Dell INC Executive summary Is the dell's direct model working? Last year, the company gave up the PC market share lead to Hewlett-Packard. Dell was the only top computer company to lose worldwide PC market share. This analysis identified Dell's problems and provided strategic moves for the PC maker firm. Company Background The company was founded in 1984 by Michael Dell, now the company is one of the world's largest suppliers of personal computers and related products. It designs, develops, manufactures, markets, and services personal computers, servers, printers and other products. The company primarily operates in the Americas. It is headquartered in Round Rock, Texas and employs about 66,000 people. Dell's simple concept focus on selling personal computer systems directly to the customer in that way Dell could best understand their needs, and provide the most effective computing solutions to meet those needs. The company announced plans to begin selling through retail stores. Vision: Dell's vision is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. Recommendation for the vision statement: A vision statement focuses on the on how the world would be ideal without mention the organization. In this vision Dell mention its product, I recommend a vision that would say: There will be a personal computer for each individual in the world. Justification: Dell aspire that every individual in the world owns a computer. Computers are part of everyday life in the twenty-first century. Computers have changed the way humans work and live. We live in a world where technology is rapidly increasing, and new discoveries are being made every day. Comp... ... middle of paper ... ...III, the most common approaches are Market development and innovation, with these strategies Dell can broad its operations and introduced those in new segments or new customer groups. They have the necessity to invest more in innovation. More R&D, more and unique products will make the difference against the competition. References Pearce&Robinson, Strategic Management, 10e, 2007 McGraw-Hill Dell.com.2007 from: http://www.dell.com/content/topics/global.aspx/corp/en/commitment?c=us&l=en&s=corp By Jeordan Legon "is The Dude Steven Done For;Wednesday, October 16, 2002 Posted: 3:50 PM EDT (1950 GMT) from: http://archives.cnn.com/2002/TECH/internet/10/16/dude.dell/ Chang, Althea "Is All well with Dell?, August 17 2007: 2:20 PM EDT.From: http://money.cnn.com/2007/08/17/markets/spotlight_dell/index.htm Holzner, Steven, How Dell Does it, McGraw-Hill, 2006
Michael Dell is the founder and CEO of Dell Computers Inc. one of the largest sellers of personal computers in the world. His contribution to the computer industry is the “one-to-one relationship between the company and the customer— there are no intermediaries, no middlemen” (Krames, 2003, p.59). Not only did he relinquish the middleman, he also perfected combination of the bottoms up strategy and the just-in-time (JIT) by waiting till he received orders from the customer to build computers. In doing this, Dell increased its return on investment (ROI) while reducing its inventory overhead cost.
Success started at a young age for Michael Dell, he was only 12 years old when his first product catalog called “Dell’s Stamps” advertised in the local trade journal. He learned early in life to develop a direct relationship with the customer which later would provide the key to his success (Krames, p. 58). Andy Grove had teamed up with Bob Noyce, and Gordon Moore in 1968 after discovering they could create chips with massive memory. Grove used a metaphor to describe his foundation of success – a three-legged stool; execution and strategy (Krames, p. 137). When one leg is off, it throws off the whole system. Dell’s major accomplishment came when he planned and sold personal computers out of his dormitory room which lead to the creation of Dell Computers Corporation. At the age of 27, Dell was the Top CEO of a Fortune 500 company. He had clear ideas about how-to-do business.
A vision statement describes the organization as it would appear in a future successful state. When developing a vision statement, try to answer this question: If the organization were to achieve all of its strategic goals, what would it look like 10 years from now? An effective vision statement is inspirational and aspirational.
Dell’s main strength lies in their perfection of the Direct Model, which boasts a production process that lasts only a day and a half so the company is able to serve customers quickly and has the capacity to withstand very large orders. Dell built held no finished goods inventory on hand, which helps to reduce idle assets and risk. The company maintained excellent relations and communication with suppliers who were able to adhere to Dell’s just-in-time inventory management and allowed suppliers to send shipments direct to customers, reducing inefficiency. Dell encouraged suppliers to locate their facilities in close proximity to assembly operations. Additionally, Dell had very high customer service and support satisfaction and maintained some of the best performance metrics in the industry. Finally, their main source of revenue came from businesses and large government institutions and no single customer represented more than 2% of their sales, which lowers their risk of buyer power.
There are several current legal and regulatory aspects that face the company. The company has to meet the entire legal requirement and frame work of operating in computer technological industry as far as quality and price regulations are concerned. Dell has been able to meet the legal and standard requirements in the manufacture, distribution and promotion of its products. For instance it offers its products at reasonable prices that reflect the industry pricing regulations. The...
