This report shows proper management of Dell Company. Our company is team of three customers, and we will display this case to implement what we should are learning in Strategic Management course.
Dell Company is famous company in world which is one of the most significant companies in the modern economy.
This survey sheds light in many important things which are parts of tactical management such as first, you start with inspecting Dell industry. Second, talking about Dell Company situation with its current issues. Then, there is a part which talks about Dell current strategic posture which provides the current eye-sight and quest, current targets and goals and current corporate structure and culture. From then on, explaining the SWOT analysis of opportunities and hazards in external environment and advantages and weaknesses in inner environment. Finally, the record is supported by putting some tips about researching its vision, objective, objectives, goals and using alternative strategies. Also, there exists appendix at the end of the report which is approximately the proper audit format.
Industry situation
Industry background & Industry development
All industries in the market places have been go through steps that provided the business itself the strength in taking the opportunities which were available while avoiding the threats.
In order to reach your goals in the market you have to beware about the key success factors which are as follow:
Key success factors of the industry
Product attributes
Are the characteristics where products are determined and differentiated? Product attributes usually comprise features, functions, benefits, and uses which is important in the merchandise to be known in the market as Dell dose.
Resources competencies
Competency can be an area of knowledge or skill that is critical for producing key outputs and is also something that a firm can do well and that meets the next three conditions:
It provides customer benefits.
It is hard for competitors to do as they done.
It can be leveraged widely way too many products and marketplaces.
A competency can take various forms, including technical, subject material know how, a trusted process, and close romantic relationships with customers and suppliers. It could also include product development or culture such as worker devotion. Modern business theories claim that most activities that are not part of an company's central competency should be outsourced.
Characteristics of Competencies
Potential usage of a wide variety of market segments - the competency must be capable of developing services and services
A competency must make a substantial contribution to the perceived benefits of the finish product.
Competencies should be problematic for competition to imitate. In many sectors, such competencies are likely to be unique
Competitive capabilities
Is the rivalry of several companies over product which is notebook computers? Each company has its ability to compete in the market to produce the best quality of laptops on the market by this each company will put its capacity to be the leader of this industry as the firms is trying their finest to do and face your competition. Competition may also are present at different sizes; some contests may be between two users of a types, while other contests can involve complete species. Within an example in economics, a competition between two small stores would be considered small in comparison to competition between several mega-giants. Because of this, the results of the competition would also differ- the bigger the competition, the larger the effect. In addition, the amount of competition can also change. At some levels, competition can be casual and become more for pride or fun. However, other competitions can be extreme and bitter
History of industry:
Personal computer industry first started out in 1980s.
IBM was regarded as a "computer solution" company and acquired the broadest and deepest capacities in :
IBM's global Services business group was the world's largest it services service provider.
In 1984, the Dell computer was founded with simple vision and business notion.
There are many competitors in PCs market such as Hewlett-Packard, IBM, Gateway, Sunlight Microsystems and many more.
Issues within the industry:
Technology
Technology is often as an issue on the market by using new operations or strategy in producing the products or services. In our circumstance using technology is very profitably because it helps the company to do the task quickly and proficiently.
Customer needs:
Customer needs can be one of the biggest issues in the industry, because it is rather important to keep in mind what the client need and what they like, the companies have to service from small thing like shape and design to big things like performance; by this the company can reach their focuses on easily.
Diversification:
Diversification is vital because when the business increasing their products and services that will lead to customer satisfaction and also to reach a lot of customers.
Company Situation:
Michael Dell founded Dell Computer Company in 1984 in Austin, TX with the administrative centre of $1, 000, at that time he was Joining University of Texas. He previously a vision that he could do great things by changing Computers and sell them. In 1983, his dad asked him what he wished to do along with his life; Michael's answer was " I want to compete with IBM!" Even-though his dad was not amused; he made his choice and started out his own business with all his center. While changing and selling PCs, he discovered that traditional manufacturer-retailer chain is not as productive as it should be. Therefore he began to think of finding ways to sell to the end users directly. By doing so, decreasing the costs on the supply chain plus more important servicing the client with those saved dollars would be a great solution in order to increase client satisfaction and devotion. He was right to do what he assumed in as a business owner and today he has an established company not only in terms of the sales but also building great customer interactions.
