Strategy Implementation at Dell Computer (Essay Sample)

Strategy Implementation at Dell Computer
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Abstract
Planning and organization are important aspects of consideration if any business entity has to achieve maximum success and effectiveness. Founded in 1984 by Michael Dell, Dell company has grown today into a global leader in production of personal computers. The organizational structure of Dell Company has proved to be efficient and effective. A comparison to other organizations demonstrates the importance of an organizational structure and shows commonalities as well as differences in structure. This paper explains how Dell Company’s changes in organization structure have affected the company and whether this changes have been having positive impacts to the company.
Case background
In 2001, Dell Company was the world’s largest personal computer vendor, continuing to expand its market share and post profits in an industry stressed by slumping sales and billions of dollars in losses. As Dell has gone beyond its home market in the United States, it had to adjust its business activities and organizational structure to the different markets in which it operates. In effect, Dell has been continuously changing its organizational structure in these new regions. Since its inception to the 1990s, Dell Company was operating in a decentralized kind of organizational structure. From the 1990s to the mid-2000, Dell Company had changed its organizational structure and was operating on a bureaucratic and autocratic organizational structure while from the year 2000 to present; the company has been operating on hierarchical and structurally bulk organizational structure (Harsley, 2009).
Why Dell has moved to different kinds of organizational structures over time?
In reality, the world has become a global village and the global economy requires that different business organizations adjust their organizational structure in order to embrace the success that comes with globalized economic systems (Fredly & Sarah, 2010). Most of the prominent organizations and companies including Dell Company have been exposed to the challenges that arise due to the presence of foreign markets and competition. Indeed, Dell Company and other rival companies have been constantly faced with the need to reshape themselves in order to accommodate the international competition and discover new methods that help them exploit the marketing opportunities in every corner of the world. Failure of some companies to embrace a global viewpoint has made them to collapse and this has been recognized as the main mistakes that managers of such any company can make.
In 1984, Dell Company operated alone since the demand for their products was not big. However, as the company grew over time, demand for the produced commodities increased thus necessitating a need to restructure the supply chain and the overall management (Mangan & Lalwani, 2008). In order to serve the great demand posed by the customers, Dell Company was required to employ more workers and consequently allocate tons of work to each of the employees. As the industry grew bigger and bigger, Dell who was the head of the company could not work alone or do everything in the company without the help of other people who were supposed to provide managerial skills within the administrative positions. The only option that was left is for Dell to acknowledge the strength of a functional oriented management structure that would help the company realize its goals through managers who would work in different areas of the production and distribution process such as in manufacturing and marketing sectors. Moreover, the market sector for the company was increasingly becoming fragmented and the company was in a position to manufacture and market products within a wide range.
Dellas the head of the company therefore had a major obligation of establishing a more developed form of organizational structure that would increase flexibility in the rapidly changing marketing arena. At the same time, Dell would also be required to control his increasing number of workers in order to ensure that they worked in a way that was consistent with the established objectives of the company. With all these requirements being the major points that would guarantee the success of the company, Dell had to revise his organizational structure for the company so as to create a conducive environment that would allow more sub-divisions which were necessary to better the services that were offered to the customer and effectively respond to the needs of the customer. As seen in many organizations, it is better to change the organizational structure of the company especially when the business moves to a different direction to make competitive advantage. With the above points been put into consideration, there was a great need for Dell to constantly change the organizational structure of the company.
Has Dell's performance been improved?
Answer: Yes, Dell’s performance has greatly been enhanced particularly from a change in its organizational structure. Firstly, forming the functional structure of the company and giving the power and authority to the manager helped the company to institute and develop a thin managerial and organizational culture that has greatly helped reduce the costs of running the businesses. Dell organizational structure has helped the company to follow the functional structure that has great importance especially in the areas of management, skills improvement, communication, motivation and controlling (McLeese, 2009). The greatest advantage of the constant changes that have been done by Dell Company is that these changes have facilitated transition from just production of goods to a system that is more focused on the needs of the customer. This has also enabled creation of balance between the local demand and the market trends and thus finally creating a strong customer focus.
Secondly, another major success that Dell Company has achieved through the constant changes has been through fragmenting the sub-division for particular groups of customers. Fragmentation has allowed Dell Company to better respond to the needs of their customer. Subsequently, this has increased the customer satisfaction in terms of their different needs. Moreover, grouping the sub divisions as per the customer group has helped the employees of the company to obtain more information about the company and therefore be in a position to specialize in their duties to serve the specific customers. Of course, this kind of organization structure has increased the productivity of the company. Besides this, Dell Company’s performance has substantially improved from making use of the shared intranet to standardize its activities in all divisions and in fact assimilate its activities to reduce the cost of production.
The third advantage of the restructured organizational structure is that it has enabled Dell company increase customer responsiveness and customizability, the changed organizational structure has greatly simplified the reporting relationships and it has also offered easier interdepartmental communication. As a result, this has led to benefits on the products and the market structure. This has also ensured availability of an opportunity for bundling of the products and finally allowing Dell to have a one face to its large number of customers.
How Dell has been trying to increase its performance and how its competitors such as HP and Acer have also been working to improve theirs?
The world of technology is highly unpredictable especially with the crisis events that are occurring. The ability to continue to interconnect is important to enhance survival through the unexpected situations. Dell Company has recognized this need and has been actively involved in the process of improving its performance amidst the hard economic conditions surrounding their business activities. The following are the measures that the company has been actively embracing in order to improve its performance over the years.
The first strategy the company has been adopting is improvement of the interaction between the customers and the employees during the crisis. This has helped the company to gather enough advice on the directions, establish status and tools that have helped through the hard time. Changes in the environment and the industry are the major factors that have directly affected the growth of the company. As competition has expanded, the computer industry has generally been struggling to survive. However, Dell Company has remained profitable and has stood up on the firm financial foundation. This has mainly been indicated by the ability of Dell Company to respond quickly and adjust to the environment.
The second way through which the company has tried to improve its performance is through being alert to the accelerating changes in the world of business such as in the developing trends and economies. Dell Company has improved its performance by recognizing the changes and acting on them so as to achieve its competitive advantage. Dell Company has been expeditious in its decision-making process and also execution of goal-oriented revolution that is in alignment with its organizational objectives and goals.
The third way through which Dell has improved its performance is by quick innovation and resourcefulness that has greatly helped retain its status amongst the top personal computers producers. Dell's plan to integrate stakeholders and customers feedback in the process of innovation and product design has ensured customer loyalty. These measures have enabled reduction of time and costs that would be incurred in the research and development process. This has also provided motivation to the employees. Apart from the above, this measure has also enabled rapid product development which incre...