Dell, Inc. got its start in 1984 when Michael Dell, a University of Texas student, began building computers for fellow students under the company name PCs Limited (Edwards, 2007). Within the next decade, Dell experienced phenomenal success by pursuing growth through catalog and corporate sales (Hunger, 2006). Dell made technology affordable and in doing so became a fierce competitor in the computer technology industry. However, the company’s disorganized structure could barely support their impressive growth. There are three specific measures of performance that I would have incorporated into Dell’s strategic management plan if I were leading Dell. Furthermore, I would include behavior and output controls in the control system to regulate organizational activities to ensure that they are consistent with company standards of performance. Dell, Inc. pursued an aggressive growth strategy which was met with equally aggressive customer demand. Dell delivered a quality product for a reasonable price and this value that Dell created for their customers was initially unmatched by rival computer companies. In fact, Dell saw this as an opportunity to expand their product line to include items such as printers and software. The company’s sales increased from $389 million in 1989 to $2.9 billion in 1993 (McGraw, 1994). However, the management structure did not grow with the company (McGraw, 1994). Financial results were not analyzed properly and the company was not being strategically managed (Hunger, 2006). Dell’s management team decided to slow their growth initiatives in part by eliminating retails sales of their products (Hunger, 2006). This decision created three distinct problems for the company. First, customers were unhappy that t... ... middle of paper ... ...nagement (6th ed.). Mason, OH: South- Western Cengage Learning. Edwards, O. (2007, August). Baby Dell. Smithsonian, 38(5), 34-36. doi: 131320451 Hunger, D. J. (2006). Dell, Inc. In T. L. Wheelen & J. D. Hunger (12th ed.), Strategic management and business policy (pp. 31-1 – 31-5). Upper Saddle River, NJ: Prentice Hall. Matthews, J. R. (2011). Assessing organizational effectiveness: The role of performance measures. Library Quarterly, 81(1), 83-110. Retrieved from EBSCOhost. McGraw, D. (1994). The kid bytes back. U.S. News & World Report, 117(23), 70. Retrieved from EBSCOhost. Rogers, B. (2006). High performance is more than a dream - it's a culture. T + D, 60(1), 12. Retrieved from EBSCOhost. Wheelen, T. L., & Hunger, J. D. (2012). Strategic management and business policy: Toward global sustainability (13th ed.). Upper Saddle River, NJ: Prentice Hall.
Best Buy, a 47 year old business, has faced countless challenges over the years. While Best Buy’s reputation has fluctuated, the company has presented several strategies to deal with these problems by creating plans to stabilize and promote growth. Through an in-depth analysis, the following areas were studied performance, environment, and organization. The analysis will assist in examining Best Buy’s strategies and core competences. The objective of this study is an understanding of the challenges and to figure out what makes the organization successful.
After conducting a basic 10 year financial analysis of the company, it has become evident that even with a highly competitive market structure they are able to improve on their performance. Ranging from 2004 to 2013 financial information, the company has shown a significant increase in their sales revenue roughly $3865 million sales in 2004 to almost four time that valuing $12970 million in 2013, which was an “increase of 10.4% over the 53 week prior year” The company’s growth strategy has been to diversify its product market and make them...
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.
In business, the mantra that success comes to those who can recover from setbacks is widespread all over the world. One of the organizations that poignantly illustrate this element is Costco. Costco is a warehouse firm that was founded in 1976 in San Diego. Although many people may envy the company as its owners enjoy huge success in the warehouse and retail industry, what the majority of individuals do not know is that in the first year of operations, Costco lost $750, 000, but after 3 years, the company had $1miilion in profit, 900 employees, and 200000 members. This shows that in business, the strategy can be the difference between success and failure. This essay describes how Costco has undergone evolutionary changes from its inception
Qiang, L., Maggitti, P. G., Smith, K. G., Tesluk, P. E., & Katila, R. (2013). Top Management
Before we start, we would like to briefly introduce the definitions of Supply Chain and Supply Chain Management (SCM).
Dell Computers Strategy Global companies play an important role in the business environment, because they connect their businesses together around the world. A good example of a global company is Dell Inc., an American computer-hardware company, headquartered in Austin Texas, which develops, manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. They design, build and customize products and services to satisfy a range of customer requirements: from the server, storage and Premier Services needs of the largest global corporations, to those of consumers at home. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue.
• Hitt, Michael A; Hokisson, Robert E.; Ireland, RD. Strategic Management. 6th Ed., Masson, Ohio: Souht. Wester 2005.
Dell made the bold decision in 1994 to eliminate their products from retail stores and focused on mail order customers. In 1996 Dell began selling through their website as well. By eliminating the retail store presence Dell was able to reduce costs, reduce inventory, and maximize profit. Dell utilized a built to order system that allowed customers to specify exactly what they did and did not want on their Dell computer. Dell's just in time inventory system lowered inventory to 6 days and storage costs were saved.
Why has Dell been so successful despite the low average profitability in the PC industry?
According to Michael Cannon, Dell's President of Global Operations, the key differentiators that have made Dell so effective for nearly two decades are its made to order direct sales model and its innovative supply chain (SCN, 2008).
The article raises the issue of revenue growth stalls that affect even the most successful companies. The article focuses on four major causes of the crisis. The first cause is the premium-position captivity that is”the inability of a firm to respond effectively to new, low-cost competitive challenge or to a significant shift in customer valuation of product features” (p.54). The second reason is the innovation management breakdown that is”some chronic problem in managing the internal business process for updating existing product and services and creating new one” (p.56). Third reason is the premature core abandonment that means “the failure to fully exploit growth opportunities in the existing core business” and “acquisitions of growth initiatives in areas relatively distant from existing customers, products, and channels”(p.56). Finally, the fourth cause is the talent bench shortfall that is “a lack of leaders and staff with the skills and capabilities required for strategy execution” (p.58). Authors emphasize that these causes are mainly within management control since they result from “a choice about strategy or organizational design” (p.54).
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.
18. Rugman, Alan M. and Collinson, Simon. International Business 4th Edition. Essex : Pearson Education Limited, 2006.