Dell TimeLine:
1984 - With $1, 000 in startup capital, Michael Dell registers his business as Dell Computer Corporate. The company becomes the first on the market to sell custom-build computers right to end-users, bypassing the prominent system of using computer resellers to sell mass-produced personal computers.
1986 - The company also pioneers the industry's first thirty-day money-back guarantee, which becomes the cornerstone of Dell's commitment to increase its service offerings and offer superior client satisfaction and will be offering the industry's first onsite service program.
1987-Dell establishes its first international subsidiary in the united kingdom.
1990-Dell began to sell computer systems through consumer shops such as CompUSA and Best Buy. The business later exits this section after determining the retail-store model did not meet its financial objectives.
1994-Dell launches its Dell Japan and Dell Asia/Pacific businesses.
1996-Dell launches www. dell. com, starts selling custom-built computer systems online and presents its custom-made web links for customers called "leading pages"
1998-Dell opens an integrated sales, production and support middle in China.
1999-Sales over www. dell. com tops 35$ million per day.
2003-Dell boats out 6 million units over HP with 5 million units
2003-40, 000 regular employees. Roughly 27, 000 in the U. S. , and about 13, 000 in other countries
Dell Computer Organization designs, develops, produces, market segments, services and helps an array of computer systems, including pc systems, mobile computing and organization systems (includes servers, workstations and storage space products), and also market segments software, peripherals and service and support programs. The Company is managed on the geographic basis. The three geographic sections are the Americas, Europe, and Asia-Pacific and Japan.
The immediate model is based on the rule that delivering custom-built personal computers is a good business design for providing alternatives that are truly relevant to end-user needs. This concept, alongside the Company's versatile, build-to-order making process, enables the corporation to attain faster inventory turnover and reduced inventory levels and allows the Company to rapidly include new technology and components into its product offerings. In the same way that the Company's computer products are built-to-order, service and support programs are made to fit specific customer requirements. The Company offers a wide selection of service and support programs through its technical personnel and its immediate management of specialized service suppliers. These services range between online support to onsite customer-dedicated systems engineers
Dell is the first company, which starts off the direct advertising model to end users in computer market place. Pursuing benefits give great competitive advantages to Dell Firm:
Eliminates the need to support an considerable network of general and retail dealers
Avoiding dealer mark-ups
Avoids the higher inventory costs associated with the inexpensive/ retail route and the competition for retail shelf space
Reduces the high risk of obsolescence associated with products in a quickly changing technical market
Allows the business to maintain, monitor and update a customer database that can be used to condition future product offerings and post-sale service and support programs.
The Company produces and utilizes immediate customer relationships to comprehend end-users' needs and also to deliver high quality computer products and services personalized to meet those needs. For large commercial and institutional customers, the business works with the client before the sale to plan a strategy to meet that customer's current and future technology needs. Following the sale, the Company continues the immediate relationship by creating account teams, comprising sales, customer service and technical personnel, dedicated to the Company's large corporate and institutional customers. THE BUSINESS also establishes immediate interactions with small-to-medium businesses and people through account reps, telephone sales staff or Internet contact. These direct customer relationships provide the Company with a frequent flow of information about its customers' plans and requirements and permit the Company to think about its customers' needs against appearing technologies.
Michael believed that Dell Company has a set of services includes expanding, manufacturing, retailing and supporting servers, personal computers, data-storage devices, personal digital assistants (PDAs), software, Televisions, network-switches, notebooks, printers, computer-peripherals.
Problems:
Direct sales business would not develop fast enough
The firm faced several challenges, the company had trouble reproducing important aspects of the PS/2's structures, and the computer systems were delayed significantly, embarrassing the young company.
