Bus 630 Week 1

Dell, INC

BUS 630: Managerial Accounting

April 22, 2012

1.  What is Dell’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?

Dell’s business strategy for success in the marketplace is to build a definitive direct relationship with the consumer. They hope to achieve this relationship by “combining its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies.” Their goal is to provide the customer with a superior product and a great customer service network to back it up. Dell has the direct link to the customer by selling direct. Cutting out the middle man creates a more affordable product and factory direct allows more instantaneous customer service. Dell uses this model to create an intimate relationship with the customer. This shows that Dell’s primary concern is the customer as they do not want a middle man to jeopardize their reputation.

2.  What business risks does Dell face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks?

     Dell has several factors that could threaten Dell’s business progress in meeting satisfactory stockholder expectations. “General economic, business, or industry conditions may result in a decrease in net revenue.” The biggest threat today is the economy and less buying power from consumers will result in fewer profits and this would directly impact stock prices. Another factor is that the personal computer market is very competitive and with new technology always coming out, could become very expensive to compete without innovation, which takes R&D dollars to produce. The success of Dell has been because they have been able to offer more affordable PC’s...