1. What is your evaluation of Michael Dell as CEO? How well has he performed the task of strategic management discussed in Chapter 1?
Strategic Management Tasks
- Analyzing External Environment
- Analyzing Company resources and Position
- Knowing Which strategy to Apply
- Identify Opportunities
- Select Right Business Model
M. Dell started his business when the market for the computers was still growing very fast thou it already was dominated by big players with the strong brand image such as IBM. Even thou he did not have the resources to compete with such strong competition he had the vision that some day his company may be the market leader.
His success was based on finding the opportunity to produce the computers at lower cost then IBM and sell directly to customers by omitting the retailers. His company was growing fast, although not without the problems. The case states that during the early nineties the company "hampered by growing pains- specifically, a lack of money, people and resources"(Thompson 216). Dell had the vision, knew market well, and had a good business model but he had the problem with controlling the company growth and getting more production capacity. Finally, these problems were overcome and Dell Corporation became a public company. One more thing that is worth to notice is that even thou Dell was so successful he also made some mistakes, the example is provided by textbook. In 1990, Dell started selling through the retailers and abandoned the initial strategy of selling directly to customers and it went four years when he finally realized that it was a mistake.
In 1996, Dell started to sell his computers to individuals over the Internet. He was able to see the opportunity for growing the market of tech savvy customers that did not need so much customer support.
He not only was selling the computers at low cost but he also customerized them. The mass customerization in computers was ingenious idea but combined with the low cost production was something that none has never done before.
Moreover, in the 2002-2004 when he realized that the market for the computers is slowing he was able to find another opportunities for his company. He started producing Dell printers and sell digital cameras, camcorders and event the high definitions TVs. Dell is a visionary that newer stops looking for innovative solutions for his business and he is not afraid to be first to apply it and that is what makes him so successful.
2. What are the elements of Dell's strategy? How well do the pieces fit together?
Is the strategy evolving?
Dell initial strategy was to sell directly to customers and eliminate the markups of the resellers and build-for -order. Build -for - order and keeping low cost is something that usually does not go together, though Dell's strategy pieces fit together perfectly.
To be able offer low prices Dell had to find many cost effective solutions, and build -to- order gave him many cost advantages that other manufacturers did not have.
The value chain of Dell's company reflects how good the strategy is applied.
The company is connected very closely with its suppliers who provide just-in-time inventory parts. The computers are assembled after the order is placed and are delivered to the customer within 3 to 5 days what reduce the cost of warehousing. This also ensures that Dell does not have inventory that he is not able to sell, and he is able to be flexible and respond fast on changing the market preferences and prices of computer parts.
Is the strategy evolving? Yes, Dell still introduces changes into his business. One of them was when he decided to enter new products on the market. His new strategy was to "identify product with a good margins, figure out how to build cheaply enough to be able to significantly underprise competitive products and market the new products to Dell's steadily growing customer base" (Thompson 221).
3. Does Dell's...
Bibliography: Lee, Louise. "It 's Dell versus Dell Way". Business Week . February 23 2006.
Thompson - Strickland. "Strategic Management". Primis Online.Mc Graw-Hill2006.
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