There are different competitors for the business in the computer market.
Current eyesight/mission
Vision :
A strategic vision is a roadmap of an company's future. It is used for providing details about technology and customer concentrate, the geographic and product markets to be pursued, the capacities it plans to develop, and the sort of company that management is wanting to generate.
Company's eyesight is: -To explore new ways of using technology to do good stuff and leave a confident impression on the earth.
(Understand how Dell is reinventing the way the entire world uses it, and how we demonstrate our commitment to sensible and lasting business techniques).
Mission:
A company's mission statement is normally focused on its present business opportunity or who our company is and what we do. Quest statements broadly illustrate an organization's present capacities, customer emphasis, activities, and business makeup.
Dell's mission is usually to be the most successful computer company on earth at providing the best customer experience in markets we serve. In doing this, Dell will meet customer prospects of:
Individual and company accountability
Best-in-class service and support
Flexible customization capability
Superior corporate and business citizenship
. Current goals/aims:
Objectives are an organization's performance focuses on or the results and benefits it wants to attain. They work as yardsticks for checking an organization's performance and improvement.
To run and develop as a favorite business
Build close interactions with this customers
Higher-sales and marketing performance
Improved customer profitability
More cost-effective customer service
Current strategies: a - Corporate and business, b - Business c- Functional
Corporate strategy is the entire managerial idea for a varied company. It consists of the moves made to set up business positions in several industries and the approaches used to control the company's band of businesses
Target from different demographics, which will raise the purchasing.
Using new methods in advertising its new product series before the opponents do.
Using program that didn't required training, and must be intuitive to the finish user.
The main of dell computer strategy was to use its strong functions in supply string management, low cost manufacturing, and direct sales capabilities to increase directly into product categories where it could provide added value to its customer by means of lower price.
Expand its marketing strategy to increase the selling.
Using its competitive capacities in PCs and servers to pursue revenue progress opportunities.
Dell's build to order strategy recommended that the company had no in house stock of completed goods inventories and this unlike rival using the original value string model.
Current corporate structure/culture
The corporate composition and management of Dell extends beyond the mother board of directors. The Dell Global Executive Management Committee pieces the strategic way for how the corporation keeps customers at the forefront, from building and manufacturing personal computers to offering products that meet customers' requirements to providing sufficient service and support.
Dell got Multi-nationals employees of 40, 000 employees in 34 countries and its own employees were situated in countries outside the United Condition.
On January 31, 2007 Michael Dell delivered to the company as CEO and the company noticed immediate changes in operations. Also he presumed in a lot of things such as:
Build for future years, alternatively that immediate gain.
Recognize that the road for success includes failing.
Involve associates at all levels in the total decision-making process.
Treat specific with admiration and dignity
SWOT research of Dell
External environment Analysis
The Opportunities is the probabilities offering to any company to be one of the best companies in their industry field. And to make more profit. Dell Company has an opportunity facing the industry that let customers found the ease of shopping. On the other hand DELL has the opportunity to create expectations and dominate the field. Also it has also purchased enough technology to increase width by entering the high technology business fields. Dell Company also has other possibility to able customers pay by mastercard. First, it has a good quality for producing the new products. Plus the important point that Dell Company tries to exploit all new solutions. It have own website showing its products, new branches and any new Incidents & Exhibition. Alternatively, Dell Company gets new technology to do its products by sending trainers abroad or by importing professional chefs.
In economic field, Dell Company has standard economic and business conditions. Also Dell can develop new products predicated on new or evolving technology and the market's popularity of these products.
As all companies in the world, Dell Company has different hazards influences its position therefore its profit. If the new rival is copier to Dell Company, it'll doesn't affect profits of Dell Company because it is famous name in Computer industry and also have a superior quality. Also one of the widening retardant for Dell Company is Customers need. There can be an internal and exterior have an effect on on Dell Company. The inner points depend on Dell Company. When there is issue or any problems in the business and the external factors depending on increasing prices by government and the taxation.
