Value Chain Analysis of DELL. Administration with the Global Supply Matrix


Academic Paper, 2020

13 Pages

Anonymous


Excerpt

Table of Contents

Introduction
Issues of Increase in Debt
Leveraging Sales Force of EMC
Increase in Sales

Introduction of Value Chain Analysis

Introduction of Value-Chain analysis on the chosen company
Primary activities of Dell
Secondary activities of Dell

Conclusion & Summary of analysis

Reference List

Appendices

Executive Summary

Dell is an end to end technology organization that has incorporated a significant value chain into its operation. The value chain is driven by significant factors that help in delivering better results pertaining to the product offering that is available with the organization. This organization has incorporated significant beyond the boundary operation that has helped it to introduce a supply chain that has achieved a significant competitive advantage. It has been ranked second in relation to production and sales of computer hardware. This report generates substantial idea about how dell has introduced understanding of its value chain analysis and how it administers a better supply chain scenario using the global supply matrix.

Introduction

Dell technology is termed to be an end to end provider of technologyand has a comprehensive portfolio. It is a US multinational organization dealing indevelopment, selling and repairing of different aspects of computers. The company was initially known as PC’s Limited and the company was initially run from a dormitory room. It started business by providing different forms of updates for PCs. The founder of Dell wasMichael Dell in the year 1984 and he was from University of Texas in Austin. The latest revenue collection of Dellis $ 23.8 millionas per the reports of fourth quarter GAAP (I.dell.com, The Business Case for a Sustainable Supply Chain DELL, 2017). In accordance to Brand Finance, Dell is listed in 92nd position among all the 500 companies enlisted in Brand Finance Global list. It is also enlisted at 68th position in the Global Rep Trak 100 position. Dell has worked with the aspect of corporate development in the recent year. It has incorporated focus on innovation by the Dell capital. This is going to include Strategic Development, Complex Transaction Structuring, Mergers and Acquisitions and Market Intelligence. In 2017, it has achieved in bringing in transparency in its supply chain. In 2019, it has gained 90 billion US dollars as total revenue collected. In 2017, it has achieved in developing products from recyclable materials. In 2018, it has achieved in workforce development and increased focus of its employees through intensive training. In 2019, it has gained technical advantage in meeting its target of reducing carbon foot print by 50% within 2020. In the year 1984 MichaelDell introduces PC’s limited with $1000 and in 2001 it became No.1 computers system provider around the world. Simultaneously, in the year 2015 there has been significant customer satisfaction associated with the organization. In 2016 Dell reaches out their great idea of working with the human development process (Dell.com, 2019). Dell has the mission to be the most successful company pertaining to computer selling in the world. It also involvesdelivering the best possible experience pertaining to the industry. The Vision statement of Dell is related to way of doing business and way they interact with community they are operating in. It works with interpreting the world available around them and incorporating the need that is associated with their customers. The growth strategy that is evident in Dell relates to simplifying its offering with help of program, “Smart Selection”. This is going to help Dell sell in the world of CTO (Configure to Order).

Issues of Increase in Debt

There are some issues related with Dell’s EMC Plan as it lacked in having the appropriate mix of hardware and software ingredients. This will lead to a decrease in value chain of Dell and is evident from the perspective of debt involved with Dell. The merger plan might put Dell in an overlay interested rate as the merging companies will take more than $45 billion. Every merger that is evident has a significant amount of difficulties associated with it. This is due to fact that there are two different companies that are going to work. Both their cultures are going to be amalgamated (Cnbc.com, 2015). This leads to creation of a shorter runway for the organization of Dell. There are also related issues with this merging plan as the two companies will face difficulty in integrating their organizational culture with one another (Bauer, Matzler, & Wolf, 2016). In relation to this, the merger plan will also bring in difficulties for Human Resource Unit to develop effective incentive plan for key employees. This imposed the issue of high rate of employee turnover and a decrease in value chain due to low performance impacting on product quality. On other hand, it has been observed that EMC is also a long-term debt of $ 5 billion and a $ 2 billion in short-term basis . [Refer to appendix 1]

Leveraging Sales Force of EMC

There are also relevant issues with Dell merging with EMC from perspective of retaining and leveraging its Sales Force. It has been seen in earlier context that Dell has acquired organizations such as Secure Works, Sonic Wall, however this merge has been the biggest event for Dell (Cnbc.com, 2015). Success factor to add value to its products depends on the effectiveness with which sales force of EMC can be retained. The issue with leveraging sales force of EMC is considered as one of the key enterprise strategies to add value to products. Dell and EMC have not worked with the aspect of sales force cut (Cnbc.com, 2015). This has affected aspect of the organizational needs to cater to the requirement that necessary to drive a better value for the organization. Sales force of Dell has been witnessed to be excited to bring in better value towards the organization. [Refer to appendix 2]

Increase in Sales

One of the positive effects of merging with EMC is evident from the first year itself as Dell EMC witnessed an increase of sales. There are an increase in demand of servers and networking equipment along with PCs and it has been able to meet the supply side. This has added value from customer perspective and in 2017, it planned to come in business deal with General Electric. Merging with EMC has shown increase in sales percentage by 48% in comparison to financial year before the merging plan happened (Datacenterknowledge.com, 2019). This has also led to narrowing of the operational losses and hence added value to the profit generation process for Dell. The deal with EMC has helped Dell to become a one-stop store for its clients and become a leader in market competition in field of delivering cloud services (Datacenterknowledge.com, 2019). [Refer to appendix 3]

Introduction of Value Chain Analysis

Taglioni, D., & Winkler, D. (2016). Making global value chains work for development. The World Bank.

