Dell Corporation: Strategy in Action

The term “strategy in action” is used in companies through several mechanisms. In most firms, however, the notion of strategy in action refers to the manner in which companies use these strategies to meet goals. These techniques include ideas and people combined to realize results. The events that led to Dell Corporation’s success can be considered as an example of strategy in action. The company managed to overcome near-bankruptcy and evolved into a highly noted firm. The path taken by Dell includes various strategies that focused on quality and customer interaction

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Production efficiency is an aspect that immediately concerned Dell. As pointed out by Deming (1986), quality results have to be emphasized in all areas of production. Porter (1983) further noted that technical approaches have to be developed through the segments in the market. For Dell, the initial strategy revolves around priorities when it comes to production. The manufacturing scheme of Dell focuses on the concept of the order first before producing the computer. The emphasis on quality is being outlined by the method used in producing computers. Dell values these procedures: reduce the cost of productions, treat suppliers as partners, load the computer with software, and ship the computer 6 days before order.

Dell has been dedicated to delivering quality computers to consumers. Because Dell eliminates the usual distributor-retailer scheme, the computers are delivered to the homes of clients. The system of selling prevents the tendency of the computers to be stocked in distributors and retailers. As the computers remain, the quality diminishes. Dell makes sure that customers are able to access their purchased computer as soon as the specifications are met and the right computer is assembled.

Oliver and Webber (1982) coined the process involving firms with suppliers. Dell thinks that suppliers provide advantages for the company. Using the parts of computers made by partner suppliers adds to the quality of the computer. Since most of the suppliers are also known to produce great computer parts, it is possible that Dell will be benefited. The use of products produced by suppliers eliminates the production cost and helps in the promotion of the computer. The partnership with suppliers ensures that Dell has enough supply of computer parts. Since suppliers are committed to supplying a certain volume of products, the shortage of such products will never be a problem for Dell.

Dell caters to the needs of households for personal computers. To conform to the demands of households, Dell uses technology designed to provide convenient use and optimum advantage. For businesses, Dell understands that the network system has to be improved. The technology of Dell secures that all kinds of transactions are done with efficiency. For government offices, Dell promotes fast-paced technology to free bureaucracies from criticisms. Dell assures that all government transactions are done with accuracy. The concept promoted by Dell collaborates with the needs of the target consumers and prospects

Another strategy implemented by Dell pertains to the use of value chains. Robertson and Ulrich (1998) explained that value chains allow firms to be competitive and productive. Manifesting this value chain aims to benefit Dell in many ways. Dell will eliminate spending on other activities in the value chain. Instead of acquiring costs for the distribution and promotional activities made by middle sellers, Dell sees to it that the company does the actual selling. Losing distributors and retailers provided Dell the flexibility in handling crucial activities.

The inventories are regulated and minimized. Even though computers are durable and imperishable, Dell observed that stockings tend to diminish the quality of computers. The value chain shows that computers are automatically delivered once produced and assured. Computers remain new and the system will function with the expected efficiency. The value chain allows Dell to adjust when the demand of clients changes. Since computers are made when orders are determined, manipulations in the specifications and features are readily done. In the system that Dell follows, the true buyers determine the demand for computers.

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Another evidence of Dell’s strategy in action can be observed in the firm’s inventory strategies. Dell is known as one of the firms that embraced just-in-time inventory (JIT). Hirano and Makota (2006) stated that JIT limits waste in production and improves quality in output. Ohno (1988) added that JIT ensures efficiency in production through reduction handling cost and delivery expenses. The logic in this method is emphasized in the production and delivery of computers to customers. In implementing this method Dell sees financial and operational benefits for the firms. The essence of the system is the fast dissemination of computers to make way for other productions. The use of the inventory makes way for Dell to introduce newly innovated computers in the market.

Dell can start promoting its new line of products. This serves as an advantage because it is Dell that comes first with new inventions. Another thing that makes the inventory method beneficial is that it helps reduce the cause of productions. Price movement in the market happens unpredictably. For Dell to adjust to changes in supply and computer parts prices, the earlier produced computers have to be dispatched.

The business sense of Dell is different when compared with the competition. The process of purchasing computers with Dell is simple. Customers have to write their desired computer model and the specifications. Then, Dell produces the specified computer and assures the quality of the unit. The unit is delivered at home for immediate use. Instead of visiting distributor shops and retail stores, clients need only to press the dial and transact with a legitimate Dell personnel. The company provides directional books with the computers to serve as a guide in the installation. Dell advises customers to call the CS hotline in situations when the process is misunderstood.

One of the aspects that Dell boosts is its ability to deliver fast results. Consider that in the 6 days, Dell manufactures and tests the computer. To guarantee the utmost quality, Dell manages time through an established system. The company recognized the need to improve the after-sales service of Dell. Hence a technical support network was established to strengthen the communication between Dell and the customers. The technical support team is primarily tasked to provide help to customers and receive comments and other relevant ideas.

