1. What is your rating of Michael Dell as CEO? How good has he performed the undertaking of strategic direction discussed in Chapter 1?

Strategic Management Tasks

– Analyzing External Environment

– Analyzing Company resources and Position

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– Knowing Which scheme to Use

– Identify Opportunities

– Select Right Business Model

M. Dell started his concern when the market for the computing machines was still turning really fast thou it already was dominated by large participants with the strong trade name image such as IBM. Even thou he did non hold the resources to vie with such strong competition he had the vision that some twenty-four hours his company may be the market leader.

His success was based on happening the chance to bring forth the computing machines at lower cost so IBM and sell straight to clients by excluding the retail merchants. His company was turning fast. although non without the jobs. The instance states that during the early 1890ss the company “hampered by turning pains- specifically. a deficiency of money. people and resources” ( Thompson 216 ) . Dell had the vision. cognize market good. and had a good concern theoretical account but he had the job with commanding the company growing and acquiring more production capacity. Finally. these jobs were overcome and Dell Corporation became a public company. One more thing that is deserving to detect is that even thou Dell was so successful he besides made some errors. the illustration is provided by text edition. In 1990. Dell started selling through the retail merchants and abandoned the initial scheme of selling straight to clients and it went four old ages when he eventually realized that it was a error.

In 1996. Dell started to sell his computing machines to persons over the Internet. He was able to see the chance for turning the market of tech understanding clients that did non necessitate so much client support.

He non merely was selling the computing machines at low cost but he besides customerized them. The mass customerization in computing machines was clever thought but combined with the low cost production was something that none has ne’er done earlier.

Furthermore. in the 2002-2004 when he realized that the market for the computing machines is decelerating he was able to happen another chances for his company. He started bring forthing Dell pressmans and sell digital cameras. camcorders and event the high definitions TVs. Dell is a airy that newer Michigans looking for advanced solutions for his concern and he is non afraid to be foremost to use it and that is what makes him so successful.

2. What are the elements of Dell’s scheme? How good do the pieces fit together?

Is the scheme germinating?

Dell initial scheme was to sell straight to clients and extinguish the markups of the resellers and build-for -order. Build -for – order and maintaining low cost is something that normally does non travel together. though Dell’s scheme pieces fit together absolutely.

To be able offer low monetary values Dell had to happen many cost effectual solutions. and construct -to- order gave him many cost advantages that other makers did non hold.

The value concatenation of Dell’s company reflects how good the scheme is applied.

The company is connected really closely with its providers who provide just-in-time stock list parts. The computing machines are assembled after the order is placed and are delivered to the client within 3 to 5 yearss what cut down the cost of warehousing. This besides ensures that Dell does non hold stock list that he is non able to sell. and he is able to be flexible and respond fast on altering the market penchants and monetary values of computing machine parts.

Is the scheme germinating? Yes. Dell still introduces alterations into his concern. One of them was when he decided to come in new merchandises on the market. His new scheme was to “identify merchandise with a good borders. figure out how to construct stingily adequate to be able to significantly underprise competitory merchandises and market the new merchandises to Dell’s steadily turning client base” ( Thompson 221 ) .

3. Does Dell’s enlargement into other It merchandises and services make a good strategic sense? Why or why non?

Yes and yes once more. It does do sense for at least two grounds. First ground is that the computing machine market is maturating. Many computing machine users are yet non ready to replace their computing machines. Second is that Dell has a big client base. Dell’s clients are really loyal and I know that because I am one of them. This trueness reflects non lone grasp for Dell’s high quality merchandises but besides Dell’s first-class clients service ( thou I have to acknowledge that it needs to be expanded because it takes excessively long to speak to representative ) .

Dell enters the new markets really carefully. I noticed on its web site it merely sells high quality merchandises such as Canon digitals cameras hence I do non believe it may be in any danger of fring its trade name image. In add-on. because it stays near to IT merchandises is non in danger of thining its trade name.

4. What a SWOT analysis reveal about the attraction of Dell Computer’s state of affairs?

Internal StrengthsInternal Failings

Strong place of market leaderEffective modelHighly efficient procurance. fabrication. distribution capabilitiesSkilled Gross saless ForceEffective advertisementHigh Dependence on U. S marketTo little Customer Service DepartmentWeak R & A ; D section


Traveling toward new clients markets – Small and concern groups New Technologies that will turn new demand on IT merchandises Diversification opportunitiesAttractive acquisitions of competitorsWhite box market Maturing computing machine marketSlowing gross revenues though Web and PhoneDirect selling by other manufacturersSluggish Economy

5. What does a competitory strength appraisal reveal about Dell. as compared to IBM. HP and Gateway? Among these rivals. who enjoys the strongest competitory place? Who is the weakest overall competition?

