Innovation and Business Models

This assignment examines Dell's successful implementation of an innovative business model. Students will analyze Dell's approach using frameworks such as design thinking, open innovation, and the product life cycle model. The analysis should incorporate relevant academic literature and consider Dell's competitive advantage within the industry.

Business Creativity

Table of Contents
INTRODUCTION...........................................................................................................................1
BUSINESS ANALYSIS..................................................................................................................2
CREATIVITY, INNOVATION AND PROBLEM SOLVING......................................................5
RECOMMENDATIONS.................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business creativity is the essential component in the present scenario in order to bring
growth and development. It is found that each organisation is inculcating this in their practices o
have prominent position in market. Report is prepared elucidate the concept with reference to the
American privately owned multinational computer technology company Dell Inc. It develops,
sells, repairs, and supports computers and related products and services.
Products and services of the Dell company
Dell company is providing the array of products and services to the customers in wide
areas and segments (Brown, 2012). The categories in which the products and services offered in
Dell are desktops, software and peripherals, servers and networking, services and storage.
Desktop PC'S: Dell is excelled in providing the lines of desktops to the customers with the high
multimedia capability and gaming experience. It extends the great using experience along with
the availability of unique designs. Along with this the range of notebook computers are provided
to the customers who are seeking to leverage the benefits of technological advancements in the
affordable prices and stylish package.
Software and peripherals: There are wide range of software and peripheral products are
provided by the Dell company has the expanded customer base to satiate the needs of consumers
using the latest technology in wide area. Software provided by it includes the operating systems,
antivirus and related security systems, office and business applications and entertainment
software. Among the peripheral products, printers are the predominant section that is being
offered by Dell in its product line (Verganti, 2013). Along with this are the digital cameras,
power adapters, scanners, television, notebook accessories, software tiles and many other related.
Moreover, there are range of displays provided by the company such as projectors and flat panel
monitors.
Servers and networking: Dell has the PowerEdge servers are the base for the scalability,
performance and reliability. This ensures the high performance of the products offered by it in
the wider extent.
Services and storage: Wide stream of services are provided by the Dell company in the wider
extent. Such as it includes the infrastructure consulting services, support services, training
services, asset recovery and recycling services and deployment services.
Issues faced by the Business
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There are slew of challenges and issues faced by the business in different areas.
Competition
With the growing industry the competition level has been increased to the great extent.
The hardware and software industry is the fastest escalating industry in the present time due to
the fast pace technological advancements and inculcation of new technologies in the process
adopted by the companies and consumers. Moreover, the low price difference in products
enhance it to the greater level (Menguc, Auh and Yannopoulos, 2014). Major rivals of the
company are Sun Micro-systems, Lexmark, IBM, NEC, Fujitsu-Siemens and Cisco.
Dependency on Research and development
Dell is in partnership with range of third parties that supports the company in providing
the research and development solutions to it in order to enhance the efficiency and productivity
of the services. There is the high degree of dependency on the success of the partners who are
catering to get the innovation and creating in the products.
Economic and industry conditions
The present market conditions are volatile in nature with the range of fluctuations that
effect the hardware and software companies on the larger extent. These effects have the
significant spill over effects on the Dell company (Verganti, 2013). The economic uncertainties
in the market leads to the changes in demand and supply of the products and services offered by
company resulting into the variations in the growth and development
BUSINESS ANALYSIS
SWOT Analysis of the Dell company
Strengths
 Dell companies in having the strong relationships with its suppliers groups in the wider
areas. Adopting the total product model it has been integrated with range of organisation
and business entities that leads to the collaboration in large extent. It benefits in the
widening of networking, connectivity along with bringing improvements in efficiency
and productivity.
 The products and services offered by the companies are in affordable range in
comparison to the technological features and facilities extended by it.
 Customer services of dell company has been recognised for its reliability and value. It has
the precise and prompt customer service fulfilling their needs and wants.
