Dells Business Strategy - Case Study Example

Dell Inc Introduction Dell Inc is among the world’s leading computer technology corporation. Over the years, the company has experienced tremendous growth and success. Much of the company’s success can be attributed to its effective business strategy. With time, the computer technology industry has become more competitive and demanding due to continuous improvements and revolution of technology. Nevertheless, Dell has managed to maintain its competitive edge in the market through innovative business strategies (Martinsons 2005; Kraemer & Dedrick 2001). This paper seeks to critically evaluate business strategies employed by Dell Inc. The SWOT analysis model will be used to analyse the effectiveness of the business strategies employed by Dell Inc. Additionally, this paper will examine Dell’s strategic leadership. Dell’s Business Strategy In reference to Waddell, Devine, Jones & George (2007) a business strategy comprises of a cluster of decision about what goals a company intends to pursue, what action the company intends to take and what resources the business hopes to use in order to realise its goals and objectives. In his article, Jones (2012) examines some of the business strategies that Dell employs so as to enhance its competitive edge in the market. In this article, Jones reports how Dell is launching its new and expanded cloud services in order to enable its clients to choose solutions that will enable them to realise better business results. The new and expanded cloud services will enable the company’s clients to enhance their security, access real-time storage, utilize large and small workload capabilities and easily access online configurations of their cloud services. Jones further observes that the new Dell Cloud services also known as the “Dell Cloud Dedicated” will provide clients with customised services by assigning each client individual servers which will be coupled with a variety of networking, storage, and managed service options. As a result, customers can take advantage of their private cloud computing and make it their extension data center. Moreover, in order help its clients to effectively develop a cloud strategy, Dell also provides to its customers a portfolio of Cloud Computing Consulting and Virtualization services which incorporate a ‘Virtualization Readiness Assessment (VRA) model’ , ‘a Cloud Readiness Assessment (CRA) model’ and a Virtualization Health Check Service (Jones 2012). In addition to this, Dell has also made significant efforts to improve on the leadership of the company by recruiting experienced and innovative leaders. For instance, the company recently recruited Marius Haas, a 20-year industry veteran to head its enterprise solutions. As the president of Dell’s enterprise solutions, Haas will be responsible for ensuring that the company offers to its customers easy-to-manage and robust datacenter infrastructures (Dell 2012). SWOT Analysis Jones (2012) provides great insight on the strength, weaknesses, opportunities and threats embedded in Dell’s business strategy. A critical look at the article shows that Dell’s strength is embedded in the strategy of its business model. For instance, Dell’s cloud services enable the company to directly interact with its customers. Consequently, this has given the company increased advantages over its competitors since the company’s cloud services provide a platform for increased contact and communication between the company and its clients. Easy communication between Dell and its clients enables the company to effectively respond to the specific needs of its clients thus enhancing customer loyalty. Secondly, the strength of Dell’s business strategy is embedded on the customization of its products and services. Jones (2012) observes that through the company’s cloud services, Dell provides tailor-made solutions to the needs of its clients. The customization of its cloud services has enabled Dell to gain competitive advantage in the computer technology market segment and as a result made Dell the preferred option for individual clients large businesses and organizations. This is mainly because customers are able to access products and services that are relevant to their business needs (Ciuzon 2009). Another key strength of Dell’s business strategy is embedded in its approach of providing a wide range products and services. Jones article depict numerous services that Dell’s cloud dedicated platform provides. For example, this cloud service provides data services, consulting services, virtualization services and virtualization health check services among many other services (Jones 2012). Schmid, Kebler, Behrend & Krasel (2005) concurs with these sentiments by arguing that Dell’s business strategy enables the company offer products and services such as on-site maintenance online purchases and online technical support (Ciuzon 2009). This in turn enhances the company’s increased personal interaction with the market. With time, the company has been able to launch the latest and most relevant technologies that resonate with the needs of the market unlike some of its competitors who rely on indirect distribution and communication channels in order to interact with their customers. Over the years, Dell’s business strategy