Competitive Assessment of Dell versus its chief rivals


Dell’s Strong pointsBetter public presentation in computing machine hardware. better client service. more effectual advertizement. better monetary value. Dell has the lead in computing machine gross revenues as the consequence of strong advertisement and better monetary value. More effectual concern theoretical account. better monetary values

Dell’s Weak points HP leads the market in printing and waiters ( as of 2003 ) HP provides broader degree of merchandises and services. IBM has a strong R & A ; D section and a more esteemed trade name so Dell. IBM is stronger in information engineering. Gateway owns its retail shops ; better computing machine and notebook designs so Dell.

In 2003 the strongest place was held by HP. followed by Dell. IBM and Gateway. HP acquired Compaq and that acquisition had the consequence of turning assets. client base. capablenesss. and new chances. Dell had really strong place as the best value supplier. although its absence in retail shops made Dell’s gross revenues weaker around Christmas clip. IBM ( still really esteemed trade name ) was 3rd and it had many jobs in the computing machine gross revenues country. but was good in other IT merchandises and computing machine services.

The weakest company was Gateway. even though it was a really recognizable trade name it had really weak gross revenues and the company recorded net loss of $ 309 million.

6. Has Dell’s scheme resulted in a significant competitory advantage over its challengers? What is the footing for whatever competitory advantages it has?

Dell’s competitory advantage consequences from its concern theoretical account. value concatenation. and scheme – build usage – sell direct

·No in stock merchandise advantages

·No delay to clear stock list

·Customers are ever satisfied ( consequence of customerization )

·Flexibility and possibilities of reacting rapidly on altering environment. client penchants and new engineerings

·Cost advantages consequences from flexibleness on alterations

·Better ability to react fast on technological jobs or defects in constituents so the rivals who maintain the stock list

·”Possibility to form selling gross revenues around clients groups…” ( Thompson )

·Close relationship with providers allows them to minimise the costs from value concatenation and present a better monetary value to clients

7. What is your appraisal of the company’s fiscal public presentation the past five old ages? ( 1999- 2003 )

Net net income border – Indicates the figure of net income dollars generated for each $ 100 in gross revenues

1999 – $ 8 2000- $ 6. 59 2001- $ 7. 01 2002- $ 4 2003- $ 5. 99

ROA – return on assets


45 % 51 % 38 % 38 %

ROE – return on stockholder equity


62 % 31 % 38 % 26 % 43 %

The Numberss indicate that the company public presentation from the twelvemonth 1999 to 2002 was bit by bit declining this was caused largely by economic lag.

The twelvemonth 2003 was much better in fiscal public presentation the gross revenues grew approximately 13 % as a consequence of Dell’s successful advertizement run. improved client service and higher demand for IT merchandises.

8. Is Dell scheme potent adequate to crush out Hp? What are Dell opportunities for going dominant leader in the planetary Personal computer market?

The instance about Dell in the text edition is outdated and I many things happened during the last three old ages on the computing machine market.

I merely read the article in Business Week It’s Dell V. The Dell Way” and happen out that Dell is” the planetary leader in Personal computer market portion. with 17. 2 % . and most analysts expect it to go on to derive portion even without any important alterations to its attack. One ground is that Dell has room to spread out in aggressive markets such as China. And Dell is doing advancement in offering basic computing machine installing and care services to concerns every bit good as in reselling back-office storage cogwheel from spouse EMC Corp. ” ( Lee. Business Week 3/06 ) .

Another account of Dell success is the weaknesss of its rivals. IBM decided to sell off its Desktop and Notebook division. HP’s old success was undermined by the hapless leading of CEO Carly Fiorina and the uneffective amalgamation with Compaq. and Gateway trades with built-in higher costs and unsuccessful patent judicial proceeding with HP.


Lee. Louise. “It’s Dell versus Dell Way” . Business Week. February 23 2006.

Thompson – Strickland. “Strategic Management” . Primis Online. Mc Graw-Hill2006.

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