The abovementioned strategies clearly exhibit the actions being taken by Dell. Aside from quality, Dell values the contributions of customer service to further boost product quality. According to Dall and Bailine (2004), success in a competitive industry is determined by how customer service is channeled. This contention drives Dell to enhance the relationship of the company with its clients. Turban (2002), noted that customers rarely observe the technical differences of products in the market. Thus the most important element that can provide Dell high returns relates to the delivery of adequate customer service.

As discussed earlier, the concentration of Dell strategies is focused on quality and customers. Since these strategies evolve, the company transferred some of the initiatives to marketing. The vital cog of Dell’s marketing efforts is guided by marketing audit. Brownlie (1993) stated that it is the initial stage in undertaking managerial initiatives in marketing. A marketing audit is a systematic and comprehensive approach that evaluates the marketing initiatives of the company. This is manifested to identify possible problems in the organization, personnel, and marketing activities. The information gained from this activity contributes to molding the marketing plan.

Promotional activities have to continue using all the options available. Television is an effective media and providing print advertisements is highly recommended. Most important, the company has to focus its promotional initiatives on the extensive use of the Internet. Aside from being cost-effective, the strategy has worked for most firms in the industry. Using the Internet to serve as Sales Avenue will further boost the income of the company. Moreover, the product needs to reflect the credibility and reputation of Woolworths. It has to satisfy the ideal preference of the consumers and be produced within the capacity of the firm.

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The strategies formulated by Dell are further targeted at the level of competition. The results obtained from the initial strategies of Dell have to be weighed against the leaders of the market. There are several tools that can be used to address this need. Benchmarking is used in top-of-the-line firms as an instrument to support continuous improvement and to boost competitive advantage. For effective benchmarking to happen Dell needs a strong strategic focus and operational flexibility in reaching company goals.

The efficient implementation of benchmarking requires planning, human resources training, and structured communication processes. The process when executed properly reduces cost and can support Dell’s budgeting and strategic planning process. McNair and Leibfried (1992) contend that benchmarking is designed to leave the past behind and embrace the future. The process used by Dell focuses on several aspects. The procedure needs to be guided by purpose and considers external catalysts. Dell has to ensure that the process can be measured and drives entities to provide sustainable results. The techniques used by Dell justify the claim that the strategies in action exist in the company.

Strategy Development and Organisational Learning

The process of learning in organizations depends on the needs of firms. There are several empirical pieces of evidence that point to the extensive use of learning in organizations. As discussed by Tucker, Nembhard, and Edmonson (2006) the process of organizational learning is better approached by creating project teams. This was evident in the strategy building that Dell showed as the company moved towards broad changes. Project teams have the capacity to get over barriers that resist change. It was emphasized in the study that the knowledge transfer becomes more successful when the source is highly reputable (Klein, et al., 2001).

Badger, et al. (2001) suggested that organizational learning provides positive effects in big firms. Learning enables big companies to be equipped with the capacity to manifest changes, for instance, technology transfers. The study specifically underlined the need for companies to invest in promoting learning within the organization and ensure that effective processes are being implemented.

The concept of organizational learning can be exhibited in several methods. In Dell’s situation, learning requires the integration of technical capabilities with several social elements. In achieving learning, Dell has to address several issues within the company. As discussed earlier, Dell personnel are required to be more flexible. In addition, employees have to understand the value of training. Dell has to reconcile the goals established by each person to the targets of the company. For instance, employees that plan to become specialists have to be accorded the proper tools. The best way to introduce learning is by aligning these initiatives with individual goals.

The model used by Dell starts with every employee. Once the person has been briefed, specific roles are accorded depending on the necessity and capacity. After the roles have been assigned, the employees are gathered into teams. These groups are provided with targets to meet and milestones to achieve. The groups can only be organized once learning on the individual level is established. Moreover, any form of a hindrance has to be addressed immediately. After the group has realized learning, the effect of these processes will be tested on the entire organization. By then Dell can determine the extent of learning channeled to all levels.

In pushing for learning, there are several concepts that have to be considered. Discipline is one of the foremost elements that need to be present. At the individual level, discipline is a vital component to achieve learning. The team level requires unity and synchronization. Teams that work as one will learn as one. This notion is true in Dell’s initiative to distribute learning. As an organization, consistency in the processes and methods is highly needed. When a company is consistent in learning, good results are expected to happen.

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The strategy of Dell required employees to become more flexible as demand for advanced technology arises. The learning curve of Dell personnel needs to be enhanced to ensure that the quality of products is sustained. Teo, et al. (2004) conducted a study on the impact of learning in guiding employees towards successful adjustments in complex technology situations. Based on empirical evidence, the learning approach used by firms can assist the employees to adjust in complex situations. Most important, the study discussed the extent of organizational learning manifested in firms. The learning capacity affects the performance of companies. As learning expands, Dell managed to compete with the market and become one of the industry leaders.

