When Dell's CEO, Michael S. Dell and President, Kevin B. Rollins met in the fall of 2001, they were confident that the company was recovering from the global crash of personal computer (PC) sales. In fact, Dell is the master at selling PCs directly and bypassing middlemen and thus delivers PCs cheaper than any of its rivals. Some would argue that it's the model of efficiency, with a far-flung supply chain knitted so tightly that it's like an electrical wire that is humming 24/7. Yet, all this has been true for more than a decade. And although the entire computer industry has tried to replicate Dell's tactics, none could spot a blemish on the company's results. Today, Dell's stock is valued at a price-earnings ratio to the multiple of 40 that is loftier than IBM, Microsoft, Wal-Mart Stores, or General Electric.
As it turns out, the management of Michael Dell has elevated it far above its sell-direct business model.
The Chairman, the CEO, and other executives analyzed the actual position and determined Dell's strategic orientation based on a middle term outlook. In other words, they had to understand how technology must be used to sustain Dell's competitive advantage and to reinforce its leadership position inthe PC market up to 2006.
[...] Finally, the technology is used and integrated through all the stages of the internal and external value chain Pioneering leadership in the use of the Internet and e-commerce to sustain its market position and competitive advantage Michael Dell believed that the Internet had revolutionary business potential, and he was instrumental in making Dell Computer a pioneering first-mover in using the Internet and e-commerce technologies. Further, Michael Dell thought that for a company to harness the power of the Internet and succeed in revolutionizing the way business was done, it had to observe three rules: Give customers a better experience online than they could get offline. [...]
[...] Dell was partnering with Intel, Microsoft, Computer Associates, and other prominent PC technology providers to help customers make more effective use of the Internet and the latest computing technologies. Dell, which used Intel microprocessors exclusively in its computers, had been a consistent proponent of standardized Intel-based platforms because it believed that those platforms provided customers with total value and performance. Dell management considered both Intel and Microsoft as long-term strategic partners in mapping out its future. Customer Forums: In addition to using its sales and support mechanisms to stay close to customers, Dell held regional forums to stimulate the flow of information back and forth with customers. [...]
[...] How Dell Computer uses technology to gain competitive advantage and retain its leader position on the PC market? 1. Introduction Dell is a master at direct selling, and bypasses middlemen to deliver PCs cheaper than any of its rivals. Few would quarrel that it's the model of efficiency, with a far-flung supply chain knitted together so tightly that it's like an electrical wire, humming 24/7. Yet, all this has been true for more than a decade. And although the entire computer industry has tried to replicate Dell's tactics, none can hold a candle to the company's results. [...]
[...] During the years of blistering growth that followed, Rollins ascended to Dell's inner circle of advisers, and when its PC sales started to slide in 2000, he drove the company to sharpen its execution, cut costs, and waged an all-out price war that devastated rivals. Now, he's the point man for an audacious expansion plan. But it's Rollins' fascination with history that's behind an attempt to remake Dell's corporate culture. He believes that if Dell is to last, it must learn to value more than just the machine-like execution for which it's famous. [...]
[...] Secondly, because Dell's partnership with a supplier was long term and because it committed to purchase a specified percentage of its requirements from that supplier, Dell was assured of getting the volume of components it needed on a timely basis even when overall market demand for a particular component temporarily exceeded the overall market supply. Thirdly, Dell's formal partnerships with key suppliers made it feasible to have some of their engineers assigned to Dell's product design teams and for them to be treated as part of Dell. [...]
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