Read the Dell case and answer the questions to the right.
Dell Computer Corporation is a case study in entrepreneurship. Michael Dell, who as a teenager analyzed newspaper buying patterns to customize his subscription sales for the Houston Post targeting newly married and people who had moved earned enough to buy a BMW prior to enrolling at the University of Texas in 1983. By 1984 his dorm room business of selling handmade computers was bringing in $80,000 a month. Dell incorporated Dell Computer Corporation in April 1984, dropped out of college, and launched a company that is now an international leader in technology sales. Dell focused on customer service and direct sales. In 1990 Dell was the top rated company in the first J.D. Power & Associates ranking of personal computer manufacturers. In 1992 Dell instituted its Professional Services Capabilities Unit. It coordinated the international services of Dell's global programs. In 1993 Dell initiated a program that allowed customers to select the level of service they received when buying a computer.
Initially direct sales were handled by phone. The direct sales model allowed Dell to build computers when they were ordered, allowing inventory costs to be kept at a minimum, compared to competitors who build thousands of computers in different configurations for sales in stores or by catalogues. In 1996 Dell started selling computers on the World Wide Web. The direct sales model migrated easily to the Internet, including automation of not only customer services but also supply chain management. Over the next 10 years inventory control of components through the supply chain of subcontractors and products was cut from a week to fewer than 24 hours. Dell incorporated transportation and logistics management of its international manufacturing to include all forms of transportation for efficiency, creating an integrated physical distribution concept. The customer, when making an order, chooses the final physical distribution based upon how quickly they want delivery of their computer. Empowering the buyer with the decisions of the computer components, delivery, and service increased customer satisfaction. Dell's decision to utilize "Green" technologies to become a carbon neutral company increased customer satisfaction with companies and individuals concerned with the environment. In 2009 nine of its European and American facilities were powered by renewable energy, including 100 percent of its 2.1 million square-foot global headquarters at Round Rock, Texas.
What factor has allowed Dell to cut costs and still remain competitive in the rapidly changing technology industry?
Customer service
Physical distribution
Supply chain management
Inventory control
In 2009 Dell announced it powers nine of its facilities in the United States and Europe with 100 percent renewable energy. In addition to environmental responsibility, this business decision contributes to:
Customer satisfaction
Distribution center management
Piggybank services
Total inventory cost
Dell's transportation and logistics system is an example of:
Physical distribution center
Piggybank services
Environmental decisions
Supply chain management
