...DELL'S STRATEGY IS AN UNCONVENTIONAL APPROACH. • 1984 The company becomes 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. • 1986 Dell unveils the industry's fastest-performing computer, pioneers the industry's first thirty-day money back guarantee, and offers the industry's first onsite service program. • 1996 The company's quiet bid to sell custom-built computers over the Internet quickly becomes a public revolution when the company announces that sales over www.dell.com have exceeded $1 million per day. Dell introduces also its first custom custom-made web links for customers. Called "Premier Pages", the links allow customers to tap directly into the company's own service and support databases. 1998 Dell establishes web-based connections with its suppliers to speed the flow of inventory and quality information ================================ THE THREE GOLDEN DELL RULES Disdain inventory Always listen to the customer Never sell indirect ===================================== DELL COMPETITIVE STRATEGIES • Speed to market • Superior customer service • A fierce commitment to producing consistently high quality, custom-made computer systems that provide the highest performance and the latest relevant technology to the customers An early exploitation of the INTERNET. ========================================== ...
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...A CASE STUDY PRESENTED BY: MELWIN G. MENDE MBA -2 MARKETING MANAGEMENT BA213 III. EXECUTIVE SUMMARY Dell computer was founded by Michael Dell at age of twenty one in his dorm at the University of Texas, Austin. Dell’s strategy is to build computer so that it can be order by the consumers. It’s build to order strategy has made Dell the most successful company in the information technology field. Dell sells its machines and other equipments directly to customers so it has eliminated the middleman. Dell has high margin because of direct sale strategy and customers get excellent state of the art machines at low cost compare to Dell’s competitors. Michael Dell’s visionary leadership has made Dell the second most successful PC maker in the industry. (IBM is the leader). Dell’s ability to adapt to changing circumstances is its great strength. One week after the September 11th 2001 attack, Dell reported selling 24,000 servers and desktops. Dell established mobile technology park in Washington D.C. and New York by converting three eighteen wheel trucks and operated its factories round the clock to fulfill the unexpected customers demand. The trustworthy relationship between Dell’s management and work force made it possible to change the disastrous moment in the I.T industry to a great opportunity for the organization. Dell has very user friendly web site and half of Dell’s sale, half of tech support and three quarter of order status...
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...Dell Computers[1] Introduction Dell Computers was founded by Michael Dell in 1984 and has its corporate headquarters in Round Rock, Texas. Michael Dell’s winning idea was to sell computer systems directly to customers, allowing him and his company to understand customer needs well and therefore to provide the customer with the most appropriate computing solutions. Dell still practices the direct business model, saving time and cost by bypassing retailers and passing on the cost savings to the customer. Dell takes pride in its ability to provide customers with the most up-to-date technology more quickly than its competitors that still rely on slower indirect distribution channels. Dell has a major presence on the internet, having launched dell.com in 1994. By 1997, Dell was generating $1 million daily in online sales – the first company to achieve this mark. At dell.com, customers can put together their own computer system, order it online, and track its flow from manufacturing to shipping. Dell also offers its premier.dell.com Web pages, allowing business and institutional customers to conduct online business. Currently, Dell receives about two billion page requests per quarter, covering 81 country sites, 28 languages and dialects, and in 26 different currencies. The Computer Industry The market for personal computers has been growing rapidly for several years with little end in sight. As of the end of the year 2000, approximately 120 million PCs...
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...Executive Summary: Ford Motor Company was incorporated in 1903 in Michigan,USA by Henry Ford and 11 partners with a starting capital of 28000 US $ in cash. The company witnessed tremendous growth and became one of the top three car manufacturers in North America. Sales reached 150 billion $ in 1996 with a total of 370,000 work force worldwide. The company stayed innovative and progressive in its strategy and business model. In the 1970's, the car market became more competitive with the Japanese manufacturers like Toyota and Honda gaining grounds in the auto market worldwide by producing high quality vehicles with extended life time. In 1999 Ford acquired the Swedish company Volvo to establish a foot hold in Europe and launched a campaign called "Ford 2000"to reengineer the company infrastructure and IT strategy that aimed at reducing their vehicle centers to 5 worldwide and requiring information technology to be the driving force and the link between the various company divisions. In doing so, Ford was trying to build a model similar to the one adopted by Dell computers to improve supply chain and delivery times. Dell launched the "direct business model" or "virtual integration" where Dell contracted with reliable suppliers to produce and assemble hardware and software for its computers and note books and tried to sell its products directly to organizations and individuals through the internet by cancelling the role of the retailers or intermediaries. I recommend the implementation...
