Dell Company’s New Product Introduction Strategies

Risk and Financial Impact

The process of new product introduction (NPI) is associated with many challenges that may lead to the failure in NPI project completion or returning investment costs and bringing profit. The major risks related to DELL’s NPI include the ineffective mix of internal and external enterprises, lack of operational and managerial integration, sudden changes in the economic environment, and poorly defined project objectives.

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Figure 1: Risk Severity and Probability

Level of severity Level of probability Risk Reasons Factors Potential outcomes
High Moderate The shortfall in materials and components. Disruption of the supply contract terms. Unexpected situations at suppliers’ facilities, transport incidents, or suppliers’ irresponsibility. Production delays and declines.
High High Incorrect prediction of the situation in the market and obtainment of the wrong input data. The inefficiency of the forecasting system. Lack of continuous environmental monitoring, adverse environmental conditions, technological incidents, and loss of important resources. NPI project failure and production plan disruption.

The risk mitigation plan for DELL will be focused on risk avoidance, monitoring, and control as the major risk handling options. The recommended risk mitigation plan aimed at the prevention of failures in materials’ supply is the expansion of supplier contracts, establishment of trustful partnerships, and provision of benefits for suppliers. DELL needs to employ management tools, which will ensure a high degree of coordination of all internal and external activities.

The proper risk mitigation plan for DELL will also include periphery monitoring and assessment of internal and external environment regarding the cultural, economic, and operational aspects of performance, as well as resources’ availability, and work organization (Arthur D Little, n.d.). Through the analysis of these criteria, the company will avoid the risks associated with prediction errors and the disruption of production plans. Lastly, to prevent production failures, DELL should develop plans for technological development and adopt technological security initiatives.

Team Management Strategies

To employ the suggested risk management strategy, NPI activities at DELL should be rooted in increased objectivity and evidence-supported assessment of different organizational areas. Based on this, the most appropriate type of team for the successful project completion is a cross-functional team consisting of employees at the same level of professional hierarchy but serving in different organizational units (Grimsley, n.d.).

As mentioned by Weber, “a highly effective cross-functional team includes representatives from across the company” (2009, par. 3). Thus, DELL’s team should include stakeholders from many departments, including project and development management, customer service, technical support and engineering, IT, marketing, public communications, sales, finance, and accounting departments. The stakeholders participating in the cross-functional team will serve a dual purpose – they will be the representatives of their functional areas and, at the same time, they will communicate NPI-related objectives and goals back to their departments (Weber, 2009).

For the proper management of DELL’s cross-functional team, it is helpful to know what developmental stages it will pass because each stage is associated with different managerial objectives. The first stage is team formation. It implies the selection of personnel, distribution of roles, setting goals, and development of cooperation regulations (Belbin, 2010). In the second stage, the practical side of work starts, and some hidden conflicts may arise. Although these conflicts and lack of trust among the team members may not provoke significant damage, it is important to recognize them in order to increase team cohesion and achieve work stabilization at later stages of team development (Belbin, 2010).

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The stabilization of operations and recovery of trust is considered to have a positive effect of work, but it also may result in the decrease of temps of work and blurring of project objectives and vision. Therefore, at this stage, the manager needs to develop stimulation strategies, clarify and communicate project goals to all team members (Belbin, 2010). At the late developmental stage, the team becomes more flexible and workable. The maintenance of activities, management of authority, and ongoing refinement of objectives become the main managerial tasks.

A high level of synergy, multidimensionality of views, and creativity associated with cross-functional teams substantially support the process of NPI. However, they are related to significant challenges in creating team cohesion and leadership. It is observed that strong leadership is a key component of a cross-functional team management (Managing cross-functional team, n.d.). It is critical for the NPI success to convey the goals of the project to all team members and enforce the compliance with the plans for their achievement. To ensure it, the team leader should align the project objectives with the team members’ regular duties and their departments’ goals.

Total Quality Management (TQM)

TQM regards quality as an important success factor for sustainable organizational growth and development. It is grounded on a set of managerial principles aimed to apply resources in a way that increases stakeholders’ satisfaction with the provided service (Das, Kumar, & Kumar, 2011). Customer focus is considered one of the most significant elements of TQM practices because it is a crucial driver of quality improvement. Based on this, through the implementation of TQM principles, DELL may increase the quality of the new product and, in this way, add new customer values and establish good customer relationships.

Customer preferences are continuously changing, and management needs to evaluate the shifts in customer expectations on a regular basis and align business operations and strategic goals according to the identified changes (Cai, 2009). Implementation of the customer focus principle may allow DELL to become more committed to the development of competence and increasing flexibility, and thus more responsive and sensitive towards shifts in the market. In this way, it is possible to say that efficient customer-oriented strategies entail the generation of competitive advantages.

Quality is expressed through a number of requirements put forward by a consumer to a product. Specific requirements for the product characteristics enabling their implementation and verification serve as quality indicators, and organizations may implement a few tools for measuring these indicators of quality in order to improve own performance. The validity, ergonomic, technological, esthetical, and economic aspects of DELL’s product characteristics may be measured through such instrumental method of quality control as Ishikawa diagram.

This tool helps to identify the most significant factors that affect the final result (Cause and effect, n.d.). It helps to trace the correlation between causal factors (process parameters) and quality indicators. The information about the quality indicators for the construction of the cause-and-effect diagram can be collected from all available sources: activity and data monitoring logs, employee reports, focus groups, etc. When developing the diagram, it is important to select those factors of product quality which are the most important from a technical point of view. To increase the accuracy and credibility of data interpretation, the expert evaluation can be implemented. In case the diagram is well constructed, it allows the identification of potential factors of customer dissatisfaction.

References

Arthur D Little. (n.d.). Manage risk for product launch. Web.

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Belbin, R. M. (2010). Management teams: Why they succeed or fail. Amsterdam: Butterworth-Heinemann.

Cai, S. (2009). The importance of customer focus for organizational performance: A study of Chinese companies. International Journal of Quality & Reliability Management, 26(4), 369-379.

Cause and effect, fishbone, Ishikawa diagram. (n.d.). Web.

Das, A., Kumar, V., & Kumar, U. (2011). The role of leadership competencies for implementing TQM. International Journal of Quality & Reliability Management, 28(2), 195-219.

Grimsley, S. (n.d.). Cross-functional teams: Definition, advantages & disadvantages. Web.

Managing cross-functional teams: Balancing team needs and functional lines. (n.d.). Web.

Weber, S. (2009). Enabling cross-functional teams: A leadership role for product managers. Pragmatic Marketing. Web.

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StudyCorgi. (2021, June 7). Dell Company's New Product Introduction Strategies. Retrieved from https://studycorgi.com/dell-companys-new-product-introduction-strategies/

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