Learning in an organization is heavily focused on the capacity of employees to change. Dell realized this notion, hence training become a fundamental part of staff development. The company has pattered the process to Soft System Methodology (SSM) which involves situations that pertain to human activity components. Since the technical learning has been addressed, SSM touches on the non-technical development of employees. SSM is a scheme for intervening in problem situations without attempting to provide direct solutions; instead, the aim is to learn about taking purposeful action.

Despite its systematic nature, SSM is perceived to be applicable in the real world. A decision to treat a part of the real world as a system for problem-solving purposes has to be made consciously with transparency. The method suggests that systems capable of producing desired outputs frequently fail because the participants in these systems have differing views of the world, based on differing values and standards. In many situations including management, the resolution of these competing views can be a political process, based on the exercise of power.

Malcolm (2004) explained that SSM is most used in responding to problems that have yet to be understood. Dell initially was formulating the best available strategies for the company to move forward. The initial strategy involves measuring Dell’s capacity and potential weak points. This form of the application provides a holistic view of the business systems, helping to ensure that convincing effects of a change are recognized and accommodated. The methodology provides firms with different dimensions in addressing the problems that stall future growth and development. This is critical in the development process of Dell Corporation’s strategic sphere.

Checkland and Holwell (1998) have mentioned that SSM recognizes the complex environment in which human systems operate. Instead of searching for the one optimal solution or end-state, SSM value other solutions that are deemed as effective and efficient. Such a notion is highly dependent on the judgment of the solution and on the definition of a desirable system that can accommodate the needs of multiple stakeholders. SSM is acknowledged the reality of changes and how these modifications affect effective measures. The process emphasizes the modifying nature of the system and the company’s environment.

The strategies outlined by Dell are goal-driven and focuses on the desirable future and helps define the actions and changes that guide the company towards future success. In Dell Corporation, SSM is used as a gauge to determine success in the future. Constructing better results and promoting quality production schemes are achieved once the problems have been eliminated. SSM provides an ample scheme for firms to ascertain the crucial loopholes of their systems. This was one aspect that allowed Dell to define the areas where strategies will be laid out.

The Dell process directly addresses several difficulties and needs of sustainability planning, beginning with its treatment of the individuals and perceptions in systems. A key concept in Dell’s strategy building is that it takes an interpretative perspective on human systems. Dell explicitly provides that human systems can be modeled and understood in many different ways. The world and organizations are seen as complex systems and are difficult to understand ontologically. In social situations, if an agreement on the problem being addressed is unrealized, then a solution to the problem will most likely be unattainable (Maede, 2002). Integrating the changes in the system to the technological advancements of Dell’s process was a major challenge.

Soft System Methodology Stages

The development of strategies within Dell is guided by several stages. Couprie et al (2006) noted that these stages define the success and failure of corporate strategies. The first action that Dell took involves problem identification. Documentations were provided to serve as the company experienced in such predicament. The next step for Dell included meetings to determine the exact picture that the film depicts. Checkland and Scholes (1990) stated that these images are important to understand the parts of the problem piece by piece.

The third stage deals with the development of root definition, which is the participant-defined perception of the system functions, its rationale, and the desired results and outputs of the strategy. This is perceived as the core process where most efforts of Dell are accorded. The next stage requires the construction of a conceptual model that identifies the goals of the company. It ascertains the activities in the strategies and the intention of such endeavors (Forbes, 1995).

In the fifth stage, the conceptual model is compared with the real-world system to underline possible areas where changes are needed. This conceptual model will identify where problems and deficiencies exist between what is happening and what is desirable as defined by the models. The sixth change to address the disconnects’ or gaps between the conceptual model and the real world as identified in stage 5 are introduced and evaluated for feasibility. The final stage allows Dell to determine the rate of success gained from the strategies. The goal is to provide suggestions for changes and sustain the positive effects.

Dell continues to deliver cheap and quality computers to households, businesses, individuals, and government offices. Aside from the traditional strategies, Dell emphasizes innovation and the advantage of making headway decisions. As always, expect Dell to continue on its cost-cutting measures and the efficiency in the area of productions. Dell has dedicated enough resources to pave the way for the creation of Internet-generated products. In maintaining leadership in the market, Dell has to be flexible with the changes that happen in the surroundings. It has enough resources to succeed further; the road there will need some strategies.

For Dell, the strategy is simple; deviate from tradition and make use of other strategies. Firms have seen the ability of Dell to develop successful strategies. The first thing that made Dell distinct was the introduction of direct selling. Through this method, Dell was trying to be efficient and limit the costs of production. The customer-first attitude that Dell has promoted provided huge benefits for the company. Although early operations were unfortunate, the later years were robust and progressive. Other companies continue to channel their products to distributors and retailers.

Reference

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