Thesis: Value Chain Analysis of Dell Computers

Sample Thesis Paper

The computer giant Dell manages its value chain quite effectively and efficiently. The value chain is considered to be quite unique because the company sources all of components from vendors that are located in different parts of the world. The value chain of Dell and its direct model of selling are considered to be the main aspects of sustainable competitive advantage of Dell. The build to order supply chains of Dell are quite effective for the company (Barney, Gaining Sustainable Competitive Advantage , 2001). All of these sources give a boost to the corporate strategy of Dell and through these aspects Dell maintains an advantage over other players (Achtmeyer, 2002). The computer industry is quite competitive in nature and the level of competition is based on five forces:

  • The threat of substitutes
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • The degree of rivalry among competitors
  • The threat of new entry

The entire value chain of Dell computers is based on the Porter’s (1985) model. Dell follows the principle of outsourcing and it outsources all of its basic components like manufacturing, sub-assemblies which include motherboards and all the production of notebook PC’s. Dell doesn’t outsource the final configuration and it keeps full control over supply and value chain. Motherboards of Dell computers are produced locally and elements like disk drives, cables, power systems and connectors are shipped from Asia.

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