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...Although a number of factors influenced Dell’s decision, one of them was the generous incentives that Governor Antonio Britto of the relatively centrist Partido do Movimento Democratico Brasileiro (PMDB) had offered Dell. Rio Grande do Sul was one of the most prosperous states in Brazil with standard of living quite high. But suddenly political climate in Rio Grande do Sul changed all together. Olivio Dutra of the Partido dos Trabalhadores (PT, or Workers’ Party) was appointed as new governor of Rio Grande do Sul and he appeared likely to rescind all the agreements made by the previous government with Dell. He considered all the agreements to be overly generous incentives offered to transnational corporations by the previous government. This was a setback for Dell Computer Corporation and Keith Maxwell had to decide amongst the three options. The second option available to Dell Computer Corporation is to move its plant to another state in Brazil. After numerous discussions on site selection Rio Grande do Sul, had been selected as site for plant location. Determined to win high technology investment in the state Antonio Britto of Partido do Movimento Democratico Brasileiro offered best investment alternatives to Dell. But appointment of Olivio Dutra as new governor of Rio Grande do Sul foiled all the plans.Olivio Dutra was against governments granting of incentives to foreign transnational corporations. This is one of his objections against Antonio Britto’s government in his...
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...Dell, Inc. A Strategic Management Case Study October 8, 2013 Sophie Yanez University of the Incarnate Word Table of Contents I. Introduction II. Dell’s Strategy a. Vision Statement b. Mission Statement c. Strategies and Objectives III. Recommended Vision and Mission Statements IV. External Assessment a. Porter’s Five Forces Model b. External Factor Evaluation c. Competitive Profile Matrix V. Internal Assessment a. Value Chain b. Internal Factor Evaluation VI. Porter’s Five Generic Strategy VII. SWOT Analysis a. SPACE Matrix b. Boston Consulting Group Matrix c. Internal-External Matrix VIII. Strategy and Objective Recommendations IX. Recommended Implementation Plan X. Strategy Review and Evaluation References Appendixes I. Introduction Dell was founded in 1985 under the name, PCs Limited by Michael Dell who at the time was a college student of the University of Texas. In 1988 the company’s name was changed to Dell Computer Corporation. The company is headquartered in Round Rock, Texas and is the world's #3 supplier of Personal Computers (PC) behind HP who ranks as #2 and Lenovo who ranks as #1 (According to IDC worldwide quarterly PC tracker). Dell provides a broad range of technology products for the consumer, education, enterprise, and government sectors. In addition to its line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, ethernet switches, and peripherals, such as displays and...
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...Ford is one of the leading companies in the auto industry. The director of Supply Chain Systems at Ford was put in a tough position to make recommendations with regards to the company’s supply chain strategy. There are two groups within Ford that have two different opinions on how Ford should be using emerging information technologies and ideas from high tech industries, such as Dell, to change the way it interacts with suppliers. The first group argued that Ford should adopt Dell’s business model to improve efficiency and increase profits. This group emphasizes that Ford’s virtual integration should be the blueprint for what ford should attempt. On the other end, the second group believes that Ford and Dell operate in two different industries and it is not feasible to adopt Dell’s business model. This case study will demonstrate the toot causes of the problem and will present the reason why Ford should pursue with the mixed approach. Some of the solutions in the mixed approach are based on Dell’s business model, while the rest are not. These solutions are costly and time consuming, but Ford will eventually harvest the benefits of this approach. Issue Identification Teri Takai, Director of Supply Chain Systems, is about to make critical recommendations to senior executives on Ford’s usage of emerging information technologies and ideas from high tech industries to alter the methods Ford interacted with suppliers...
