Leader Analysis - Micheal Dell

Topics: Personal computer, Strategic management, Computer Pages: 10 (3562 words) Published: February 1, 2007
Michael Dell is the founder and the chairman of one of the most successful computer companies in the world. He led the company on its way to high growth and profitability. The company was always in the forefront of the direct selling concept and currently dominates the personal computer business.

Business the Dell Way, by Rebecca Saunders studies the leadership and entrepreneurial skills of Michael Dell and his influence over his organization's success. The Book brings into light an array of leadership secrets critical for any business. Michael's interests and business ventures during his school days and his entry into the computer business are also explored. The book also states some criticism on Michael Dell. Rebecca Saunders thoroughly examines Dell's business model - creating mass-customized computers and selling directly to consumers. The model has been supported by excellent leadership, continuous improvement and a steady flow of ideas from employees and feedback from customers. The book explains how any student, manager, entrepreneur or investor can learn from the Dell story. It is an inspiring story of success and contains invaluable source of lessons for the budding leaders and entrepreneurs.

Michael Dell heads an innovative organization which always searches for ways to improve the value of its products and to exceed customer expectations and of course adapt to the changing external environment. He found a company based on a good idea and then build on that idea, constantly improving on it and, adapting when the opportunities exist but never losing his strategic focus. That is why he is termed as a ‘Methodical Optimizer'.

Michael's entrepreneurial instincts were evident at the age of twelve; he created his own stamp business. He got a few people in his neighborhood to give their stamps to him, advertised 'Dell's Stamps,' in a trade journal and earned $ 2,000. According to Michael, it was then that he learnt the importance of eliminating the middleman. This became a guiding principle for all his ventures. At sixteen, he got a job selling newspaper subscriptions to the Houston Post. Even after he went back to school, Michael continued with his work. Soon thousands of subscriptions poured in and he earned $18, 000 more than his teacher earned in a year.

Michael's interest for computers started when he was in junior high school, when his instructor installed the first teletype terminal in their school. Soon it became a hobby and on his fifteenth birthday he got an Apple Computer and his curiosity prompted him to tear it down and understand its functioning. In 1981, Michael replaced his apple computer with the newly introduced IBM PC. He was amazed by different software and programs available for range of purposes. Soon he realized it's the next big wave impacting the businesses across the globe. He spent a lot of his time learning about functionalities of computers and he was quickly able to improve the performance of these PCs by adding more components. He bought parts from the distributors instead of retailers brining the cost down significannot ly. In 1982, he went to a Computer Conference where he found that PCs were sold for a high cost with least customer support. Also, he realized that the sellers had minimal knowledge on computers. He wanted to compete with these sellers and applied for a vendor's license in the state of texas and started selling high-performing computers much at low prices. His PC business continued to grow and soon won a lot of bids for selling computers.

In 1984, he registered a company PCs Limited with a State of Texas. And through previous contacts with customers and small advertisements in the local newspaper, he began generating business. He sold between $50,000 to $80,000 worth of upgraded PCs, upgrade kits, and add-on components in a month to people. In May 1984, he incorporated DELL and hired a few people to take orders over the phone. He then realized that the company...
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