Indiv 3 - Walmart's and Dell's Successful Strategy

Dell and Walmart's advantage over their competition is not due to technology, it's due to management. Do you agree? How does your answer relate to some of the problems that these companies have had recently?

I agree that Dell's and Walmart’s advantage over their competition is not due to technology, but due to management. Their success is not coming from advanced technology.

For nearly five decades, Wal-Mart's has provided low-priced products to its customers. Wal-Mart does not have any special advantage in technology. Wal-Mart stores operate according to their "Everyday Low Price" philosophy. It mainly has advantage over its competitors because it has been better at containing its costs.

Dell is in a similar situation as Wal-Mart. Dell makes low-end computers, and does not use particularly advanced technology in comparison to its peers. Dell’s success lies mostly in its supply chain management, which enables the company to lower down its cost.

However, recently both companies have been experiencing problems because they have been sacrificing product quality in order to achieve lower costs. Walmart forces its suppliers to compete with each other to reduce their wholesale prices. The supplier then will turn back the loss to the manufacturer, which results in bad product quality. Eventually, this will affect consumers’ confidence on Walmart’s products.

Dell is facing the same problem. Outsourcing customer service and producing products overseas is causing a loss in confidence in their products and services.