In this assignment, we focus on comparing Chapter 2 and 5 taken out of J.A. Krames’ book, What the Best CEOs know: 7 Exceptional Leaders and Their Lessons for Transforming Any Business (2003). We are introduced to two great computer technological CEO’s; Michael Dell, founder & CEO of Dell Computers and Andy Grove, cofounder and former CEO of Intel. Dell is well-known for personal computers and Intel is famous for its microprocessors that are put into computers and devices for memory.
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.
Both CEO’s were able to save their companies from suffering major reverses. Yet, each company received their own strategic inflection points and applied different strategies to get their competitive advantage according to Krames. Both men suffered resistance in presenting and promoting their ideas. Dell faced resistance from his management teams. The management teams forced thei...
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...ustomers are able to customize their computers and order on-line cutting out the middleman and inventory.
The story of these men’s lives is inspiring for a new entrepreneur or innovator to use as an example for effectiveness in business. These two CEO’s would make a good team if they joined forces. Each company has to find their own niche and the business model that works for them. The key to both of these CEO’s success was listening to the customer. Krames also mentioned that it is important to remember the none customer as well. It took strong dedication and devotion of these two men to keep their focus on their company’s mission and vision. Both Chapters illustrated the healthy fear a company faces and satisfy the market (Krames, 2003).
Works Cited
Krames, JA. (2003). the Best CEOs know: 7 Exceptional Leaders and Their Lessons for Transforming Any Business
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Dell Inc. has realized that the most efficient path to the customer is through a direct relationship, with no intermediaries to add confusion and cost. With the power of their direct model and their team of talented people, they are able to provide to their customers high-quality, relevant technology, customized systems, superior service and support, and products and services that are easy to buy and use. HISTORICAL REPORT 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 aims 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.
CEO Johnston also has plans to bolster the company’s leadership with the best minds available and also use motivational techniques to invigorate his employees. These ideas show the character of the CEO in enhancing productivity from his work force.
Historically, personal computer companies produced most of the components for a computer which they assembled into their final products and distributed to resellers. The manufacturing of these components was vertically integrated into the organisation. Dell, as a small start-up, could not build this infrastructure. Instead, they developed a model where they developed relationships with organisations that could provide these components, allowing Dell to focus on selling and delivering computers. By selling directly to customers, initially through mail orders and later by using the internet, Dell avoided reseller mark-up. Dell also enabled customers to order customised computers, which Dell then assembled after receiving the order (Magretta, 1998, p.73-74). “Customers got exactly the computer they wanted and Dell saved money making the computers only when they were ordered” (Hill & Seggewiss, 2008)....
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Kouzes, J. M., & Posner, B. Z. (2012). The leadership challenge: How to make extraordinary
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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.