Management Control System on Dell

Topics: Personal computer, Dell, Michael Dell Pages: 4 (987 words) Published: October 11, 2013
Chapter :
Measuring & Controlling Assets Employed

Case :
Dell Computer Corporation

Summary :
Dell Company
In 2005, Dell Computer Corporation, which headquartered in Austin, Texas, was the world’s largest direct-selling computer company, with 57.600 employess in more than 80 countries and cutomers in more than 170 countries. Dell’s climb to market leadership was the result of a persistent focus on delivering the best possible. In less than two decades, Dell became the number one retailer of personal computers, outselling IBM and HP.

The main strategy of Dell Inc is direct selling, which sell the products directly from manufacturer to consumer. The company was based on a simple concept : that Dell could best understand consumer needs and effienciently provide the most effective computing solutions to meet those needs by selling computer system directly to customers. This direct model eliminated retailers, who added unnecessary time and cost at least 20 – 30 % mark up from purchasing price, and also allowed the company to build every system to order, offering customers powerful, richly configured systems at competitive prices.

The traditional value chain in the personal computer industry was characterized as “build-to-stock.” PC manufacturers, such as IBM and HP, designed and built their products with preconfigured options based on market forecasts. PC Manufacturers controlled the upstream part of the value chain, giving the downstream part of middlemen.

Two trends in the early 1980’s allowed Michael Dell reengineer the PC industry value chain, first corporate customers were becoming increasingly sophiscated and therefore did not require intense personal selling by salespeople. Second the different components of a PC became standard modules, permitting mass customization in PC configuration.

Dell Computer’s direct model departed from the industry historical rules on several fronts : The company outsourced all components but performed...
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