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 Shareholders and the investors are having the high degree of confidence on the working
and its operations. In that regard it has good brand image and high value of equity. Customer loyalty and retention is the USP of the company which enables it to have the
expanded customer base.
Weakness
 It is providing the range of products and services to the customers. In that regard it enjoys
the benefits of revenue mix. Along with benefiting, it also extends the range of
difficulties and challenges to it such as it makes it to have diverse plans and policies that
increases the complexity (Wymer and Basil, 2014).
 Dell company is largely dependent on the demand and supply scenario. Such as any
fluctuations in any of the part leads to the decline in the profitability and revenue
generation. The vulnerability of the company's operation leads to the fluctuating trends. The company is largely dependent on the direct sales model according to which it has the
process of placing the product in market with the business to consumer interaction.
Opportunities
 The widening and expanding industry provides an opportunity to the company for the
expansion in the larger extent. It makes the company to have its operations and establish
its customer base in international markets at different geographical locations. The industry in which dell company is operating is having the tendency of fact pace
transitions (Verma, 2010). The continuous and frequent transition in the technology leads
to the up-gradation of the products and services offered by dell.
Threat
 The major threat to the company is the regional competition faced by it with the
increased number of rivals and competitors.
 The prolonged economic downturn faced by any country affects the sales of the company
in the significant manner.
 The high degree of reliance on suppliers and other organisation leads to risk ridden
operations.
The company is using the comprehensive business model inculcating the several
segments in that with the range of operations conducted by it. In the execution of the current
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business model that comprises direct sales, Build to order and direct distribution of the products
and services are having both the driving forces along with the constraints associated with it.
Factors that drives the model
 Direct sales by the organisation leads to the direct transmission of the orders from the
customers to the company (Vila, Enz and Costa, 2011). In this there is the process which
ensures the accuracy of the forecasting and the segmentation of the demand of the
customers in different range of products and services offered by it. With the changing
perspective it is required to have the precise analysis of the shifts in the demand and the
sales in the particular or diverse direction. The early indication found for the demand
shifting enables the organisation to prepare the plan with respect to it.
 Build to order system enables the organisation to have the better control of the operations
in the significant manner. With the effective communication system there is the sound
connectivity and networking maintained in the organisation that complies with the needs
and wants of the customers in the more precise manner. It further ensures the proper
monitoring and evaluation of the quality of the working and management done at the
place. Next is the global distribution of the products and services in different part of the world.
Along with this there is the evidence of the manufacturing units at the places having wide
customer base (Dell, 2016). With this the improvement is seen in the outbound logistics
and optimization of the production and management.
Factors that constraints the model
There are many factors that constraints the current business model used by it on the larger
extent. They impart the significant impact on that which encounters the ray solution to all the
subsection divided in the working units.
 Component shortage is the major constraints that has considerable amount of spillover
effects which affects the other areas of region that entail the working predominantly in
the specific section. Component shortage due to number of factors directly affects the
production and inventory keeping which has the direct impact on the services that it holds
in that regard in all respect.
 Significant exposure to the PC market is the major reason that hinder the execution of the
current business model. According to this it is found that with the considerable amount of
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entry of the new emergents and players in the market leads to the constraint of the
effective leveraging of the benefits of the evolution of the advanced technology (Brown
and Osborne, 2012).
 Risk associated with the working is the major part that affects the growth and
development of the organisation in the larger extent. It is found that in case it is found
that industry is experience the volatility on the larger extent along with the fluctuations in
the technology and market conditions, it requires the company to have the amended plans
and working frameworks (Chiaroni, Chiesa and Frattini, 2011). It led the changes in all
respect that affects the operational aspects in the regard it is imperative to adopt the
methodology.
 Supply chain functioning also constraints the operation at the time when it is hampered
with the certain obstacles and hindrances. It is stated that the obstacles that are required to
make the working in the optimum manner. Transportation is the major part of the
working of the dell company. It lays that there are instance which states that at the time
when it is hampered due to any reason, supply chain is the major section which get ridden
by the smoothness.
