Strategic Management Case Study: Dell: Selling Directly, Globally (Hitt, Irenland and Hoskisson, 2003).

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Grace Ong 203-0106-01

Assignment 1 MGT 451

Strategic Management

Case Study Analysis

Case 12: Dell: Selling Directly, Globally (Hitt, Irenland and Hoskisson, 2003).

Questions

  1. What type of strategy has Dell Computer followed?

Dell Computer Corporation under the longest serving CEO, Michael Dell had used direct business model in his company. The commitment to evaluate its external environment before making strategic decisions is part of the pattern Dell follows when using its direct business model. Its success was founded on the direct business-to-customer model, which revolutionised the PC industry, at first in the US and then in over 170 nations around the world.

The direct model was founded on a simple concept: that by selling personal computers directly to customers whereby Dell could best understand their needs and provide the most effective computing solutions to meet those needs. Dealing directly with customers meant that Dell knew exactly what its customers wanted. Only by three ways Dell communicates with the customers, which are , voice-to-voice and face-to-face.

Dell even applied an expansion strategy that involved selective introduction of the direct model, country by country. The strategy followed the same pattern in each country. The benefits of the direct model have increased attention to customer experience and satisfaction.

The standards for pricing and performance worldwide which includes cost-efficient, fast and customer friendly operation has thrust Dell to the top of the computer industry all over the world.

In conclusion, Dell’s direct business model has led him to be one of the top PC manufacturers in the world and Dell Computer Corporation will continue to grow intensively without any interference with the Dell Direct Model, the very reason for the company’s past success.

  1. How has Dell implemented its marketing strategy?
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Dealing directly with suppliers was essential for the successful application of Dell’s direct model. Dell chose to build PCs to order, and Dell was the first PC manufacturer to offer free installation of applications software as a standard service option. Just-in-time inventory control created advantages that had an immediate implication on customers. Inventory costs were kept to a minimum, and new technological breakthroughs could be delivered to customers within a week as opposed to two months.

Dell bought random-access memory (RAM) chips and disk drives for IBM PCs at cost from IBM dealers and Dell resold the components ...

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