Dell Case Study and Solution

Chapter two (Krames, 2003) depicts the values, journey and leadership style of Michael Dell. Michael Dell is the founder and CEO of Dell, Inc. According to the author, Michael had an entrepreneurial gene in him since the childhood. He started his first business Dell Stamps when he was 12. Michael started his revolutionary journey of Dell Computer Corporation when he was 19 year old. He was the youngest CEO of a Fortune 500 company at the age of 27.

Dell is a computer corporation recognized for manufacturing computer systems through parts assemble. In 1983, Michael Dell saw an opportunity in using IBM compatible computers for a new assembly line that can be sold to local businesses. The idea as explained by Michael Dell, in one of his interview, is that in the early days of computers' manufacturing, companies had to be able to produce every part of the system. As the industry matured, companies started to focus on single parts and to become specialized in creating items that can be assembled with other parts to prepare a computer. As a result, Dell understood that to have a competitive edge in the market, they needed to

The proposal presented herein gives the background information of Dell Computers Corporation highlighting the current operation for the manufacture of computers. The proposal highlights the potential of the company to increase its market share and profitability through change of its culture from order based to inventory base.

Dell Computer Corporation was founded in 1984 by Michael Dell. From the early 1990s until the mid-2000s, Dell was ranked as a PC market leader relying on their distinctive marketing pattern “Direct Model” which undertook direct communication with customers and provided customized products. Recently, the PC industry is facing inconceivable worldwide competition, and Dell is gradually losing their competitive advantages by using its direct model in critical business segments. The company is facing shrinkage of growth, increasing competition, declining quality of customer service, and limitation of expansion. These issues have an enormous impact on Dell’s position as a technological giant in the PC industry.

Founded in 1984 by Michael Dell with the aim of building relationships directly with customers. Dell is a premier provider of PC products and services sought by customers worldwide to build their information technology and internet infrastructures. Through its direct business model it designs, manufactures and customises products and services to customer requirements and offers an extensive selection of software and peripherals.

In the Servers market (Wintel) Dell had acquired the first position in United States. For the Entry level servers the market share was 25.5%.

What is Dell’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion?

“Marketing / Sales” While most competitors supplied machines based on orders from distributors, resellers, retailers, Dell took orders directly from customers. Dell used indicators of a company’s potential PC purchases, such as the number of employees and the number of PCs per employee, to divide customers into two groups: Relationship buyers and Transaction buyers.

Essay 1 : Introduction to Dell 3 Parts - Look at the Business Model in Particular (Is it fit for purpose?) – Then the Ecosystem – The Modularization and mention licensing Look the Paradigm of Dell Conclusion

million to $3.6 billion. In many of those years, Dell earned more on PCs than all of its main rivals

1. a. In a span of 20 years, from 1984, Michael Dell became the leader of one of the most profitable and innovative organizations in the world. The meteoric rise of Dell Computers Corporation was largely a result of some innovative strategies and perspectives and reveals a new model for doing business in the information age. Discuss the major mistakes made during this period and the resulting lessons learnt by Dell.

After 2004, most of the growth has come from retail market. The biggest growth can be found in mid-sized cities and small towns, where end users have less savings to spend, know less about computers and therefore prefer to receive advice from retailers before they make the decision to buy a computer. After buying this computer, convenient technical service is required after bringing the PC back home.

A noted misstep in their revised process was that they continued to build systems based on forecasts, rather than based on customer orders. As a result, inventory was still a significant cost factor, and IBM incurred big losses in their PC division from 1996-1998 from this and other initiatives. Meanwhile, Compaq effectively surpassed IBM in the mid 1990s, mainly through large acquisitions of firms like DEC, and followed with attempts to mimic Dell’s build-to-order and direct-to-consumer approach. Continued use of retailers and resellers likely prevented further cost savings, and in 1998 Compaq went from profitable to merely breaking even. Gateway seemed the most well positioned to closely follow in Dell’s footsteps since they were already largely a direct-to-customer business, but difficulties with inventory, IT systems, and a product recall restricted growth. Apparent focus on small business & home sales may have also been a limitation, as the majority of Dell’s sustainable revenue and growth came from sales & relationships with large corporations. While Dell’s competitors may have attempted to mimic their successful approaches, difficulties in fully executing and realizing the benefits have prevented any significant responses.

Although both companies have diversified into other industries, PC industry is still their most important source of revenue. For years, these two giants are battling for lead in PC market. When measured by market share, HP has taken place of Dell as No.1 seller in PC market since 2007 (FIGURE 1). When measured by revenue, HP also wins over Dell for almost five years (FIGURE 2). Also, Acer grew rapidly in market share partly because of its merger with Gateway in 2007 (Einhorn 2007), and almost matched Dell in 2009.

Because of these measures followed by Dell it still remains to be the top. The success of Dell lays in large part with market segmentation and specialization strategies that Michael Dell has used.