Case Analysis Dell Computer Corporation

¶ … Dell's strategic management. It uses no source except for the case.

Michael Dell right from the beginning has been more of an entrepreneur then at technological guru. Although he had not taken active part in strategic decision making, he nevertheless realizes its importance. For this purpose he had brought leaders like Walker and Meyerson to aid him. As a leader he was dynamic in the sense that he easily takes into account of how the company could run with help of shared leadership. He also believes in cooperative work. Hence, in leadership, he has performed very well but as far as strategic management is concerned, Dell depended on other's skills more then his own.

Dells' strategy consist of the following elements:

embrace new ideas

Profit and loss management for each unit of business.

Value creation

Growth through informal enabling management like development of capabilities

Recruit talents

Strategy should be based on combination of resources and planning

Shared top power management

Objective of the company should be to add value to customer's purchase.

SWOT analysis reveal that Dell have a strong internal management strategy coupled with external environment strategies. The company focuses on employee development through shared power and successes. This encourages the internal customer to participate in decision making. To ensure that the company work according to plan, Dell ensured expert skills like Meyerson and Walker.

Further, analysis of the company also reveal that the company focuses on serving the external customer through value chain management, a technique important for today's organization to gain an edge over other companies.

When Dell realized that the PC industry is becoming too crowded with powers in the hands of Compaq, IBM and Hewlett Packard, it decided to use the merger tactic to diffuse competitor. In a buyout of Compaq, Dell gains market share that was divided. Now with Compaq's technology it has been able to gain a significant share in competitive pricing to lead the group. However, it is seen that HP still remains the undisputed leader in this business because the company not only specializes in PC but it is also known for its consumer behavior prediction. In this regard Gateway and IBM still need to increase their market share before they can take over Dell or HP.

Dell has gained a leverage in the market of PC with the acquisition of Compaq. It was first limited with its share but now with Compaq it has been able to gain Asian as well as European market share. Dell hence has a substantial competitive edge over its rival. The reason being that Dell believes in creating a larger customer base by securing the value chain. In this strategy it needed a leverage over the distributor chain, where it previously had to depend on the retailers to do so. Now with Compaq it does not have to spend in this side of the business and concentrate on execution of its other strategies.

6. In the last five years Dell has been careful in keeping its shareholders happy with a growth rate from 34% to 64% in 2000. This shows that the company concentrates on increasing profitability along with its innovative strategies.