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...manufacturing and logistics cost, the manufacturing solution to best minimize the issues, and address the chipset supply concerns In addition, the business process improvement methodology will be reviewed, supply changes recommended, and the application to other industries and work environments. The L5 manufacturing and logistics process includes the assembly of the desktop PC chassis, floppy disc drive, fan, and depending on chassis configuration, the power supply. On the other hand, the L6 process includes all the processes in L5 plus the installation of the motherboard in the chassis. Currently, Dell suffers from the inability to provide contract manufacturers sufficient motherboards in a timely fashion. Several factors contribute to Dell’s inability to provide sufficient motherboards: chipset supplier decommits or supplier issues, quality and engineering issues, Dell forecast accuracy, and new product introduction (NPI). Bakker, Zheng, Knight, and Harland (2008) comment, “When operating in a volatile market ‘agility’ is required and information technology is focused on exchange of demand information, whereas in a stable...
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...In te r n a ti o n a l J o u r n a l o f M a n a g e me n t C a s es BOOTSTRAP FINANCING: FOUR CASE STUDIES OF TECHNOLOGY COMPANIES EVA M.TOMORY UNIVERSITY OF TORONTO, CANADA Abstract Innovative businesses, especially in the early stages of their life cycles, often encounter difficulty in obtaining long-term external financing. Their founders tend to seek financing through nontraditional bootstrapping methods to launch their ventures. Bootstrap financing refers to a range of creative ways to acquire resources without relying on borrowing money or raising equity from traditional sources (Freear et al., 1995a). The paper examines how successful technology entrepreneurs used bootstrap financing: the founders of Microsoft Corporation, Apple Inc., Dell Inc. and Research in Motion Ltd. The research investigates the elements of bootstrapping as described in Freear et al. (1995a) and in Winborg and Landström (2001), finding that entrepreneurs use bootstrapping extensively during the early stages of growth for both product and business developments. Bootstrapping methods change as the business develops with certain methods used more at the beginning of the life cycle, and different variations used as the business starts to grow. The study also points out that even the most successful technology-based consumer goods businesses relied on bootstrap financing at the early stages of their development. This technique deserves more attention from the scholarly community since it is certain...
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...its annual “Top 20” list of the most admired companies in the United States, In 2007 Dell Inc. ranked 34th and 8th respectively on the equivalent lists for the year. A 2006 identified Dell Inc. as one of 38 high-performance companies in the S&P 500 which had consistently out-performed the market over the previous 15 years. History Background and Origins While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as PC's Limited with capital of $1000.[5] Operating from Michael Dell's off-campus dorm-room at Dobie Center [1], the startup aimed to sell IBM PC-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. Michael Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family. Important Events and Milestones For Dell...
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...Objective……………………………………………………………………………….7 Strategy...........................................................................................................................7 Financial Performance ...……………………………………………………………..13 Dell’s Evaluation……………………………………………………………………..15 Recommendation……………………………………………………………………..22 Conclusion…………………………………………………………………………….23 References…………………………………………………………………………….25 Abstract This case study examines the marketing strategy and innovation practiced by the Dell Computer Corporation IT details the history of the company which made its way in the industry by building custom configurations of personal computers. A major theme of this case is Dell’s build-to-order strategy which has been a success in marketing as well as an overall strategy in supply chains across the country. This case details how well Dell has cornered the personal computing home office market and also the manner in which it derives a substantial amount of its revenue from its small business clients. It also addresses potential problems in Dell’s strategic management and possible solutions to help them stay on top. Introduction History Dell was founded in 1984 by Michael S. Dell, a student at the University of Texas, who with $1,000 dollars in capital starting selling custom built computers for customers looking for a lower cost alternative to more mainstream systems. He worked out of his dormitory room, and would later drop out of school to pursue...
