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The company’s functional strategies were designed to support the basic tenets of built-to-order manufacturing, complete customization and just-in-time delivery. Since the mid-1990’s, Dell operated its production facilities with a “cell” organization. This system, which employed a team of technicians who worked together on a single product at a time, facilitated substantial advancements in productivity and reductions in assembly time.[xv] Core Competencies & Competitive Advantage. Dell’s core competencies resulted from its strategic decisions, all of which reinforced vertical integration. Historically, the level of customization, speed of delivery and technical support competencies led to a clear advantage over the competition. However, in the changing industry environment, the contributions of Dell’s core competencies to its competitive advantage have reportedly vanished; Michael Dell’s return to the helm in 2007 supports this
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Value chain management: As the industry faces continuing pressure to reduce prices it is imperative that companies continually optimize the value chain to reduce costs and maintain margins. This is particularly important in this industry where some of the largest growing products carry margins less than 1%. 2. Management: In this saturated market, competitive advantage is difficult to produce yet easy to imitate. Poor strategic decisions can quickly lead to loss in market share. Management must constantly be focused on eliminating the competitive advantage of its competitors, while protecting the competitive advantage it possesses. 3. Technological innovation: With the industry quick to imitate any success, companies must constantly offer technological advances. New technology generally carry the highest value premium, therefore those who introduce the technology are in the best position to profit from it. 4. Reliability and support: With the commoditization of hardware, and the narrowing ability to differentiate on price, companies must differentiate on reliability, product quality, and customer service. Satisfaction in these areas is the biggest driver of sales after
Value chain management: As the industry faces continuing pressure to reduce prices it is imperative that companies continually optimize the value chain to reduce costs and maintain margins. This is particularly important in this industry where some of the largest growing products carry margins less than 1%. 2. Management: In this saturated market, competitive advantage is difficult to produce yet easy to imitate. Poor strategic decisions can quickly lead to loss in market share. Management must constantly be focused on eliminating the competitive advantage of its competitors, while protecting the competitive advantage it possesses. 3. Technological innovation: With the industry quick to imitate any success, companies must constantly offer technological advances. New technology generally carry the highest value premium, therefore those who introduce the technology are in the best position to profit from it. 4. Reliability and support: With the commoditization of hardware, and the narrowing ability to differentiate on price, companies must differentiate on reliability, product quality, and customer service. Satisfaction in these areas is the biggest driver of sales after