Value Chain Analysis Example Dell

Value chain analysis is a strategic management tool that helps businesses identify the activities that create value and competitive advantage to the business. Dell, a leading computer technology company, has been extensively studied for its value chain management practices .

Dell’s value chain consists of two primary activities: inbound logistics and operations, and three support activities: outbound logistics, marketing and sales, and service . The company works with over 165,000 channel partners in inbound logistics and utilizes Just-in-Time (JIT) philosophy to save on inventory costs . The main distinctive point between operations of Dell and its competitors relates to the fact that Dell is not a computer manufacturer; the company merely assembles parts manufactured by other companies. At the same time, high level of product customization is adapted as one of the bases of competitive advantage by the business .

Outbound logistics consists of five stages as marked in red color in Figure 2 of . Thanks to the practice of mass customization, Dell is able to complete order fulfilment in a short duration of time. Generally, Dell completes customer shipments in a timely basis, staying committed to its promise of product customization as a result of cumulative advantages of part modularity, inventory program managed by vendors, demand management and mass customization . Marketing and sales is acknowledged by Dell as a critically important primary activity and the company¬ís marketing strategy has changed since the company became private in August 2013. Specifically, Dell marketing management aims to associate the brand image with an entrepreneurial spirit by shifting attention to the fact that the company is no longer publicly listed . Pre- and post-sales customer support can be specified as one of the solid bases of Dell¬ís competitive advantage. Dell’s employees take 50,000 phone calls from customers every day and document and organize their comments, which are then distributed to managers. Also, there are 4300 Dell certified partners globally who assist with Dell solutions and services to customers .

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