Strategies for Reverse Supply Chains in the Personal Computers Industry: How Dell and HP manage a dual business model comprising the forward supply chain of brand new PCs and the reverse supply chain of end-of-life PCs

Francesco Cottini

Student thesis: Master thesis

Abstract

The study explores how organizations competing in the personal computers (PCs) industry can manage a dual business model comprised of the forward supply chain of brand new products and the reverse supply chain of end-of-life (EOL) equipment, in order to maximize their profitability and supply chain efficiency. As a consequence of the WEEE directive, which became law in 2003 in Europe, producers of electrical and electronic equipment are responsible for recovering the used products in a responsible way from final consumers. The law, which has been approved also in other non-European countries like US, China and South Korea, has brought several challenges to firms in the PCs industry when dealing with the new business model. Moreover, in the logistics literature the topic has not been sufficiently deepened, resulting in confusion for both companies and researchers on how to simultaneously manage the two businesses in the most efficient way. Through a dual case study involving two of the leaders in the PCs industry, Dell and Hewlett-Packard (HP), the research explores the strategies implemented by the two companies for managing the dual business model and compares them based on their performance on selected indicators affecting the ROA. The study provides evidence that it is possible to succeed in the PCs industry not only by adopting a pure outsourcing strategy, as HP did, but also by following the example of Dell and internalizing some reverse supply chain activities. The research can therefore be viewed as an attempt for demonstrating companies in the electronic industry and researchers in the logistics and strategic literature that there are possibilities for handling reverse supply chain activities within the organizational structure. Moreover, it can represent a starting point for deepening the topic with the goal to identify a best-practice approach for companies in the electronic industry when managing the dual business model of forward and reverse supply chain.

EducationsCand.merc.smc Strategic Market Creation, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2013
Number of pages114