How Dell Uses Effective Strategy to Gain Competitive Advantage Dissertation

How Dell Uses Effective Strategy to Gain Competitive Advantage - Dissertation Example Dell being among the primary sellers of computers is what has led to the question of what type of strategy is often utilized. Learning about the type of strategy being initiated by Dell is significant as it enables the reader to understand what it takes to be the best in the market. Therefore, the strategy that is being utilized by Dell Corporation is the direct sales approach. Dell Corporation direct sales approach is one of the most successful strategic innovations of the past that has generated positive results for the company. The firm was able to come up with a model that undercuts its competitors on price, forge closer links with its clients and offer shareholders a return several times as compared to the market price. Significantly, Dell’s direct sales model was initially singularly suited with the intention of maximizing the cash conversion cycle. The firm was able to carry little inventory in the process because it bought components on a just-in-time basis. The signif icance of the approach is customers often paid Dell Corporation more quickly than it paid suppliers, and, as a result, cash flow at Dell was positive. Furthermore, little inventory for Dell led to the reduction in component costs that could easily be passed rapidly to clients. The outcome of the process, therefore, led the firm to improve its competitive position in the market. Furthermore, the direct sales model made Dell an industry and shareholder’s sweetheart, a high-tech pioneer with seemingly limitless growth.