dells success
Dell Computer is arguably the most successful business among those established within the last twenty years (Microsoft just misses qualifying under this timeframe). As I have stated recently in different venues, I believe that this company provides a classic example of how the principles of strategic management have been used to translate an innovative vision into a successful and sustainable enterprise. Dell Computer has also realized tremendous benefits from its application of information technology. IT has been used not only to create competitive advantages at the operational level, but also to introduce an unprecedented type of strategic information management. As a result, I am pleased to accept the invitation from the Stockholm School of Economics to review the success of Dell Computer, and to explain it from a strategic management perspective. Michael Dell founded Dell Computer in 1984. At the time he was only 19 years old, and in his first year of studies at the University of Texas in Austin. Michael Dell had a simple but powerful vision: that personal computers could be built to order and sold directly to customers. This followed from his be
However, within a year it was selling its own brands of PCs. Remarkably, Dell has been able to replicate its direct sales approach in dozens of other countries. Several times it had to refine its strategy even as it was implementing it. Since its initial public offering of common stock in June 1988 at $8. However, it has been hit hard by an overall slowdown in PC sales that begin in the second half of 2000. Dell was active in recruiting foreign nationals graduating from U. For example, Dell responded rapidly when Intel shipped faulty Pentium chips to PC makers in the mid 1990s. Most of its rivals did not have this capability. They continued to concentrate on product design and after-sales service even as Dell's energy went into providing an affordable product and reliable delivery. Most of Dell's customers in the 1980s were hobbyists and experienced PC consumers. lief that the PC, made up of little more than software from Microsoft and chips from Intel, was rapidly becoming a commodity product. By 1998, its Internet sales accounted for more than half of the firm's total revenues, which by then had surged to more than US$ 20 billion. During 2001, Dell Computer was almost equal with Compaq in terms of global PC sales (each had about 12 percent of the market). As a result, Dell has sustained a comparative advantage as a result of its lower overhead costs.
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