process of delivering supplies and finished goods (and information and other business services) from one place to another is accomplished by means of mind-boggling technological innovations, clever new applications of old ideas, seemingly magical mathematics, powerful software, and old-fashioned concrete, steel, and muscle. An end-to-end, top-to-bottom transformation of the twenty-first-century supply chain is shaping the agenda for senior managers now and will continue to do so for years to come. With this special series of articles, Harvard Business Review examines how corporations’ strategies and structures are changing and how those changes are manifest in their supply chains. The Articles ...
Words: 4607 - Pages: 19
...proyectos empresariales(PDGPE) Vocal:Francesc Tiñena Salvañà Compresion de datos e imagen (CDI) Secretari:Jose M. Cabré Garcia Empresa y entorno economico(EEE) QUALIFICACIÓ Qualificació numèrica: Qualificació descriptiva: Data: INDEX CHAPTER 1: INTRODUCTION CHAPTER 2: VERTICAL INTEGRATION 2.1. VERTICAL INTEGRATION 2.2: THE THREE A’S OF A SUPPLY CHAIN EXCELLENCE 2.2.1: AGILITY 2.2.2: ADAPTABILITY 2.2.3: ALIGNMENT 2.3: PORTER’S ANALYSIS 2.4: EXAMPLES: WAL-MART AND DELL CHAPTER 3: THE SYSTEM LOCK-IN 3.1 THE DELTA MODEL 3.2: THE SYSTEM LOCK-IN 3.3: EXAMPLE: FORD MOTOR CO 3.3.1: FORD MOTOR CO LOCK-IN CHAPTER 4 : ZARA 4.1 ZARA’S HISTORY 4.2 BUSINESS MODEL 4.2.1: PORTER’S ANALYSIS ON ZARA 4.2.2 PRODUCT LIFE CYCLE CURVE 7 9 9 13 15 16 17 19 30 36 36 39 41 42 45 45 47 47 49 1 4.2.3: KEY FACTORS OF SUCCESS 4.2.4: STRATEGIC DRAWBACKS 4.2.5: LOGISTICS AND SUPPLY CHAIN 4.2.6: STRATEGY 4.2.7: OPPORTUNITIES 4.3 THE MATHEMATICAL MODEL 4.4 FINANCIAL DATA 4.5 COMPETITORS CHAPTER 5 : BENETTON 5.1 BENETTON’S HISTORY 5.2 BUSINESS MODEL 5.2.1: STRENGHTS 5.2.2: WEAKNESSES 5.2.3:PARTNERSHIP 5.2.4: INTEGRATION 5.2.5: SUPPLY CHAIN HISTORY 5.2.6: NETWORKED MANUFACTURING 5.2.7: POSTPONEMENT IN DYEING 5.3: INFORMATION SYSTEM 5.3.1: THE SHOP 2 50 51 54 59 65 66 71 73 76 76 83 83 84 88 90 91 93 94 96 99 5.4: FINANCIAL DATA...
Words: 43564 - Pages: 175
...G. Carr As information technology’s power and ubiquity have grown, its strategic importance has diminished. The way you approach IT investment and management will need to change dramatically. I n 1968, a young Intel engineer named Ted Hoff found a way to put the circuits necessary for computer processing onto a tiny piece of silicon. His invention of the microprocessor spurred a series of technological breakthroughs – desktop computers, local and wide area networks, enterprise software, and the Internet – that have transformed the business world. Today, no one would dispute that information technology has become the backbone of commerce. It underpins the operations of individual companies, ties together far-flung supply chains, and, increasingly, links businesses to the customers they serve. Hardly a dollar or a euro changes hands anymore without the aid of computer systems. As IT’s power and presence have expanded, companies have come to view it as a resource ever more critical to their...
Words: 6022 - Pages: 25
...transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording, or otherwise), without the prior permission of the publisher. Requests for permission should be directed to permissions@hbsp.harvard.edu, or mailed to Permissions, Harvard Business School Publishing, 60 Harvard Way, Boston, Massachusetts 02163. ISBN: 978-1-4221-6059-6 By his example, Arthur Rosin, my uncle, taught me the pleasures of understanding and explaining. This book is dedicated to him, to Betty Rosin, and to my parents, Cyrille and Eugene Gorin. Contents Copyright Acknowledgments Introduction Part One: What Is Competition? 1. Competition: The Right Mind-Set 2. The Five Forces: Competing for Profits 3. Competitive Advantage: The Value Chain and Your P&L Part Two: What Is Strategy? 4. Creating Value: The Core 5. Trade-offs: The Linchpin 6. Fit: The Amplifier 7. Continuity: The Enabler Epilogue: A Short List of Implications FAQs: An Interview with Michael Porter A Porter Glossary: Key Concepts Chapter Notes and Sources About the Author Acknowledgments The Michael Porter I know is first and foremost a gifted teacher. If this book succeeds in helping readers understand Porter’s ideas in their full richness, it is thanks in large measure to his encouragement, his guidance, and his patience in explaining those ideas to me. As this book progressed, he carefully reviewed every chapter, giving generously both his time and his laser-sharp attention. The company examples I have...
