What is your evaluation of Michael Dell’s performance in his roles as Dell’s CEO and Chairman? How well has he performed the five tasks of crafting and executing a strategy that was discussed in Chapter 2?
The performance of Michael Dell as CEO and Chairman was excellent, his dynamic leadership, innovative marketing concept, and time-worthy decision guided Dell to turn it into the global giant of the information technology-related product and services. His excellent communication and easy accessibility, emphasis on the talented people and entrust control over the subordinates turned him into a role model to the juvenile executives and he established himself as the chief strategist for direct sales approach in the IT product and service market.
From the case study, it has been evidenced that as CEO of Dell Michael Dell performed such duties and responsibilities that commercially appointed CEOs may never perform for instance he traveled door to door to meeting customers, checking their demands, scrutinizing the outcomes of different strategies and the extents of customer’s satisfaction. The unparallel leadership of Michael Dell was again proved when he shifted the responsibility of CEO to Kevin Rollins, it demonstrated the most devastating impact on the performance of the company through slowed down in 2006 and the board was bound to resettle Michael Dell as the CEO of the company including chairman of the board. Michael Dell engaged his talent and innovation at crafting & executing Dell’s strategy in a very simple format – ‘PCs could be assembled by the order directly to the customer’ this strategic vision contains four doctrines such as well-built direct customer relationship, facilitate customers to obtain the customized product, providing efficient technology along with strong supply chain for the company. Michael Dell empowered the company in an extent stage where it has enabled to deliver any added value to customers with most up-to-date technology combining best performance and efficiency that would be accountable to customers ensure them the maximum return on investment for their along with non-proprietary as well as standardized technologies carry out most excellent value for the customers.
What are the elements of Dell’s strategy? Which one of the five generic competitive strategies is Dell employing? How well do the different pieces of Dell’s strategy fit together? In what ways is Dell’s strategy evolving?
According to the given case during 2002–2007, the seven core elements such as –
- Introducing build-to-order assembling services in a more and more cost-efficient way;
- Close collaboration with suppliers to constrict a cost-effective solution for the supply chain;
- To engage the best effort to maximize direct sales techniques to increase more and more customers,
- exploring new product and services to gain further superior market share of the global IT market;
- Ensuring best customer service for the Dell product along with appropriate technical support,
- Continuous spending for most up-to-date research and development to ensuring better customer satisfaction meeting their appropriate needs;
- All the Dell efforts always focused on product and services with standardized technologies
The low-cost strategy is the generic competitive strategies that Dell put into practice and the company is striving to endow with enormous services at a very low cost next to eradicating cost of the supply chain to deliver the sky-scraping quality of product and services as possible lower costs, all these strategies draw mutually assist Dell to gain success. Thus, Dell’s strategy has been evolving through getting higher its market creating new plants in different countries organizing its products integrating flexible computers along with simpler IT products and services that would capable the company to distinguish itself from the other competitors in the market.
Does Dell’s expansion into other IT products and services make good strategic sense? Why or why not?
It is fair enough for Dell to allow further expansion of its other IT products and services that would formulate superior strategic sense for the reason that in the concurrent time IT is no more a luxurious product, but categorized as a necessity product where Dell endow with value-added services to get together the requirements of the consumers. With the shifting dynamics of the market, if Dell keeps itself engaged in producing personal computers, its sales growth rate would defiantly decline for not to addressing the changing needs of the customers, by growing with the low-cost strategy to deliver the elevated quality of product and service integrating the competitive advantage of homogeneous technology. At this stage, Dell gained its competitive advantage by adopting skills at its directive, momentum along with efficiency that would capable to reduce cost more rapidly than all other, IT companies who are competitors of Dell.
Which company is competitively stronger—Dell or Hewlett-Packard?
Given case illustrated that Dell’s strategy has started to work with full speed by 2003 while its direct sales and build-to-order business model, as well as its strategy, has contributed the company with the largest part of well-organized procurement, assembling, and distribution ability in the global PC market where Dell enjoys an extensive cost along with profit margin advantage. At the beginning of Dell, Hewlett- Packard is a most strapping competitor in the IT product market where Dell’s global leadership proved its strength over HP where a new CEO reengineered the revitalized strategy that radically changed the gap between Dell and HP from 2006 to 2007 a gain of 18.8 % global market share where 14.9% share of Dell. In the context of the US domestic market, Dell also engaged its highest efforts to set control over HP in the financial year 2006-7 while Dell occupied 33.6% of the US market and HP has a share of 19.5 % which is outstanding about other market players, following table illustrate the strength of Del and HP-
In the US domestic market, the competitive strength of HP is next to Dell while the companies are positioned at the first and second position respectively during 1998–2007.
What issues and problems does Michael Dell need to address?
The most significant factors that Michael Dell must need to address is to explore the way of elevating sales along with strengthening the market share position with most competitive conditions where HP is at this time the major rival to Dell and it is emergence to take into account that HP is competitively stronger than Dell for trade competence. The sales of HP are constantly ever-increasing, even during the starting of the global financial crisis in 2007; HP demonstrated accelerated sales revenue growth while most of the promising competitors like Acer and Asus have failed to bit violently with Dell. On the other hand, the lack of innovation in product and service development is an additional factor for Dell that the company needed to address for its global expansion, consecutively, to attain the overseas customers more successfully, Dell must get hold of its costs that enlarge among the retail distribution where Dell would be able to utilize its best cost advantages. On the other hand, Dell needed to address its two key advantages at its supply chain management customized to the direct sales model that the company first put into practice and treated as a competitive advantage over the other competitors, the economic circumstance along with technological shifts is rapidly influence Dell to innovate its product and service.