Value chain analysis is a global aspect that has been witnessed in substantial organizations. Ithasbarged in a differential understanding of howorganizations cater to global competitive advantage. It has been witnessed that an essential role of increasing profit and product quality have been played by developing Global Value Chain (GVC). This has brought in a substantial change in the paradigm of development that is related to international trade. This has incorporated a change for different developing countries to administer the aspect of industrialization and the attribute of “servicification”(Taglioni & Winkler, 2016). Business strategy involves coming in business relationships through merging and acquisitions with other companies.This adds value to the operational processas resources to be utilized increases (Grant, 2016). It has beenwitnessed that production value increases by acquiring factories in regions of business operations. It helps business organizations to develop a local value chain and connect its operational units. GVC can be accepted as a method wherein different factories tend to cross borders. Production of high-quality goods and different services entails the cross-border movement that is evident with different organizations. It involves ways in which monitoring helps in creating a supply chain that entitles a competitive value.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

The books reflect ways in which value chain incorporates a substantial value for the competitive advantage of the firm. The aspect of competition is driven by substantial factors that create an issue in the development of the organization. Understanding of the industry competition is significant before administering a proper value chain that is going to barge in competitive advantage. Industry analysis tends to introduce an emphasis on different practical issues of competitive analysis(Grant, 2016). It is quite significant to undermine the aspect of how resources and capacities can be applied within an organization. This inturnleads to identification of value chain existing in different organizations (Taglioni & Winkler, 2016). Identification of cost advantage is being concerned with analyzing overhead charges of competing firms and the use of value chain for finger grain analysis.

Stein, C., & Barron, J. (2017). Mapping actors along value chains: integrating visual network research and participatory statistics into value chain analysis (Vol. 5). International Water Management Institute (IWMI). CGIAR Research Program on Water, Land, and Ecosystems (WLE).

This aspect of value chain mapping is associated with ways in which visual network is integrated withinvalue chain analysis. Mapping factor is associated with the way in which value chain is depicted to drive an understanding of different activities. Value chain is not just associated with a linear sequence rather acknowledges different actors channelizing value chain in a much more significant mannerism (Stein & Barron, 2017). Value chain analysis is related to ways in which activities and different actors are connected in delivering end-products. It is thus related to being a metaphor for connectedness. It is thus important to undermine how actors and activities are connected both vertically and in a linear mannerism. This works as an aid in distinguishing between different channels and also to work as an understanding of the linkages (Grant, 2016). Systematic mapping helps in understanding of diverse actors working within a value chain to develop product, price and deliver competitive advantage to a business firm.

Introduction of Value-Chain analysis on the chosen company

Primary activities of Dell

Inbound Logistics

Dell’s inbound logistics involves activities of warehousing and control of inventory of raw materials associated with the company. Dell works with transparency, collaborative leadership, and innovation in its supply chain. The management system feedback is well taken care of by the organization and there is separate compliance associated with the organization (Dell.com, 2019). There are 68% of factories that have gone through two significant audit cycles working to initial audit scores. There is a significant amount of training that is provided to different suppliers that include SER Supplier Orientation and there is a significant RBA learning academy. There are monthly webinars that are conducted for the suppliers. It has helped in gaining inbound knowledge pertaining to the firm. In the field of inbound logistics, various factors consisted of innovation; raw material processing for manufacturing, transparency has helped a lot for improving value chain analysis (Grant, 2016). In addition to this, within Dell, collaborative leadership, prominent managerial activities, advanced development helps a lot for improving inbound logistics. As becoming a part of VCA, it also develops VCA thereafter.

Operations

Dell is a global brand working with a global supply and distributioncriterion. The aspect of the network of Dell is associated with optimized efficacy and productivity(I.dell.com, Dell 2020 Legacy of Good Plan, 2019). Dell works to ship over 200,000 orders on a daily basis that incorporates more than enough products. Building each of these products come from a complex value chain that derives a better competitive advantage for the organization. Dell owns an outsourcing manufacturing factory that is located in different countries (I.dell.com, FY18 Supply Chain Sustainability Progress Report, 2018). It has worked with lean six sigma methods that have helped the organization to work with better management of different supplies. This aspect of working with different operational sectors has helped the organization to have a better value chain of providing various products. In the field of different functional activities within an organization’s operations, enriches a lot for enhancing value chain analysis rightly (Stein & Barron, 2017). In Dell has an optimized efficacy, high level-based order for sales, prominent work management can make rapid growth of Dell’s functional activities rightly.

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Details

Title
Value Chain Analysis of DELL. Administration with the Global Supply Matrix
College
Open University Malaysia
Year
2020
Pages
13
Catalog Number
V986993
ISBN (eBook)
9783346346582
ISBN (Book)
9783346346599
Language
English
Tags
Value, Chain, Dell
Quote paper
Anonymous, 2020, Value Chain Analysis of DELL. Administration with the Global Supply Matrix, Munich, GRIN Verlag, https://www.grin.com/document/986993

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