Strategies of Market Leaders:

Competitive Advantage

Best Practices:  Dell Inc.

Sustainable Competitive Advantage

 

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Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

 

Main source of Information: Direct from Dell, Michael Dell with Catherine Fredman

 

Case Studies New Business Models Listening To Your Customer Dell Inc. (case study), 3 Golden Rules, New Business Model

Dell Competitive Strategies

  • Speed to market

  • Superior customer service

  • A fierce commitment to producing consistently high quality, custom-made computer systems that provide the highest performance and the latest relevant technology to the customers

  • An early exploitation of the Internet

 

Success Stories

Michael Dell

Dell Inc.: Strategies that Revolutionized Industry

Dell Inc.: a Company Composed of Individual Owners

Dell Inc.: EON Solution

Strategies of Market Leaders

Sustainable Competitive Advantage

Fast Growing Company

Fast Company

Sustainable Growth Strategies

Characteristics of Successful Growth Businesses

Best Practices for Maintaining Effectiveness and Efficiency

The Power of Vision and Business Concept

Starting with an idea, Michael Dell created Dell Computer Corporation with $1,000 startup capital in 1984 when he was 20. Three years later, the market value of the company was $85 million. The private placement memorandum published in July 1987 listed and described the three key strengths that gave the company a competitive advantage:

  1. The ability to produce a line of high performance products compatible with accepted IBM standards. (In fact, many of Dell's products had features that were superior to IBM systems and were frequently top-ranked by publications such as PC Magazine and PC World.)

  2. The ability to maintain an efficient and flexible manufacturing operation resulting in a streamlined asset base.

  3. Dell's direct relationship marketing concept: "With an average of approximately 1,400 telephone calls received daily,

    • Dell gets real-time input from its customers regarding their product and service requirements, their views on various products in the market, and their response to Company advertising.

    • This input gives the Company a competitive advantage in tailoring its product offerings and communication programs to meet its customer's needs.

    • Direct relationship marketing eliminates the 25% to 45% dealer mark-up, thereby enabling the Company to price its products aggressively.

    • The Company's marketing strategy allows it to sell its products through Company employees who are trained specifically to sell Dell products.

Fast Decision Making

"Dell is the kind of company where everyone rolls up sleeves and get personally involved in the details of our business every day," says Michael Dell, the Founder of Dell Inc.. "This is, in fact, how we got to be successful: As managers, it's not enough to sit around theorizing and reviewing what those who report to us do. We frequently meet with customers and attend working-level meetings about products, procurement, and technology, to tap into real source of our company's experience and brainpower.

"Why bother? It's a way to get close to our people, for certain. But that's not all. Our day-to-day involvement in the business helps us establish and allows us to maintain one of the Dell's critical competitive advantages: speed. In this case, "staying involved in the details" allows for rapid decision making because we know what's going on.

"For example, when a problem crops up, there's no need for us to do more research or assign someone the job of figuring out what the issues are. Because we often have all the information at our fingertips, we can gather the right people in one room, make a decision, and move forward fast. The pace of business moves too quickly these days to waste time noodling over a decision. And while we strive to always make the right choice, I believe it's better to be the first at the risk of being wrong than it is to be 100% perfect two years too late.

"You can't possibly make the quickest or best decisions without data. Information is the key to any competitive advantage. But data doesn't just drop by your office to pay you a visit. You've got to go out and gather it.

"I do it by roaming around."... More