has helped the company build its image as a reliable and unparallel service provider (Schmid et al 2005). While Dell’s business strategy has helped the company to have a competitive edge over some its competitors, some aspects of the company’s business strategy may work against the performance of the company in the market. For instance, Dell’s cloud dedicated services seem to target customers who are technologically savvy. The applications incorporated in this cloud service are complex in nature and seem to target second time users (Martinsons 2005). The fact that the company provides customised cloud services shows that the customers using these services need to have high levels of knowledge and understanding about how the services work. This in turn alienates first time users and other customers who are not conversant with complex technological services (Martinsons 2005). The diversification of Dell’s products and services provides the company with an opportunity to move beyond its current product and service and compete on a more advanced footing with other key competitors in the market. Change in technologies is a major threat to the company’s current business strategy which heavily relies on its technological inventions. With time, the computer technology industry is bound to become more competitive and demanding due to continuous improvements and revolution of technology, this may in turn pose a threat to the company’s business strategy and overall performance in the market (Jones 2012; Martinsons 2005). Management and Leadership in Dell Inc Jones (2012) depiction of Dell’s current business strategy provides an insightful outlook on the company’s leadership and management. As it stands, Dell Inc is one of the world’s leading computer technology corporation which has experienced tremendous growth and success over the years. Much of the company’s success can be attributed to its effective business strategies which were formulated by the company’s leadership or management. In most organizations strategic planning is often conducted by the management. Waddell et al (2007) and Gupta (1992) observe that management is an intricate process that comprises of five key functions namely; planning, organising, leading and controlling. These management functions are depicted in Henri Fayol’s model of management functions. In formulating the company’s business strategy Dell’s management evidently had to carry out these four management functions depicted in Fayol’s model of management functions. For instance, the company’s management had to foremost take part in planning by forecasting the needs of its customers and developing action plans on how to meet these needs through its cloud services. Secondly, the company’s management had to organise resources and manpower needed in the implementation of the developed action plan. Moreover, in order to effectively launch its cloud services, the management of Dell had to lead by motivating employees to achieve the set objectives. This function also requires that managers should communicate, and supervise different tasks performed by employees. In the case of Dell, controlling entails coordinating tasks and measuring the tasks against the established goals (Waddell et al 2007; Gupta 1992). Conclusion This essay has critically examined the business strategies employed by Dell using the SWOT analysis model. Additionally, this essay has examined Dell’s management and leadership using Henri Fayol’s model of management functions. Through a review of Jones (2012) article, it is established in this essay that, Dell’s strength is embedded in the strategy of its business model particularly with regards to the customization of its services and products and the wide range of services that the company provides. These aspects have given the company increased advantages over its competitors since the company’s cloud services provide a platform for increased contact and communication between the company and its clients. These services also help to meet the specific needs of customers thus promoting customer loyalty. Nevertheless, increased competition and changes in technologies is a major threat to the company’s current business strategy which heavily relies on its technological inventions. References Cuizon, G., 2009, SWOT Analysis of Dell Computers Strengths, Weaknesses, Opportunities and Threats Analysis, September 5 2012 from Dell, 2012, Dell Names Marius Haas President of Enterprise Solutions, September 5 2012, Gupta, C. 1992, Contemporary Management, APH Publishing, New Delhi. Kraemer, K., Dedrick, J., 2001, Dell Computer: Using E-Commerce to Support the Virtual Company, Center for Research on Information Technology and Organizations, University of California, Irvine. Jones, K. 2012, Dell continues to expand breadth and accessibility of cloud services, September 5 2012, Martinsons, M., 2005, Explaining Dell’s Success from a Strategic Management Perspective, viewed on September 5 2012 Schmid, N., Kebler S., Behrend S. & Krasel M., 2005, The Dell Company - A Strategic Analysis, viewed on September 5 2012< http://www.grin.com/e-book/57007/the-dell-company-a-strategic-analysis> Waddell, D., Devine, J., Jones,G.& George, J. 2007, Contemporary Management , 2nd Ed,. 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