Industry environment
The industry environment for every company contain of five competitive forces. These Forces help to analyze the External environment of the companies.
Rival
The first Causes that affect any Company is the Competition or the rivals, Generally competitive rivalry will be high if: there may be little differentiation between the products sold between customers, rivals are about the same size of each other, if the rivals all have similar strategies, it is costly to leave the industry hence they deal with to just stay in. When we had taken about Computer industry, Dell Company has many competition such as IBM, Sony Microsystems, Gateway and Horsepower.
There is one or more competitors are dissatisfied with their current position, it'll make good tips for Dell Company. First the market share will be more than its competitors. Second it reduces the Opponents pressures. Also, the rivals that have powerful strategies will have an effect on the marketplace poison of Dell Company.
Entry barriers
The new entrants is one of important forces that influencing all Companies and business. So, the Competitive environment is unattractive when Access barriers are low and admittance is probable.
Substitute products
The substitute products in the market make a hazard to other Companies that produce the same product. The threat of substitute is high when: price of this substitute product comes, it is not hard for consumers to turn from one alternative product to some other. The client of computer has a great many other substitutes on the market such as Toshiba. The product is strong because of good price and quality. So it will affect the sales of Dell Company.
Suppliers
As we know the Suppliers are who provide us with different products or services. And it's really strong competitive make when they have good reputations and growing demand and when Item accocunts for large part of product costs, is vital to creation process, and/or significantly affects product quality. So the Suppliers have Bargaining power which means the ability to influence the setting of prices. So, the dealer will use their power to extract better terms (higher income) at the trouble of the marketplace. Dell Company has many suppliers and has able to discuss the company and get good price with them. Michel Dell presumed that this made far better sense for Dell Computer to partner with reputable suppliers of Laptop or computer parts and components. Also he openly shared its daily production schedules sales forecasts, and new model introduction plans with distributors. In addition he also do 3 years plan with each of its key suppliers and worked with suppliers to minimize the number of different stock.
Customers
As we said recently, the bargaining vitality is the ability to influence the environment of prices. But here the buyer will use their capacity to extract better terms (higher income) at the expense of the marketplace. For Dell Company the Customers have a solid bargaining capacity to get what they need for better price. Due to having other substitutes of Computer Company; the customer will pattern to it. Also, when there is large number of customer of Dell Company, the business will reduce its price to meet the customers' needs. Also Dell managed with sales service programs aimed at just two market sections__ High volume level ((Corporate and governmental potential buyers)) and Low volume ((Business and Individual Purchasers)).
Internal environment
Corporate Management and management team
Board of directors and the Professionals team:
The Professional Committee reviews the moving three-year strategy every year and sets complete plans for the entire year forward. Once these plans are arranged by the Mother board, they form the foundation for the year's business aims and the budget.
Success of the business and the Group is focused on building strong relationships with its key suppliers.
Dell continued to progress a number of initiatives with suppliers to improve performance and ensure moral compliance in the resource chain. These included ongoing focus on increasing the performance of key suppliers and prioritizing key products which includes resulted in
Improved on-time and in-full delivery of established products
Improved on-time and in-full delivery of new product development.
Internal Control and Risk Management:
The Board is ultimately responsible for the Group's system of inner control and then for reviewing its efficiency. However, such a system is designed to manage rather than get rid of the risk of failing to achieve the Group's goals, and can offer only reasonable rather than absolute confidence against material misstatement or damage.
Corporate structure
Powerful strategy:-
Dell offers a higher level of strategy which makes Dell expended in most of world locations and increasing the income and revenue because of it strategy. The Dell strategy not only about expanded and get earnings but also to meet customer need to make sure they are happy with their products.
Corporate/company Culture
Skills Trade.
Dell skill trade programmers try to exchange knowledge and skills between different countries that make corporate in their knowledge. That increases their environmental performance.
Corporate resources
Marketing:
Customer Service.
