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Strategic Management of Four Different Companies - Case Study Example

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The paper "Strategic Management of Four Different Companies" highlights that the main issues facing Gardner management are whether to appoint a staff member like Bill May as the new plant manager which requires a very strong technical or engineering background with line management experience…
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Strategic Management of Four Different Companies
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Download file to see previous pages Michael Dell had started manufacturing his own computers (although at this point, it is more correct to say he started assembling his own PCs) and soon targeted large corporate accounts with his low-cost computers. He also started to be more aggressive in his marketing campaigns, putting out ads in computer trade publications in time with the first-ever sales and product catalog of his company.
About a decade later, sales reached nearly US$3.5 billion annually and by 2001, reached the top rank in global market share in computer sales (also number one in the U.S.). However, this rapid growth soon reached a plateau due to a disorganized corporate structure from having very rapid growth. It abandoned its retail outlet distribution system and went back to direct distribution which was its original business model responsible for its success. Its business model is anchored on an efficient supply-chain management and logistics system that delivers made-to-order PCs direct to consumers. It also deliberately waits for few months for any new computer technology (whether hardware or software) to become standardized for it to be able to leverage its core competence in the fast assembly of PCs. This minimizes its risks to technological obsolescence in an industry that is characterized by very rapid changes.
Main Strategic Issues – Dell, Inc. is faced with changing business and economic environment in which its competitors were able to catch up or match its low-cost pricing. This put pressure on the company finances as profit margins were squeezed. The reductions of its overhead expenses plus manufacturing efficiencies gave it a virtual monopoly of low-cost PCs but not anymore. Further, its leverage in terms of purchasing power from its supplies had been somewhat dented with the slowdown in PC sales worldwide to just 5% annually compared to torrid growth rates in prior years. Lastly, the biggest challenge facing the company is the vast change in consumer behaviors. ...Download file to see next pagesRead More
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