Business Model Diagram
Porters Five Forces Model
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Illustration 1: Business Model Diagram of Dell

Bargaining Power of Customers: Here the bargaining power of the customers is relatively lo
because the industry selling is done on the fixed price basis.
Threat of New entrants: There is high threat of new entrants such as there are many players in
the industry with the emergence of technological advancements.
Threat of Substitute Products: Dell faces high threat of substitute products as there is marginal
difference between rival products with reference to the product line and process.
Competitive rivalry within Industry: Competitive rivalry is high among the big players such as
Dell, Samsung and Apple.
Bargaining power of suppliers: There is low bargaining power of suppliers such as there is the
dominance of the Dell in the industry.
Product Life Cycle Model
According to the product life cycle model analysis it is found that the products and
services provided by Dell are at the stage of the maturity level with regard to the progress made
in the strategic manner with the face pace.
Marketing Mix Model Of Dell
Product: The company Dell is providing the wide stream of the products and services to the
customers. In this regard it I able to satiate the need and wants of the customers in all regard such
as design, technical specification and other related.
Price: From the point of view of the price, it can be stated that the offerings are provided to the
customers in the form of the latest technology at the affordable prices in the market.
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Illustration 2: Product Life Cycle Model

Place: Dell is selling its products and services in the different geographical locations in the
defined manner as per their wants and needs.
Promotion: It promotes the products and services in different modes such as ith the direct
selling, personal calling and also leverage the benefit of the latest technology that is through the
digital marketing.
BALANCE SCORECARD
Customer: Dell, has the large number of shareholders in different areas. With the strategic
manner it caters to provide the high level of return to investments to these shareholders and
satisfy them to the utmost level.
Internal: With the defined processing structure, each department is towards the rationalisation of
activities done such as manufacturing, technical specifications, designing, innovation and others.
Innovation: There is the separate team with the name of Dell-innovo that strives towards
bringing new designs and latest technology in the products and services.
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Illustration 3: Balance Scorecard

Financial: In terms of finances, short term and long terms goals are defined with respect to
profits, sales, customer bases to grow financially.
BLUE OCEAN STRATEGY
Blue Ocean Strategy
1. To bring the products and services
with the latest technology.
2. Make the products with
innovative designs and latest
technical specifications in the
affordable prices.
3. Extending the precise and prompt
services to the customers.
4. Making the products and services
available on the online platform.
5. Focussing on increasing the
customer satisfaction through quick
delivery and optimum products.
CREATIVITY, INNOVATION AND PROBLEM SOLVING
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The organisation is recognised for the inculcation of three components in its operations
that are creativity, innovation and problem solving (Euchner, 2013). It is explained with the help
of Business Model canvas.
Infrastructures
Partner Network: The company has the range of partnerships made in order to make the working
in the most optimum manner. In that regard Dell has the specialist in all the fields of its
operations. For instance, it is collaborated with iSCSI to have an efficient manufacturing process,
Perot business for the strategic consultation and system integration (Drucker, 2014). Further,
KACE that is the big player in the systems' management appliances helps the organisation Dell
to have the profound working. In order to extend the storage solution portfolio it had the
acquisition of the Compellent. With the aim to make the security and safety more profound and
strict, it has purchased the SonicWall.
Offerings
Value Prepositions: The organisation is selling the range of products and services in different
segments such as in the hardware and software (Bamberger, Biron and Meshoulam, 2014). In
this way it has the strong holding in the diverse range of markets that influence its working to the
wider extent. It is stated that it has the offerings such as personal computers, servers, data storage
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devices, HDTV's computer peripherals, cameras, printers, MP3 players, electronics, network
switches. Along with this it extends the services in the wider context with the large number of
centres around the globe in many countries so s to benefit the customers with the fulfilment of
their needs and wants.