Customer service is one of the most important aspects in Dell, they offer their employees a particular training, to steer them how to deal with customers, as well as how to always get them, and make sure they are going out the shop while these are satisfy.
Reputation and honors.
Dell reputation, worth and awards, give the customers and the whole world a smart picture about them, which make the customers trust them, and they will obtain new customers as well.
Moderate Price.
Because they are producing on the high quality their price is average neither low, nor high from what they are really providing to the customers.
Strong brand and image:-
Today almost all of people in UAE find out about Dell from the name and image that it's providing and special the reputation that customer have it from them because of the high quality and unique products they may have. So Dell has a solid name and image.
Strong advertising:-
Advertising is the best way to deliver product to customer. Dell has different way of advertising such as newspaper, magazine, billboard; join different events, and finally the advertising through internet form different websites. Which makes Dell has a high level of advertising and strong ways.
Finance:
Strong financial condition:-
After the success of Dell strategy and the extended; the financial condition has risen to be one of the key strong of Dell factors of inside environment.
Cost advantages:-
Dell provides a high quality in their products and in numerous areas so it has a high cost advantages.
Operation:
Innovative products.
The main skill that Dell has is the innovation of these products which make product of Dell unique and different from competitors. Also Dell gets the strong advancement skills.
The products meet their quest, and principles.
Dell make an effort to produce their product in high quality and gratify customer needs that which meets their quest and goals.
Human Reference:
The Group targets attracting and keeping employees with great skills, knowledge and creative talent.
It has a long-established coverage of promoting variety throughout the business enterprise. Internal and exterior recruitment techniques are supervised to ensure there is absolutely no unintended bias. Individuals resource policies indicate commitment to a good and equal corporation where everyone is encouraged to achieve success irrespective of gender, race, sexual orientation, era or disability.
One of the key performance focuses on is to strengthen learning and development programs for employees who straight provide customers. This facilitates one of the Group's key business goals to embed the customer culture. A new development programs, is to exchange knowledge and skills from different countries.
R&D:
Dell Company targets developing the product and their skills by searching and review of the new technology that are in computer industry in the world.
MIS:
Dell. com
In this website, Dell provides a lot of information about their products, branches, new happenings and about Dell itself.
Corporate resources
Operation:
High operating cost.
Because they produce their products under special prices and standards, they have got a high operating cost to meet that aim for.
Corporate Management and management team
Michel Dell was a terrible public speaker and wasn't a good at running meetings.
Recommendations
Review current vision
Dell is pleased with its vision which is "To get the leader in the computer market by providing high quality and low cost products to meet customers' prospects", and it is clear and successful. It desires to continue with it.
Review current mission
In addition, Dell successes with its quest which is "Use new technologies in production and marketing and build its expectations be based upon market standard to provide its customers best services and products". It broadly describes company's present capacities, customer emphasis, activities, and business cosmetic.
Review current objectives
Dell satisfies using its objectives because they are clear and simplify its eye-sight and objective that they would like to be and also to do and they're:
Create new ideas in sweet industry
Satisfy customers' needs
High quality
Giving the employees training programs that can be inside or beyond your country
Building its criteria be based upon market standards
Review current goals
Dell's goals are long term goals that happen to be for more than three years. They support and suitable with its vision and mission and they are:
Lead the market
To expand its brand and its image through the world
Alternative strategies
Corporate level
Target from different demographics, that will improve the purchasing.
Business level
Using new methods in advertising its new product series before the competition do.
Functional level
Expand its online marketing strategy to increase the selling through online shopping by using internet.
Strategy Implementation
Dell Company implements its strategy in successful way that allows them to have competitive advantages over their rivals since it set up.
Conclusion
Our analysis and evaluation validate that Dell Company is the foremost managed computer company. We believe this is because of their innovative functions and quality of commercial management.
Dell company didn't apply the old rules of the other companies in the industry therefore, it come up with invention and unique plans that help the business not simply to endure in a such competitive environment, but to help the business enterprise to increase and broaden the operation.
Appendix A