Words: 59071 - Pages: 237
...– II S T R A T E G Y – II S T R A T E G Y – II www.ibscdc.org 1 Transformation Corporate Transformation Korean Air: Chairman/CEO Yang-Ho Cho’s Radical Transformation A series of fatal accidents, coupled with operational inefficiencies snowballed Korean Air into troubled times. Then, at the beginning of the 21st century, its CEO/ Chairman, Yang-Ho Cho undertook various transformation initiatives - for instance, improving service quality and safety standards, technology integration, upgrading pilot training, better business focus; putting in place a professional management team, improving corporate image through sponsorship marketing, etc. He gave a new corporate direction in the form of '10,10,10' goal. However, Korean Air is held up by a slew of challenges. Among which are inefficiencies of - Chaebol system of management, possible clash of its cargo business with its own shipping company, limited focus on the domestic market and growing competition from LCCs. How would Korean Air manage growth as a family-owned conglomerate? The case offers enriching scope for analysing a family business’s turnaround strategies, with all the legacy costs involved. Pedagogical Objectives • To discuss the (operational) dynamics of Korean Chaebols - their influence/ effects on the country’s industrial sector and the economy as a whole • To analyse how family-owned businesses manage the transition phase - from a supplier-driven economy to a demanddriven economy • To identify all the...
Words: 71150 - Pages: 285
...ACKNOWLEDGEMENT Firstly, we would like to express our greatest appreciation to Allah for His love and blessings upon us. Secondly, we would like to express our sincere appreciation to Sir Ahmad Suhaimi for his guidance and advice in making sure our research project is completed within the timeframe. We would also like to thank him for all his support and patience in supervising. Our work, which greatly motivated us throughout the completion of the research project . Thank you so much. Lastly, we would also like to thank our parents, as well as our fellow friends , for their constant support and encouragement throughout our studies at KLMUC. The research project would not have been possible done without the care and concern shown. We would also like to dedicate our appreciation to Malaysian Government for PTPTN and MARA financial aid, which has helped us with the funding and support necessary to study. Introduction of Internet and E-commerce History of the Internet began with the development of computers in the 1950s. Point-to-point communication between mainframe computers and terminals was the beginning. Since then, the development of Internet had grown in alignment with the rapid development of computers1. E-commerce emerged during the 1990s when Internet was opened to commercial use and in 2000; E-commerce became a hit in United States and Western European where a great number of businesses represented their products or services in the World Wide Web2, promoting...
Words: 7991 - Pages: 32
...the Organization 1. Information Technology in the Digital Economy 2. Information Technologies: Concepts and Management 3. Strategic Information Systems for Competitive Advantage CHAPTER Strategic Information Systems for Competitive Advantage Rosenbluth International: Competing in the Digital Economy 3.1 Strategic Advantage and Information Technology 3.2 Porter’s Competitive Forces Model and Strategies 3.3 Porter’s Value Chain Model 3.4 Interorganizational Strategic Information Systems 3.5 A Framework for Global Competition 3.6 Strategic Information Systems: Examples and Analysis 3.7 Implementing and Sustaining SIS Minicases: (1) Cisco Systems/ (2) Aeronautica Civil 89 LEARNING OBJECTIVES 3 After studying this chapter, you will be able to: Describe strategic information systems (SISs) and explain their advantages. Describe Porter’s competitive forces model and how information technology helps companies improve their competitive positions. Describe 12 strategies companies can use to achieve competitive advantage in their industry. Describe Porter’s value chain model and its relationship to information technology. Describe how linking information systems across organizations helps companies achieve competitive advantage. Describe global competition and global business drivers. Describe representative SISs and the advantage they provide to organizations. Discuss the challenges associated with sustaining competitive advantage. ROSENBLUTH INTERNATIONAL: COMPETING IN THE DIGITAL...
Words: 18939 - Pages: 76
...Core Capabilities The Sand Cone Model Quality Market Evolution Outsourcing and Offshoring Performance Frontiers and Improvement Trajectories Functionality Generating New Market Ideas Business Strategy Disruptive Technologies Business and Product Strategies Commercialization Operations and Global Competitiveness Strategy Implementation The Balanced Scorecard Transformation Process Characteristics Example Lean Management Dependability and Speed Cost and Productivity Strategy maps Supply Chain Management Customization Stages of Operational Effectiveness The Aggregate Project Plan Shaded headings indicate especially timely topics. 21 CH A P T E R IN PERSPECTIVE This chapter describes the critical role of operations to the global competitiveness of the organization. We start the discussion with a review of global trends in the economy, the evolution of international markets and products, and the impact of operations on competitiveness and the global supply chain. Next we describe the process of formulating and implementing the busi- I ness strategy, including the role of outsourcing and offshoring. Following this, we describe five strategic frameworks available to businesses as underpinnings for their strategy, and then close the chapter with a description of those operations factors that are critical to offering value to the customer. NTRODUCTION 22 • ...
Words: 22833 - Pages: 92
