Business Degree Certification Practice Test

What competitive advantage did Dell Computer Co. achieve by assembling computers post-payment?

1. Increased quality

2. A competitive advantage

3. Increased responsiveness

4. Increased innovation

The correct answer is: A competitive advantage

The competitive advantage achieved by Dell Computer Co. by assembling computers post-payment primarily revolves around the concept of build-to-order or build-to-demand. This approach allowed Dell to effectively manage its inventory and reduce costs associated with unsold products. By waiting until after a customer had made a payment to assemble a computer, Dell minimized the risk of excess inventory and could channel resources more efficiently. This strategy also facilitated customization, as customers could specify their preferences directly before the computer was assembled, ensuring that the final product met their exact needs. This level of responsiveness to customer demand, combined with a focus on efficiency, gave Dell a notable edge over competitors who offered standardized products without the option for customization. Their model not only reduced waste associated with overproduction but also enhanced customer satisfaction through personalized products, solidifying their competitive position in the market. In summary, this practice was a strategic move that created a distinct competitive advantage by aligning production closely with customer needs and preferences, thus optimizing the overall business model.