Customers
The innovation at dell starts with the customer's preferences and choices. There are
different forms of alliances and collaborations formed with the customers in regard to the
bringing of the growth and development in the country. It is stated that with the inculcation of
several components such as taking of the technological initiatives, adopting innovations and
proceeding towards the product directions (Battisti and Stoneman, 2010). It is found that
organisation is able to state the possibility that consolidate the large number of customers with it.
In that regard a unique initiation is taken by the organisation such as in the alliances with the
customers, there is the sharing of the strategies and the profits and risks with the customers to
gain their loyalty. It also helps in taking the decision in relevance to the needs and want of the
customers in order to add the values to the product.
Channels
The effective supply chain management is the USP of the organisation that led the
organisation to have the growth and development in the wider context. It is found that with the
profound excellence in the transportation system and the logistics in the wider extent, the
organisation is able to move the products and inventory from their manufacturing units and
warehouses to the places of selling. In that regard it is found that the organisation is having the
range of distribution channels with the aim to procure the products and services from the
different parts and locate them to the respective customers (Koutroumanis, 2011). It is stated that
organisation Dell is using different channels such as internet and other digital channels. With the
leveraging of the digital technology it is able to connect with the customers in better way and
place the products to most suitable and accurate manner. It signifies the innovation and creativity
used by it to the larger extent.
Customer Relationships
Customer relationships is the central part of the organisational operations in which the
management get in contact with the customers in different manner (Arora and Gambardella,
2010). In that regard it collaborates with the customers in the dual manner that in one with
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reference to the seeking of opinions and viewpoints to enhance the value of its services and
secondly to extend their services on their part to satiate their needs and wants to the larger extent.
The major part in this is the marketing that is the launching and the promotion of the product to
the existing and the potential customers. An integrated marketing system is adopted by the
organisation in which the promotion is done through varied means such as direct selling in which
the employees of the organisation communicate the potential customers about the detail of the
products and services to them. Secondly it is the digital marketing in which the organisation
leverage the benefits of the latest technology and connects with the large number of people
through the means of internet. In this it uses the social networking sites that is well utilised by
people for connectivity (Brown, 2012).
Finances
Dell is the American privately owned company that is having its collaborations with the
large number of organisation. It is processed with the application of the vertical and horizontal
integration to benefit the company with the utmost level of the efficiency and the productivity.
The excellence in the working leads to the having of the good brand image and gaining the
confidence of the investors and the venture capitalists. This has enabled it to have the make the
availability of the adequate amount of money in different aspects and systems.
Revenue Stream
Revenue stream refers to the section through which the company in gaining the highest
amount of earning. Dell is the company having its operations in the both of sections that is
hardware and the software. In both the segments the driving force of the revenue for the
organisation is the innovation it brings into it with the alliances with many industry groups and
companies. Its focus on the continuous improvement leads to the betterment of the management
and leadership along with the up-gradation of the quality of the products and services extended
by it. Such the services provided by it are improved on frequent basis to keep the pace with the
fast moving market and maintain the high degree of speed (Chesbrough, 2016). Further, in the
each new hardware series the company install the latest software and the antivirus to protect the
data and the information of the consumers in their systems and the hardware. With this it is able
to gain the confidence of the large number of the people around the world and expanding its
customer base to the large extent
Resources
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Resources at the organisation are being utilised on the most optimum manner. It is found
that the organisation Dell is having the effective system of making the resource utilization with
the use of all the optimum measures (Chesbrough, 2010). With the use of integrated system
management tools enables the organisation to have the benefits of the growing demand and the
share in market. It is further found that the organisation with the cost effective scaling is able to
make the use of finances in the optimum manner. It makes the working in compliance with the
plans and policies framed in the least possible expenses. Along with this it is able to derive the
desired goals and targets in the respective areas.
Contemporary challenges and solutions
There are certain improvements which are required to be brought by the organisation. It
can be implemented with the execution of certain measures and methodology (Verganti, 2013).