Dell Computer Company is known for its meteoric rise to industry dominance based on founder Michael Dell’s ability to transition a part-time business of building and upgrading personal computers into a multi-billion dollar enterprise (O’Rourke, 2010). Dell’s business model was producing low cost, high quality PC’s that were built-to-order called “Dell Direct”. The strategy of shipping direct to customers eliminated the need for middlemen and gave Dell a competitive advantage (O’Rourke, 2010). Company growth surged in the 1990’s with over 38,000 employees and a global platform. Dell and Chief Operating Officer, Kevin Rollins, created a fast-past, win-at-all-cost, highly competitive organizational culture whereby compensation and promotions were based on exceptional performance (O’Rourke, 2010). Finally, in 2000, Elizabeth Allen joined the company as vice president of corporate communications.
Dell Inc., with fiscal 2005 net revenue of $49.2 billion, is a premier provider of products and services worldwide that enable customers to build their information-technology and Internet infrastructures. Dell offers a broad range of enterprise systems (servers, storage, workstations, and networking products), client systems (notebook and desktop computer systems), printing and imaging systems, software and peripherals, and global services. During calendar 2004, Dell was the number one supplier of personal computer systems worldwide as well as in the United States. Dell's global market leadership is the result of a persistent focus on delivering the best possible customer experience by selling products and services directly to customers.
This being said, Dell is performing in the right direction and sales are increasing dramatically overtime as mentioned above, and the competition exist between the companies and that what makes Dell unique. The increase in sales between 2001 and 2004 proves the success for the organization.
Dell Inc, was founded as “PC’s Limited” in 1984 by Michael Dell, while still a student at the University of Texas at Austin, with just $1000. From Michael Dell's off-campus dorm room at Dobie Center, the startup aimed to sell IBM-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to customers, PC's Limited could better understand customers' needs and provide the most effective computing solutions to meet those needs. In that year, the company became the first in the industry to sell custom-built computers directly to end-users, bypassing the dominant system of using computer resellers to sell mass-produced computers.
Michael Dell founded the company Dell to offer network servers, workstations, storage systems, Ethernet switches, desktops, and notebook PCs after successfully selling his computers to customers directly in Texas. Over the course of three years his sales volume warranted the opening of an international sales office in 1987. In 1988 he began selling to large customers including several government agencies and Dell became a publicly traded company.
Why has Dell been so successful despite the low average profitability in the PC industry?
Within the successful planning and execution of every prominent business today is the underlying factor of operational management. Although in the early terms most companies that focused on this area were manufacturing companies, this innovative idea has struck cords into service and retail. From creating software to computers Dell has risen in the last 20 plus years to become one of the worlds leading technological innovators. In 2006 Dell achieved a pivotal goal and was named on the list of the Fortune 500 a coveted seat among all businesses.
Dell Inc. weakness was cell manufacturing because their assembled computers were being shipped five to six days after the order was placed. It is an inconvenience for the customers to always send their computer away to have it repaired. First, they are left without internet access. Second, the time it reaches Austin, Texas, have it repaired, and shipped back can take days. The company opportunities were the Dell U.K. that open business in 1987 and in that country it was a lot of companies selling cheap computers. Dell Inc. strides on loyalty among customers and employees, and that could only be derived from having the highest level of service and performing products. Segmentation within the company enables them to measure the efficiency of the business in terms of assets use. Dell Inc. evaluates their return on invested capital in each segment, compare it with other segments, and target what the performance of each should be.
Lenovo’s vision of creating “personal devices more people are inspired to own, a culture more people aspire to join and an enduring, trusted business that is well respected around the world” guides the company to become the world’s leading personal technology company. To achieve this, it plans to lead in the PC industry through product innovation and quality, with “an industry with an ecosystem of devices, services, applications and content for people to seamlessly connect to people and web content” , and thus become the best, most trusted and respected company to work for and do business with . This mission statement indicates the core intent of the
Dell’s initial competitive strategy, when it was founded in 1984 by Michael Dell, was to focus mainly on differentiation. Its strategy was to sell customised personal computer systems directly to customers, which was a rapidly emerging market at that time (1). This was done by targeting second-time customers, those that already understand computers and know what they wanted. Meanwhile other companies at the time was selling “’plain brown wrapper’ computers” (2). By offering customisations, Dell gained a better understanding of customers’ needs and wants. This helped the organisation position itself differently against the more popular brands, such as Compaq and IBM.