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.
Background Information In implementing a strategic plan for Coastal Medical Center, our consulting team has conducted many analyses and formed numerous strategies in order for Coastal Medical Center to be successful. Such assessments include an internal analysis, external analysis, gap analysis, and SWOT analysis. In conducting these analyses, our consulting team was able to better understand the internal environment, external environment, where the organization currently stands in terms of performance, and the major strengths, weaknesses, opportunities and threats that oppose the Coastal Medical Center. From our inquiry, we will be able to establish a strategic plan that best fits the organization’s needs.
After analyzing the Coastal Medical Center, it is apparent that the employees and staff have no conception of the mission, vision, and values of this health care facility. In addition to this lack of structure, CMC has many projects in the midst of production that lack support of a common goal, employees are unsatisfied with their jobs, the two boards lack ability to agree on strategic decisions for the organization,, and the medical center has a dismal reputation when it comes to quality care.
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...
Thompson, Arthur, John Gamble, John Gamble, A. III, and Alonzo Strickland. Strategy. McGraw-Hill/Irwin, 2005. 299. Print.
1. How and why did the personal computer industry come to have such low average profitability?
For many years, IBM succeeded in holding a very good market position. In fact, the company achieved a very high market share and huge profits. However, this situation did not last forever. In 1990, IBM experienced its first quarterly loss of $2billion due to some unexpected accounting charges. However, revenues increased from $62.7 billion in the previous year to $96 billion. In 1991, the c...
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.
• Hitt, Michael A; Hokisson, Robert E.; Ireland, RD. Strategic Management. 6th Ed., Masson, Ohio: Souht. Wester 2005.
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.
Dell Computer have recently announced changes to their business strategy and supporting supply chain. They will no longer focus on a made to order direct sales model for their personal computers. Nor will they continue to refine their renowned supply chain model that supported their sales model. Instead, they will be looking to produce personal computers with fixed configurations at lower prices. This essay looks at why Dell have changed their strategy, and then considers the customer value proposition of the new strategy, as well as lessons that other organisations can learn from the Dell experience.
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.
If asked what strategic planning is one could interpret it as simply a road map that can guide the organization in the right direction. It is very unlikely that an organization would know which direction to take without a sense of direction. Managers are faced every day with decisions that have a major impact on the direction the organization must take, therefore, strategic planning can play an important role in guiding managers in the right direction. In other words strategic planning is a tool that management can use to give them a sense of direction that will guide them in doing a better job and to ensure that all the members of the organization are working toward the same goals
Dell have used their internal resources and competences as a way of gaining a competitive advantage to great effect over the past few decades. There are three basic resources: tangible assets, intangible assets and organisational capabilities. Dell’s greatest resource in generating a competitive advantage has been their direct model approach to sales. This direct model approach means that customers buy directly from Dell through their website. The advantages this brings are that the customer can customise their product, buying exactly what is right for them. Whereas competitors offer the customer the choice of number of models, Dell allow the customer to choose exactly they want. Dell’s direct model means that Dell does not have to sell via
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.
The lack of success at Omega, Inc. rested in the hands of an incompetent sales staff who were not informed of the company’s mission statement and goals. The staff received limited training on the jobs they were to perform. Omega was faced with the challenge of getting the employees to achieve their sales quotas. According to (Aguinis, 2007), “There are two important prerequisites required before a performance management system is implemented: knowledge of the organization’s mission and strategic goals and knowledge of the job in question.” The benefit of superior knowledge of the organization combined with clear and agreed upon mission and strategic goals of their unit would afford employees the opportunity to make contributions that will have a positive impact on the organization as a whole. In addition, one must possess the knowledge of the job in question to execute the tasks necessary to be done and how they should be done. This knowledge is obtained through a job analysis. Omega failed to implement strategic planning throughout all the franchises. According to Aguinis (2007), “Strategic planning allows an organizati...