In order to understand why cultivation of core competencies is crucial to the future success of Dell in this period of increasing competition, we will examine which competencies have led Dell to be successful in the past, what the competitive advantage derived from these competencies is, and what Dell must do to maintain its leadership position despite the entry of competitors into the direct sales channel. Core competencies provide access to a wide variety of markets, make a significant contribution to customer benefits of the end product, and are difficult for a competitor to imitate.
Dell has developed two strong core competencies that have allowed it to pursue a cost leadership strategy successfully in our view: * Supply chain excellence * Direct sales excellence Supply chain excellence has allowed Dell to run a lean, customized, and high quality manufacturing operation. Just-in-time manufacturing (low inventory), minimization of working capital in the production process, and the ability to work with suppliers have led to cost leadership in the PC market and given Dell a strong competitive advantage.
Direct sales excellence has allowed Dell to cut out resellers and other intermediaries from the sales process and distribute high quality products to consumers at competitive prices. In 1998, the year that competitors (other than Gateway) began to introduce a direct sales channel, Dell had a significant competitive advantage in the PC market. The first part of this advantage was manifested in much lower costs than competitors (details in table 1 and 2): | Dell| Compaq/Reseller team| Inventory (% of total assets)| 5. 5%| 8. 7%|
SG&A costs (% of revenue)| 9. 8%| 16. 0%| R&D costs (% of revenue)| 1. 7%| 4. 3%| Reseller payback costs| 0| ~2. 5 cents per dollar of revenue| Dell was also able to sell 70% of their PCs to the more lucrative business customers (large and small businesses), while Compaq only sold 60% to these users (case exhibit 11). Within the business segment, Dell charged about the same price as Compaq for an equivalent PC (case exhibit 10b). Table 3 shows the $300 to $450 difference between the price of a business PC and that of a home user PC in 1998.
These differences have allowed Dell to drive a larger wedge between customer’s willingness to pay (selling price) and costs. Dell’s business model has been successful in sustaining consistent growth, with the strongest revenues CAGR between the years of 1992 and 1998 (details in table 4). In order to maintain this advantage, it is imperative that Dell not rest on its laurels. Competitors will have difficulties imitating Dell’s core competencies, but Dell must continue to cultivate them in order to remain in a leadership position.
First, investment in and operation of the supply chain and direct sales channel cannot be cut. Although this may increase cost savings in the short run through outsourcing, this will undermine the long term success of Dell by outsourcing its core competencies. Second, selling through indirect channels such as resellers must be discouraged as it will dilute the culture of excellence in direct sales. Lastly, Dell can leverage its strength in sales and supply chain to sell existing products into new markets (i. e. nternational) and also expand its product offering within existing markets.
For this latter option, any technological consumer good that requires manufacturing and could be sold directly to consumers such as servers, printers, or cell phones would be ideal for Dell to pursue. This would leave Dell less exposed to competitor imitation specifically in the PC market. In conclusion, Dell has established itself in the PC space with a strong competitive advantage, however competitor emulation should worry Dell in what has become almost a commodity market. Actions noted above should help.
Modernism: How does DuBois’ theory of double consciousness apply to the works we have studied?
Modernism: How does DuBois’ theory of double consciousness apply to the works we have studied?.
W. E. B. DuBois published Souls of Black Folk in 1903. In his highly acclaimed work, he postulated the theory of double consciousness. How does DuBois’ theory of double consciousness apply to the works we have studied?
Use two works, one African American and one majority work. You may choose from the following:
• The Autobiography of an Ex-colored Man by James Weldon Johnson, • Heritage by Countee Cullen, • “The Man Who Was Almost a Man,” by Richard Wright, • “We Wear the Mask by Paul Laurence Dunbar, • “Barn Burning” by William Faulkner, and • “A Rose for Emily” by William Faulkner. For DuBois, double consciousness is the African American’s tendency always to view himself through the eyes of the white world. In so doing, he realizes that he can never measure up in the eyes of whites, that they always will see him as part of the group (stereotype) never as an individual. Double consciousness results from the African American’s unsuccessful attempt to reconcile his African self and his American self. You might wish to explain Dubois’ theory of double consciousness in your own words before you give your thesis about how double consciousness is evident in the works you choose. What is the source of the double consciousness for your characters? It is not about race for all of the characters. For Colonel Satoris Snopes (Sardy), for example, is blood vs. morality or loyalty to his family vs. individuality.
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