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...Strategic Management & Case Analysis Department of Business Administration Sylhet International University, Sylhet Submitted by: Shakhor Ranjan Dash Roll No. 11382 MBA 2-2 Submitting Date : 30.11.2012 Dell Case: Question 1 :: What are the advantages to Dell of having manufacturing sites located where they are? What are the potential disadvantages? Answer: Dell’s manufacturing sites are in Brazil, China, Malaysia, Ireland, and the U.S. Advantages of these locations are that some of them are low cost (Brazil, China, Malaysia and, relatively, Ireland), they have educated work forces that are highly productive, and they are near large regional markets. Dell Case: Question 2 :: Why does Dell purchase most of the components that go into its PC from independent suppliers, as opposed to making more itself? (Does does little more than final assembly of components into PC) Answer: Dell outsources because it enables Dell’s business model to be successful. Dell’s comparative advantage is in pricing, customization and rapid order fulfillment, all advantages gained through supply chain management and logistics. By outsourcing, Dell does not carry risks connected to inventory such as obsolescence, Dell can maintain flexibility in its manufacturing, and Dell has lower coordination costs than if it were vertically integrated, producing its own parts. Outsourcing allows Dell to focus on what it does best. Dell Case: Question 3 :: What...
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...Department of Information and Computer Science, University of California, Irvine, Irvine, California, USA Keywords The exceptional performance of Dell Computer in recent years illustratesan innovative response to a fundamental competitive factor in the personal computer industry—the value of time. This article shows how Dell’s strategies of direct sales and build-to-order production have proven successful in minimizing inventory and bringing new products to market quickly, enabling it to increase market share and achieve high returns on investment. The Dell case illustrates how one business model may have inherent advantages under particular market conditions, but it also shows the importance of execution in exploiting those advantages. In particular, Dell’s use of information technology (IT) has been vital to executing both elements of its business model—direct sales and build-to-order—and provides valuable insights into how IT can be applied to achieve speed and exibility in an industry in which time is critical. Many of the insights gained from this case can be applied more generally to other time-dependent industries, suggesting that the ndings from the Dell case will have implications for a growing number of companies and industries in the future. build-to-order, business model, clockspeed, customer relationships, Dell Computer, direct sales, distribution channel, information technology, time-basedcompetition, virtual integration “It isn’t so much that we have a new economy...
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...QUESTIONS 1. Identify and describe all the different types or forms of innovation exemplified in this article by explaining with data and facts from this case. Product Innovation (the development of an improved product) Dell is the only computer company which offers its customers the built-to-order model. The customers can choose which components they want to have in their computer and can adapt it to their needs. Process Innovation (the development of a new manufacturing process) Dell has brought a maniacal focus to shaving minutes off the time to assemble and ship a computer. By studying videotapes of "the build," as they call it, factory managers have slashed in half the number of times a computer is touched by workers. They've counted the screws in a PC and redesigned it so that the major components simply snap in place. The entire process, from the time the order is taken to when the finished PC exits the factory, is wrapped up in four to eight hours. Organizational Innovation (a new internal communication; introduction of a new accounting procedure) Dell has a very good communication. As they standing under so much pressure regarding to the fact that they have no inventory, they have to have this skill. There is even a round-the-clock communication with the parts makers overseas existing, which helped them to handle with the lockout in 2002. Without this communication they had never managed it through it. With the built-to-order principle Dell has also...
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...companies to change accordingly by acquiring new companies and widening their capabilities, while Dell has remained stagnant. The evolved industry requires innovation in multi-technological products and services, incorporating the Internet and mobile devices, in order to stay competitive in the market. Cliff Edwards’ article “Dell’s Extreme Makeover” points out that while Hewlett-Packard, Apple, and IBM successfully adjusted to, and even in some regards initiated, the industry’s progression, Dell has fallen back due to its lack of focus and stubborn tactics. In response, the company reinstated founder Michael Dell as its CEO in January of 2007. Dell, in light of these events, returned to his own company with the attitude of a newcomer, aspiring to completely restructure the business and drastically shift its focus towards flexibility, awareness, and innovativeness. During its flourishing stage, Dell Inc. was largely successful because of its ability to sell customizable computers directly to customers at unbeatable prices. In essence, Dell derived its competitiveness from specialization. However, with the rapidly changing technological industry, what was once Dell’s biggest strength has simply become a limitation in the newly emerged market and plunged the company from a $100 billion juggernaut to a $30 billion dinosaur. While the company is among the best at making personal computers, it is unable to rival its competitors in other emerging sectors of the industry. This caused Dell...
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