Dell

DPosted on October 5, 2012 by John Dudovskiy

ell is very famous for custom-built PC and other computer related products and selling them online. Dell is very efficient in terms of dealing with its suppliers and keeping the inventory near to zero level which helps the company to adapt JIT method which lowers the prices to the final user.

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The bargaining power of suppliers

According to common assumption, power is high where the brand is powerful. Therefore, Dell is assumed to have far higher bargaining power than the suppliers. Dell has been successfully managing its competitors in terms of getting the needed supply of inventories and get them produce the inventories according to the specifications of the company.

And the CEO of the company, Michael Dell also mentioned that Dell Company never sticks to one supplier forever, as they always change the suppliers if the suppliers are not meeting the demands of Dell. And the company always goes to the supplier which is innovative and cost competitive among other rival suppliers.  Therefore, it again indicates that Dell has higher bargaining power than its suppliers.

Another indication of Dell to be in better position than its suppliers is that Dell got most of its suppliers locate their businesses and manufacturing units close to Dell’s manufacturing and assembly units.  By getting the suppliers near its manufacturing units, inventory is down to an incredible four days and efficiency is the key ingredient.

Moreover, suppliers can regularly supply their inventories to Dell within hours of assembling the computers which indicates a strong corporate understanding of both Dell and its suppliers.

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