Professional Documents
Culture Documents
1) What if anything, strikes you as impressive about Dell? In reading and preparing the case,
was there anything that you thought was particularly outstanding about this company?
I was very impressed with the fact that Michael Dell started Dell, Inc. with only $1,000, at a
young age of 19. The company was one of the first to build to order personal computers, and sell
them directly to consumers. After two years of being in business, in 1986 Dell began refining its
business strategy, building an adequate infrastructure, and established market credibility against
many of the better known rivals. I was also amazed with the fact that Dell, Inc. Was able to take
over the market share of Hewlett-Packard and became the global market leader in 2004-2005.
Although is faced many ups and downs and several obstacles, the way in which the company
started the many of the goals they were able to accomplish were outstanding.
2) What is your assessment of the job Michael Dell has done in as the company CEO and,
more recently as Chairman? What grade would you give him for his leadership of the
company over the past 20 years? Has he done a good job performing the five strategy-
making/strategy-executing tasks described in chapter 2?
I was impressed with what Michael Dell has done for the company. Dells first company,
PC’s Ltd. had a strategy of selling PC computers which mimicked IBM, except for a few
minor components, were being sold to price conscientious consumers, about 40 percent
below the price of the best selling IBM. By selling the computers below market price, and
generate rapid revenue growth for Dell. Michael Dell put tremendous effort into his
company, working 18 hour days, and employing more than 40 people. I found it astonishing
that at the end of that year, sales had reached 33 million. He later renamed the company in
1987, Dell, Inc. while seeking to refine the company’s business model, and production
infrastructure, while trying to obtain the same low cost. I was also impressed with the
financials of the company during it first years at Dell, Inc. The company started selling to
large companies, along with government agencies, and became a public company, raising
$34.2 million in its first offering of common stock. In 1990 is had sales of $388 million. I
strongly believe Michael Dell embraced his vision of trying to become one of the top tree PC
companies. Dell found a niche and was able to run with it. I would give Dell an “A”
considering posted revenues for 2008 were $61.1 billion, showed a profit of almost $3
billion. I think that Dell’s decision of bringing in Lee Walker proved that Dell wanted and
knew what was best for the company, and provided it. I view Michael Dell as a very involved
and well rounded CEO, while focusing on implementing the five strategy-making/strategy-
executing tasks.
3) What are the elements of Dell’s strategy? Which of the five generic competitive
strategies is Dell employing? How well do the pieces of Dell’s strategy fit together? Is
the strategy evolving, and if so, in what ways?
There are four main elements to Dell’s strategy of delivering superior customer value.
The fist key element is that Dell focused on selling directly to the consumer, which has proved to
be very efficient way to market the company’s products, while eliminating wholesale and retail
dealers. The second was allowing customers to purchase built products and services in a custom
tailored way, which allows them to meet customer’s specific needs. The third is a highly
effective supply chain and manufacturing organization, which has strong roots in standardized
technologies, and selling direct. This allows Dell to sell it products at lower prices than most of
the competitors. The last is Dell delivers added value to customers. They implement this through
extensive research in all technology options, by trying to determine which ones would be
optimal, and lastly to be accountable to customers for helping them receive the highest return on
their investment. In the business model, Dells’ Strategy was clear. It constantly strived for was to
reduce cost. In the most recent year, 2008, they set a goal of trying to reduce cost by $3 billion.
With dell obtaining the seven major factors in its strategy it was able to dominate the market.
First it made its computers “build to order.” Second, it partner with its suppliers to “squeeze cost
savings” out of the supply chain. Third, it used direct sales techniques to gain customers. Fourth,
it grew into a larger a larger market share with expanding its additional products and services to
customer service and technical support. Sixth, it kept R&D and engineering activities solely on
better meeting the needs of consumers. Lastly, it focuses on using standardized technologies in
all of its product offerings. Dell’s strategy is together well, which the major factors relying on
one another in order for the company to succeed as a whole. I believe Dell’s strategy is
constantly evolving. They are always looking of new ways to expand their products and services
without trying to overload the system. In recent years, Dell has expanded into data storage
hardware, switches, handheld PC’s, printers, and printer cartridges, and several new software
products.
