This analysis describes the case of computer and peripherals industry especially the successful management of Dell Computer Corporation which grew twice as fast as its major rivals like Compaq, Gateway, Hewlett Packard and IBM. The main reason for the success of Dell was their "Direct Model" of selling computers which eliminated all traditional channels like distributors, resellers and retailers. Traditionally all its competitors like IBM, HP, and Compaq etc. used reseller, retailers and distributors to sell their computers to end users. IBM was the first company to launch its PC in 1981 and soon held 42% of the market. But the growth of IBM proved to be short Competitors of Dell like IBM, Compaq and HP tried to imitate the direct sell strategy but faced a lot of issues to do so not only because of inefficiencies in their value chain but also because of deviations in their business strategies which they were following since many years. IBM which moved from a market leader to third position in the market tried to replicate the direct sell strategy in its own way by initiating programs like the joint manufacturing authorization programs and the enhanced integration and assembly programs with its distributors and resellers such as MicroAge, Ingram Micro and Tech Data thus shipping heavily configured PC's to these distributors who in turn completed the configuration according to customer specifications. Also to integrate the value chain, IBM set component prices such that total costs were same for channel-assembled and IBM assembled PC's. To combat clones, it launched division Ambra to produce low end PC's with direct selling available through phone, mail and later on website. IBM failed to show results because of inefficient customer service, higher operating costs. It was also not easy to replace suppliers to smoothen the flow of goods. Compaq in 1994 became the world's largest manufacturer and had a large range of distribution networks. But in order to counter the direct sell strategy of Dell, it moved from a production system in which it relied on forecasts made by channel
Matching Dell Outline with General Questions Read the following instructions before proceeding. 1) Write in a continuous, narrative style within each question. Keep section headings. 2) The questions in the outline are to help you analyze the case and develop your own thought. 3) Limit your memo to three pages of text. Diagrams and tables do not count as part of the three pages of text. Do not use bullet points. 4) Double-check your grammar before submission. It matters!…
Matching Dell 1. Why has Dell been so successful despite the low computer industry profitability? Despite the low profitability in the computer industry, Dell was capable of propelling themselves to the top and establishing great success. We know that this company’s success is not something that happened over night, and it was something that must have evolved over time as the company grew. What evolved was the company’s management structure. Dell knew that if something was too big it was impossible…
in1990, Dell emerged as a strong business entity in the computing industry. With the advent of personal computing, the major players in the industry were IBM, Compaq and HP. Between 1994 and 1998, Dell's growth was faster and twice its major rivals (IBM, Compaq, Gateway, and Hewlett- Packard). It provided high performance PC at a very low price. Through the introduction of Dell's Direct Model, it enjoyed high competitive advantage and earned quite a success. Using the “Direct Model”, Dell sold primarily…
MEMO Date: February 7, 2015 Re: Observations from Matching Dell case History of low average profitability of the PC industry Prior to 1980, there were several startups offering pre-assembled personal computers but it was not until 1981 when IBM entered the market that any one firm held significant market share. IBM gained almost half of the market quickly but during that time, they had not been able to gain much efficiency. They were purchasing many components and selling through retail stores. They…
DELL PEROT SYSTEMS SUMMARY OF BENEFITS 2010 MEDICAL INSURANCE Eligibility: Date of hire. Dependents covered to age 23; full-time students to age 25. |Medical Insurance | |Great West / Cigna Healthcare | |Standard Plan…
business model predicates on knowing the customer preference and demand better through constant customer. The complexity of gathering the customer preference when the Information systems and Internet were not widely used was an enormous challenge for Dell. As referenced in the chapter in spite of his perseverance and tenaciousness to hit 100% of orders from Internet, at any point of time 90% was the plateau. Their inability to know the customer needs failed them in the Olympic project (Krames, 2003…
Organizational Theory BUSI3103 Class 6 Jim R. Bounds/Bloomberg/Getty Images Defining Technology • Technology is an organization’s production process and includes work and procedures as well as machinery • “technology” different than electronic technology Core vs. Noncore Work Core vs. Noncore Work • Core: work process that is directly related to organizational mission – E.g. teaching at a university • Noncore: a department work process that is important to the organization but is not directly…
Intermediate Accounting Chapter One • 1984 Michael Dell of the University of Texas created PC’s Limited. The company manufactured computers after it has been ordered, otherwise known as just-in-time (JIT) approach. • In 1985 PC’s Limited began with $1,000 from Michael, $300,000 in expansion capital, and the revenue topped $73 million. • The company was later renamed Dell Inc. which in January 2011, exceeded $2.6 billion in profits and $61 billion in revenue. In 1988 an initial public offering…
the FASB is the one who puts together the rules. This is what we could have used to notice the Lehmann Brothers was “burning up cash” . Companies can spend tons of money while also borrowing lots of money resulting in a net positive cash flow Matching concept – When we generate income we need to also attribute all expenses associated with that income. We need it to all show up. Annual Report – Includes financial statements, notes to FIS, management analysis (explanations on why things went…
Case 01 Matching The Firms: Separate the firms that would generate revenue through services. (Airline, commercial bank, social networking services, and computer software developer) 1. Airline: - M Being a service industry there would be no need for inventory; this narrows the firms down to E, G, M, & N. There would also be a high ratio of property plant and equipment in the asset section of the balance sheet due to planes; this narrows the firms to E & M. Firm M is being selected because…
