The performance of Michael Dell as CEO

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Michael dell performed well in his role as a dells CEO and Chairman he seek proper guidance by hiring lee walker as a CEO and to mentor him. Michael remained as the company's chairman and he overcame his shyness, learnt to control his ego and turned into a charismatic leader with an instinct for motivating people and winning their loyalty and respect.

Michael dell did perform the five tasks of crafting and executing strategy well First he develop a strategic vision for dell why want it to become a million dollar company.Second he set the objective to reach his target .Third he crafted a strategy to achieve the objectives and vision. Forth he start to implement and execute the strategy .Finally he monitored the developments and started evaluating the performance of his employees and made corrective adjustments.

There are four different elements to dells strategy

1. Selling directly to customers is the most efficient way to market the company's product.

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2. Allowing customers to purchase custom-built products and custom-tailored services is the most effective way to meet customers' needs.

3. A highly efficient supply chain and manufacturing organization grounded in the use of standardized technologies and selling direct paves the way for a low-cost structure where cost savings can be passed along to customers in the form of lower prices.

4.Dell delivers added value to customers by giving them the best technology and by delivering the best combination of performance and efficiency .

Dell uses the low cost provider strategies by selling directly to the customers to save money instead of going trough distributers. This way they could use the extra money to focus on the customers needs.The pieces fit together well and due to that dell in gaining more market share and increasing in sales

Dells expansion into other It products and services is a good strategic sense because the worldwide IT industry grow from $1.2 trillion in 2007 to $1.5 in 2010. The IT industry is a growing one so dell needs to look in to this area because it will generate the company good money.

Dell strategy seems to be increasing in a slow and effective way this show that the strategy is working .

Ratios

2008

2007

2006

2005

 

Profitability:

1.gross margin

2.operating profit margin

3. Net profit margin:

4. ROA

5. ROE

6. EPS (basic)

 

 

19.1%

5.6%

4.8%

10.7%

0.79

$1.33

 

 

16.6%

5.3%

5.8%

10.07%

0.59

$1.15

 

 

17.7%

7.9%

6.5%

15.5%

0.89

$1.50

 

 

18.4%

8.6%

6.1%

13.0%

0.46%

$1.20

 

 

Swot analysis

The analysis

Strengths

Low cost provider, good marketing, and good customer service.

Weakness

Decreasing in consumer demand

Opportunity

Has the ability to expand and progress in the market place.

Threats

HP,acer,IBM

Key success factor/strength measure

Important weight

Strength rating

Score

Strength rating

score

Quality/product performance

0.10

8

0.8

8

0.8

Reputation/image

0.10

8

0.8

7

0.7

Manufacturing capability

0.10

5

0.5

6

0.6

Technology skills

0.05

7

0.35

8

0.4

Dealer network/distribution capability

0.05

2

0.1

4

0.2

New product innovation capability

0.05

6

0.3

7

0.35

Financial resources

0.10

5

0.5

6

0.6

Relative cost position

0.30

5

1.5

7

2.1

Customer service capabilities

0.15

7

1.05

8

1.2

Sum of importance weights

1.00

Weighted overall strength rating

53

4.65

6.95

 

 

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Hewlett-Packard's strategy in PCs are more appealing than dell strategy because

hp has direct sales force that sold direct to large enterprises and select other customers a very sizable share of HP's sales of PC's were made through distributors, retailers and other channels which include

Retailers that sold HP products to the public through their own physical or internet stores.

Resellers that sold HP products and services with added values to target customers groups.

HP did not have direct relationships with smaller reseller.

HP had little or no presence with independent distributor.

Independent software vendors help HP in selling their computers.

Systems integrators helped HP withy customizing their IT solutions.

2. HP in house personnel designed the company's PCs and 68 servers the vast majority were assembled by contract manufacturers located in located in various parts of the world.

Top executives charged each HP business with identifying and implementing opportunities to boost efficiency and lower cost per unit.

Company personnel began working more closely with large enterprise customers to find ways to simplify their experience with information technology.

A number of new products and services were introduced.

HP spend close to 7 billion to acquire new software ,technology and services.

The company prepared to capitalize on three growth opportunities in the next five years.

Michael needs to build a stronger customer service unit that could take care of the customer and give them all the help and information they need. Satisfied customer will led to promoting the companies name with will give dell a wider range of customer.

Dell needs to improve its customer's service and the marketing strategy in order to gain more market share. Dell should also start advertising outside the United States and export to more foreign countries which will help increase the revenues and that way it will also gain more market share.