These improvements can bring the significant amount of spill over effects in the other sections
leading towards the growth and development of the organisation in the wide areas of these
segments leading towards the enhancement of the profitability and the widening of the customer
base along with the improved quality. Product line expansion: It is the process in which the Dell can be able to widen the range
of products and services offered by it in the different segments. There are many market
segments here it holds the significant portion of the sales such as up-to the extent of the
70% such as in the storage, networking, midrange servers and printers. In order to have
the defined addressable market to the greater extent (Menguc, Auh and Yannopoulos,
2014). Geographical Expansion: At present the sales of the organisation is confined to the
limited geographical location. Such as the American company has the large amount of
selling that is up-to the 70% to the American continent. And it has the very less amount
of share in the other markets in the continents such as Europe and Asia. It is found that
these regions are growing with the immense pace that drives the growth in the larger
manner due to the inculcation of the latest technology in their operations in all the
segments. In that regard it can be said that the organisation with its penetration in these
markets with the inception of the manufacturing and the distribution it can incredibly
expand the sales and the customer base along with the gaining of the confidence of the
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people from the different sections of the world (Verganti, 2013). It will bring the
lucrative results to the given organisation. Business strategy: It is found the respective industry is facing the major amount of the
fluctuations and the volatility that encounters the company with the transition in different
parts. With that approach it is required the organisation to have the pragmatic
methodology and brings changes in the policies and strategies used by it as the
fluctuations in the market and the suitability it holds it that regard. Consumer expansion: It is required that the organisation Dell get expands the customer
target group so that it is able to make the sales and revenue generation in the more
optimum manner (Wymer and Basil, 2014). Focusing on the groups such as the education
customers and the other youth domain ill be proved to be very beneficial to the
organisation such as it is found that the demographic dividend is expanding with the very
faster pace in the world that utilizes the latest technology in the larger manner. Hence,
making the innovative and attractive designs for the sections is required to be inculcated
in the strategic formulation and product formation.
 Research and development: Research and development is the core area that functions for
the growth and development of the organisation in the larger extent. At present it is found
that the organisation is relying upon the other organisation and partners for the bringing
of the innovation and creativity in the products and services offered by it. In that regard it
can be stated that with the process of making changes in this section that is having the
indigenous research and development team for the inception and launching of the varied
concepts and lucrative ideas, it will reduce the dependency and the risk associated with it.
It can be processed with the installation of the new methods and techniques that leads to
the beginning of the uniqueness in the operations (Verma, 2010).
CONCLUSION
The report prepared in the context of Dell the leading dealer of the hardware and software
in the old is having the widened customer base with the large stream of products and services. It
has gained the confidence and the loyalty of the customers through the bringing of continuous
innovation in all the segments of its working. From the report it can be articulated that Company
is using the business development model with the accurate use. Further, it enables the working to
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improve with certain inculcations such as better business strategy, product expansion,
internationalisation and related.
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REFERENCES
Books and Journals
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implementation, and impact. Routledge.
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UK community innovation survey on synergies between technological and organizational
innovations. British Journal of Management. 21(1). pp.187-206.
Brown, K. and Osborne, S. P., 2012. Managing change and innovation in public service
organizations. Routledge.
Brown, T., 2012. Design thinking. Harvard business review. 86(6). pp. 84.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers.Long range
planning. 43(2). pp.354-363.
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Menguc, B., Auh, S. and Yannopoulos, P., 2014. Customer and supplier involvement in design:
The moderating role of incremental and radical innovation capability. Journal of Product
Innovation Management. 31(2). pp. 313-328.
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Verganti, R., 2013. Design driven innovation: changing the rules of competition by radically
innovating what things mean. Harvard Business Press.
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Vila, M., Enz, C. and Costa, G., 2011. Innovative practices in the Spanish hotel industry. Cornell
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Online
Dell. 2016. [Online]. Available through:<www.dell.com>. [Accessed on 1st July 2016].
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