BSB119 – GLOBAL BUSINESS
TUTORIAL 11: GLOBAL PRODUCTION
Tutorial and assignment marks are available on Bb under Assessment
You can seek a review of your marks if you disagree with your result
In the final exam there is usually a question re this lecture
Consider location advantages – important “buzz term” to use in your responses to the questions
The case study describes Dell’s global manufacturing operations. Dell saw its revenues and market share rise in 2003
while other companies suffered. Dell credited its success to a cost structure that was the lowest in the industry as a
result of the efficiency of its global supply chain and manufacturing operations. However, by 2005, Dell had lost its
market dominance as it was rivals began to match its manufacturing cost efficiencies. To build a more sustainable
source of competitive advantage, Dell has turned to improving the quality of customer service. It hopes to exploit a
service to order business model just as it has relied on its build to order, direct sales model for its early success.
Large global operations – ground breaking in their use of technology. Only sell via the internet. Previously
used kiosks in major shopping centres. Are, now also sold via Officeworks.
Visit Dell’s website to look at the product.
Please read the case “Restoring DELL’s Competitive Advantage”, the closing case in chapter 13 (pp. 531 to 534) of
your textbook and answer the questions below.
1. What are the advantages to Dell of having manufacturing sites located where they are? What are the potential
In addition to its US location, Dell as manufacturing sites in Brazil, China, India, Ireland, Malaysia and Poland. These
manufacturing sites were chosen for low labour costs, the high productivity of the local workforce and their
proximity to important regional markets. Certainly, by relying on foreign operations, Dell is vulnerable to political
and economic factors which could disrupt production.
Nations have been chosen with specific ideas
Consider education levels
2 operations in the EU – could be to ensure company avoids tariffs
Produced locally – people like this. Gives brand and product credibility.
All of these places would have “location advantages”
Labour = skilled, cheap, size of the work force, availability
o Write a few sentences on these factors
o You do not need to know stats for the final exam – use general knowledge. EG South East Asia has a
big work place with little regulation
Suppliers – closer to supplies geographically, more suppliers, quality of suppliers, cost of supplies
Mention info regarding high value to weight and low value to weight here
Political and economic factors – struggling. Eg Dell in Ireland, product might be moved to Poland.
Eg Greece was badly impacted by the GFC. Decentralisation and diversification allows you to move to suit