Dell: Organizational culture and business model

Dell Inc.

I have worked with Dell computers for the past ten years. Their products and service has been great in the work environment. I have an assigned Dell representative that is my central point of contact. I am able to get quotes and pricing over the phone or thru email. The pricing I have received from Dell is better than other computer vendors. So I have decided to do my paper on Dell Computer Corporation

Background

Michael Dell created the business in 1984 out of his dormitory as a student. He belief that my selling computers directly to customers, you can understand their needs much better and satisfy their need. In 1985, the company produced the first computer of its own design the “Turbo PC”. The company changed its name to “Dell Computer Corporation” in 1988 and began expanding globally.

“There were obviously no classes on learning how to start and run a business in my high school, so I clearly had a lot to learn. And learn I did, mostly by experimenting and making a bunch of mistakes. One of the first things I learned, though, was that there was a relationship between screwing up and learning: The more mistakes I made, the faster I learned.

I tried to surround myself with smart advisors, and I tried not to make the same mistake twice. . . . Since we were growing so quickly, everything was constantly changing. We’d say, “What’s the best way to do this?” and come up with an answer. The resulting process would work for a while, then it would stop working and we’d have to adjust it and try something else. . . . The whole thing was one big experiment.

From the beginning, we tended to come at things in a very practical way. I was always asking, “What’s the most efficient way to accomplish this?” Consequently, we eliminated the possibility for bureaucracy before it ever cropped up, and that provided opportunities for learning as well.

Constantly questioning conventional thinking became part of our company mentality. And our explosive growth helped to foster a great sense of camaraderie and a real “can-do” attitude among our employees.

We challenged ourselves constantly, to grow more or to provide better service to our customers; and each time we set a new goal, we would make it. Then we would stop for a moment, give each other a few high fives, and get started on tackling the next goal.5.” Michael Dell (1998).

The Company was rebranded as Dell Inc, after it started selling televisions, handhelds, digital audio players, and printer. Dell is a top direct sales company in the world, and more than 100,000 employees work for Dell across 34 countries worldwide.

Organizational Culture

Dell is a global company operating in 34 counties, and more than 100,000 employees work for Dell. It is organized along geographic line into the Americas, Asia and Japan, and Europe, Middle East, Africa. Each of the regions has its own regional headquarters and its own assembly plant and supply network.

Dell’s business activities are organized in each region around different customer segments, although, each region has different managing method, but generally includes: relationship customers, home and small business and public sector customers, such as governments and schools.

Customer: They can commit relationship, providing the best products and services based on standard-based technology, and outperforming the competition with value and superior customers’ experience.

The Dell Team: they believe their continued success lies in teamwork and the opportunity each team member has to learn, develop and grow. They are still committed to developing, retaining and attracting the best staff members.

Direct relationship: they believe that the direct relationship with customers, partners, suppliers and each other, and operating without inefficient hierarchy and bureaucracy, which can make them, do best than other competitors.

Global Citizenship: They are committed to understanding and respecting the laws, values and cultures wherever they do their business; profitably growing in all markets and contributing positively in every community.

The Dell business model seems simple in its concept, but in fact is very complex when it comes to its execution.

First, they did not use agents or storefronts to sell the products. They use direct web sales or channels to sell Dell computer for customers. Customers should be able to order on the Internet when they want to purchase the computer.

Second, when building made to order computers Dell needed to have parts and components in stock to build a wide range of user specific configurations with little lead time.

Third, because of fill order quickly, Dell has excellent manufacturing and logistics capabilities supported by information system that enable it to substitute information for inventory. On the one hand, Dell Company can use their particularly sale channel gain more profit and market share. On the other hand, this business model can give customer maximum satisfaction via minimum distribution channel costs.

In effect, Dell has had to create similar but distinct functions in each of the major regions, and to future customize its marketing and service functions for individual countries. The process of globalization has shaped Dell’s own structure, and leads Dell run to the largest computer company in the world.

SWOT Analysis

Strengths: price for performance, customization, service and support, latest technology, superior shareholder value, unique information from the relationship with the customer, strong track record of moving at the right time; inventory move fast; ratio of accounts receivable is high. Dell has a major strength in market share and product cost. Consumers can not buy computers, or any other form of technology, fast enough to keep up with the advancements. Dell offers these products at a much lower price than its competitors and allows consumers to be able to have the newest products as soon as they hit the market. This is a huge advantage over their competitors. The people who purchase the technology are getting younger and younger and the only way to take advantage of the growing customer base is to offer the products at a lower price.

Weaknesses: The major weakness of Dell is the quality of the products and customer support. As a consumer I do understand that you get what you pay for. When buying a $200 desktop from dell rather than a $2,000 desktop from Apple, I realize that the quality of the two will differ. A way to level the playing field would be to have top notch customer service to help the customers when something does go wrong. This is not the case with Dell. They have chosen to outsource their customer service to foreign countries in order to cut costs. This has only frustrated the loyal Dell customers and made buying a Dell less attractive.

Opportunities: the Internet offers special potential in expanding internationally; e-service; the direct model offers unique opportunities to build different types of relationship with suppliers and customers; opportunity from the alliance between Dell and American Online. The global economy is a huge opportunity for Dell’s low cost strategy is a perfect fit for growing economies around the world. As countries like India and China become more productive, their people will have more disposable income. Dell can offer them affordable computers that they will be able to use to be even more productive. In the world today, if you are not a global company, you are not a major player in the industry

Threats: The global economy is a huge opportunity for Dell’s low cost strategy is a perfect fit for growing economies around the world. As countries like India and China become more productive, their people will have more disposable income. Dell can offer them affordable computers that they will be able to use to be even more productive. In the world today, if you are not a global company, you are not a major player in the industry

Conclusion

In conclusion, Dell Inc. is very successful in the global markets as a result of their direct sell business model. Dell lags its competitors in quality and global position. If Dell was able to increase these two areas, they would be the top reseller. It also shows that they have positioned themselves to be one of if not the top computer retailer in the world. The competitive advantage of being the low cost provider has given Dell enough of the market to allow them to continue operations and move into the new markets. They can produce different computer to supply the different level of customers, Moreover, they continue to develop new computer and improve their organizational culture, business environment and selling business model, in order to increase their customer base.