Strategy Management at Dell Inc.

Paper Summary:

This paper examines the different set of strategies Dell Inc. instigated to build and maintain a new competitive advantage to overcome problems that arose from cost pressures. Specifically, the paper describes the price wars that took place in the computer industry and how Dell felt they could generate higher profits by setting up manufacturing facilities in India or China and the strategies that would need to be formulated to ensure success.

From the Paper:

"The modern business environment is characterized by intense competition and this trend is particularly pronounced in the computer hardware industry. Dell Inc. had been implementing the direct marketing strategy in order to maintain its profits even when its competitors had been experiencing declining profits as a result of rising costs. However the direct model was no longer working for Dell as evident from plunging stock prices. Therefore the company could not afford to maintain the status quo any longer and had to formulate a different set of strategies in building and maintaining a new competitive advantage. The same problems that had been plaguing Compaq and HP were now becoming problems for Dell as well. These problems stemmed primarily from cost pressures which resulted from the trend of fast obsolescence characterizing the computer hardware industry. Initially Dell had been able to keep costs under control by paying special attention to basic metrics like return on capital and inventory management. However this strategy was no longer working and now the management at Dell faced the challenges of managing change in strategy formulation."

Sample of Sources Used:

• Aaker, David A. (2004). Strategic Market Management. McGraw Hill/Irwin.
• Armstrong, Michael. (2005). Strategic Human Resource Management. Prentice Hall.
• Dess, Gregory G., et al. (2007). Strategic Management: Creating Competitive Advantage. McGraw Hill/Irwin.
• Fred, David. (2006). Strategic Management: Concepts and Cases. Prentice Hall.
• Hill, Charles., and Gareth Jones. (2007). Strategic Management Theory: An Integrated Approach. McGraw Hill/Irwin.

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