Dell Case Study

Topics: Dell, Personal computer, Strategic management Pages: 8 (2581 words) Published: June 28, 2010
Dell Inc is a multinational information technology corporation based in Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Dell was founded in 1984 with only $1000 by Michael Dell, the chairman of the Board of Directors and chief executive officer, on a simple concept: : by selling computer systems directly to customers, they could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. Their evolving business strategy combines their revolutionary direct customer model with new distribution channels to reach commercial customers and individual consumers around the world. In 1992, Mr. Dell became the youngest CEO ever to earn a ranking on the Fortune 500. In my report, I will try to analyze the crafting and executing strategy of Dell Incorporated I. Evaluation of Michael Dell’s performance……………………p1 II. Elements of Dell’s Strategy…………………………………….p3 III. Financial analysis……………………………………………….p7 IV. SWOT analysis reveal about the attractiveness of Dell………p11 V. Recommendations………………………………………………p14 I. Evaluation of Michael Dell’s performance

As the leader of the Company, M. Dell has developed a new style of management based on both technical knowledge and marketing know-how. He had lot of good marketing ideas that allow the company to be a strong competitor on the I.T. especially in PCs, internet and e-commerce practices. He was very clever when he choose to use a social strategy that allows him to motivate people winning their loyalty and respect. He was also considered as a very accessible CEO because he chooses to delegate authority to subordinates. Michael Dell justified his excellent performance by performing well in all the five areas of Crafting & Executing Strategy. He formed a strategic vision for Dell which had five tenets: * A direct relationship is the most efficient path to the customer; * Allowing customers to purchase custom built products and custom-tailored services is the most effective way to meet customer needs; * Non proprietary, standardized technologies deliver the best value to customers * Searching a low-cost structure where cost savings can be passed along to customers in the form of lower prices; * Dell should endeavor to deliver added value to customers by: researching all the technological options, trying to determine which ones are "optimal", and being accountable to customers' for helping them obtain the highest return on their investment in information technology (IT) products and services. These five tenets were the key to delivering a superior customer values. He made sure that all company executive believe strongly in those five tenets. Under his leadership he developed the business model which uses the company's strong capabilities in supply chain management, low cost manufacturing and direct sales capabilities to expand into product categories where Dell could provide added values to its customer in the form of lower prices. Under his leadership, Dell has become the low-cost leader using his business model and strategy. II. Elements of Dell’s Strategy

In accordance with five tenets, Dell's strategy had six core elements:(1) a cost-efficient approach to build-to-order manufacturing,(2) partnerships with suppliers aimed at squeezing cost savings out of the supply chain,(3) direct sales to customers,(4) award-winning customer service and technical support,(5) customer-driven R&D,(6) emphasis on using standardized technologies, and product-line expansion aimed at capturing a bigger share of the dollars, its customers spent for IT products and services. 1. Cost-Efficient Build-To-Order Manufacturing

Dell built its computers, workstations, and servers to order; none were produced for inventory. Dell customers could order custom-equipped servers and workstations according to the needs of their applications. Dell was regarded as a...
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