How can Dell improve the value delivered to its customers
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Summary of the Assignment The organization chosen for the purpose of this assignment is 'Dell Computer Corporation. Dell with its Direct-to-Customer business model is unique in its own sense and because of this differentiation it was able to carve out a niche in the very competitive PC industry. The subsequent pages shall illustrate its direct business concept with its level of market orientation and a deep understanding of the marketing concept. The customers selected are the end users with in the corporate segment. When dell entered the US PC market it sensed an issue/problem of dissatisfaction among customers in term of product and service delivery of PCs and related components. Dell successfully filled the gaps by going to the root cause of the issue/problem. The nature of the issue shall be analyzed with different models. The five performance objectives of quality, speed, dependability, flexibility and cost shall be judged in relation to their adding value to customers. In the end recommendations to improve the relationship with the end user as well with the corporate client shall be illustrated. Table of Contents Introduction 3 Dell- Customer focused & Market Oriented 4 Customer Segmentation 8 Root Cause Analysis 9 Operations Performance Objectives - Quality 12 - Speed 13 - Dependability 15 - Flexibility 16 - Cost 18 In Retrospect - Importance Performance Matrix 20 - Gap Analysis 21 - Value Chain 23 - Customer Delivered Value 24 Conclusion 25 Recommendations 26 References 27 Introduction Dell with its direct business Model has heralded an entirely unique concept of customer focus. By engaging all of its channel partners Dell has successfully integrated the idea of customer need identification and its fulfillment. Dell has carefully segmented its business around customers and not around the product. Its largest customer segment is the corporate segment and the end users who are working there. In the ensuing pages a root cause analysis has been done to identify the key customer issue and the reasons behind it.
One of the tools Dell uses to measure supplier's performance is through a report card. In it the quality objectives are set clearly. Dell is always striving to achieve less than 1,000 defects per million. Chart I - Slack et al, 2007 Quality is also linked to other customer delivered values and has a profound impact on speed, cost and dependability of operations (Slack et al, 2007). Conformance to quality means very few mistakes will be made that result in reduced costs, increased dependability and speedy response to customer. Quality is one aspect where Dell customers are the most satisfied one. Each corporate customer has been assigned a team of dedicated Dell account managers who are always available at the beck and call to solve quality problems, if any. 2. Speed - Speed to market is what has catapulted Dell to become one of the top three in the business. Speed means the time spent in fulfilling the needs of customers. It's the time between customer order and delivery. The faster a customer receives a product the happier he will be and more benefits in terms of timely usage it shall receive. This system delivers immense value to Dell's corporate customers. Its JIT (just-in-time) inventory system greatly emphasizes this important aspect in operational efficiency. Dell produces goods exactly when they are needed i.e. deliveries are made on request. This entire transaction right from the customer to supplier is being done via the web. Instead of vertical integration it's been termed as a 'virtual integration'. Each big corporate customer is assigned separate account on the web called as 'PremierDell.com'. With this facility the end users can easily order and track their respective purchases anytime. The intensive use of low cost and fast paces e-commerce business has put Dell closer to its customers like never before. Dell's suppliers are located close to its assembly plant in Texas, Tennessee, Ireland, Malaysia, China and Brazil.
In the preceding pages we have outlined the thinking that enables Dell to successfully orient its offerings to the market. By Root cause analysis the reasons for customer dissatisfaction were illustrated. Five performance objectives of the organization were evaluated in relation to Dell's delivery of customer value. Their effectiveness were measured by using tools such as Importance - Performance matrix, Gap Analysis and Value Chain. And it was found that Dell is optimally performing at all levels. It has closed all the gaps in existence between itself and the customer. It is a true metaphor for 'Value Chain' depicting intra-organization coordination in delivering superior customer value. Dell has mastered the below four Ps of Marketing Mix- Product - Providing innovative customer solutions Price - Keeping costs down at the customer end Place - Making the entire purchasing and interaction more convenient via internet Promotion - Continuous touch with the customer thus maintaining flawless communication Recommendations Dell is clear in its customer segmentation approach. It is targeting the end users in the corporate segment. By the introduction of PremierDell.com it has successfully establish one to one relationship with its end customer. It is a benchmark for initiating the significance and power of technology to reduce cost and increase convenience. a. PremierDell.com is already helping Dell to learn working styles of different end users. Within a corporate segment Dell can differentiate different types of influencers and decision makers. It should strive to understand the customer behavior more closely. b. Dell can also learn to deduce computing skills of different users. This would help Dell to further customize its offerings and increase the value added. c. Dell can also link its customer to its suppliers as it would help the suppliers gauge the requirement first hand and would further help in reducing inventories both at Dell and the supplier facilities. This would increase the response time to customers. d. Dell can provide assistance to its corporate clients to support their own customers in terms of business processes, IT and Interactivity. It would also help in increasing its customer base.
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