4) Does Dell’s expansion into other IT product make good sense? Why or why not?
I think that Dell’s decision to expand into other IT products makes good sense. I think
that dell has dominated the PC industry not only is it marketing and customization, but is the
quality if the product it sells to the consumer. It make good sense to me because many people
who purchase Dell computers, and are very loyal to their brand would preferred to have
matching components to their PC’s. For instance, many consumers would probably buy the
printer, so that it matched their computer. They would do this not only for the name brands to
match, but because Dell has a quality reputation which consumers know and trust. They
would be more apt to try a new product from a honest and worthy quality supplier, than they
5) Given that Del is a global player, how would you characterize the company’s strategy-is
Dell using a multi-country strategy, or a global strategy? And if a global strategy, what
kind of global strategy?
I would characterize Dell’s strategy as constantly searching for ways to reduce cost,
which focusing on superior customer value. Dell uses a global strategy. This is implemented
in the various products it offers, in the most innovative ways. Dell provides outstanding
customer service and a wide range of PC’s for home and business. It also has expanded into
new IT products which are marketed across the world. The products and services are well
known, and backed by the Dell name. Dell has an outstanding reputation in the industry,
which allows them to employ a global strategy in a very effective manner. Dell employed
kiosko to various cities and countries, which allowed consumer to try the products, inspect
the products, and speak with knowledgeable representative who could assist them in ordering
the product. Although the “kiosko” did carry inventory, they proved to be a success. WHAT
Strengths: Dell is the World's largest PC maker. They cut out the retailer and supplies directly to
Weaknesses: The Company has such a huge range of products and components from many
suppliers from various countries, that there is the occasional product recall that can cause Dell
some embarrassment. Dell is a computer maker, not a computer manufacturer. It buys from a
products. Initially this has meant goods such printers and toners, but now also included LCD
televisions and other non-computing goods. Dell is making and selling low-cost, low-price
market globally. Dell, being global in its marketing and operations, is exposed to fluctuations in
Although Dell is not currently the leader in market share for the PC, is takes a close spot
as second to Hewlett-Packard. Dell, as of the first quarter of 2008 had a market share of
15.7%. Lenovo had a total market share of 6.9 %, while Gateway fall into the other category,
and it not a large threat to Dell as a competitor. The leader Hewlett-Packard had 19.1%. Both
grew at a steal rate of 1% compared to the previous quarter. I believe Hewlett-Packard enjoys
the strongest competitive position, with a fourth quarter in 2008 increasing 4%. HP
forecasted the 2009 fiscal year revenues to be between $127.5 to $130 billion range. Dell
forecasted for the same period a 3% decrease from that of the previous year, with their 2008
net profit already being down 3 percent. Gateway has the weakest overall competitive
8) Has Dell’s strategy resulted in a sustainable competitive advantage over rivals? If so what
is the nature and source of the advantage?
Although Dell is not the leader in the market share, I do believe it has a sustainable
competitive advantage when compared to some of its competitors. One of Dell’s main
competitive advantages is having consumer’s custom order. This eliminates excess inventory,
and ensures that the consumer is getting a product that fits their needs. This employs Dell
10) What are Dell chances of becoming the global market share leader in PCs? Is its strategy
potent enough to beat out Hewlett-Packard?
Dell has a chance to become the global market share leader again, although it will
have to implementing a new plan and strategy to evolve with the changing market. Right now
the “two-two” system is not efficient and too costly. Dell with have to change many of its
manufacturing procedures to reduce the cost in order to regain the market. Dell is very
capable of building quality products, they are just falling behind in manufacturing them in a
cost efficient way, where they are able to increase the revenue. Without taking their current