Dell has been following its unique direct build-to-order sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dells supply chain efficiencies and direct sales gave it a competitive advantage. Each system was designed according to the preferences of the customer and this option allowed customers to get systems at a price In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Recall of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Industry analysts felt that, with Dells competitors also improving their supply chains and matching Dells direct model, the company had been losing its competitive edge. Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Though Dell spruced up its product design and range, Apple is clearly far ahead of it. Many experts feel that such new initiatives will only distract Dell from its supply chain operations. Dells market share in U.S. and Worldwide (in Q1 2009) compared to other top PC makers

Answer the following questions:

1. Examine and analyze Dells Direct model and its basic working and outline three (3) objectives that could be set to ensure the success of this model.

2. Outline three (3) strategy and steps being taken by Dell it to recapture its lost market leader position

3. Describe three (3) future challenges that Dells Direct model could face.

4. Highlight three (3) of Dells evolving Supply Chain practices. (12 marks)