The University of Newcastle GSBS 6060 Strategic Management

Presented by
 Outline
 Company Background
 Strategic Analysis
 Strategic Objectives
 Key Current Strategies
 Strategic Implementation: General Perspective
 Key Strategic Implementation Issues
Leadership
Organisation Structure
Innovation
 Evaluation of Strategy
 Recommendations
 Conclusion
Company Background
 Dell Inc. established in 1984 by Michael Dell
 Operational regions : Americas; Europe, Middle East and
Africa (EMEA); Asia-Pacific and Japan (APJ)
 Today the number one supplier of computer systems in the
United States and second worldwide
 Strategic Analysis
General • Demand shifting towards
Environment emerging markets
• Cloud computing

Specific
Environment
Strategic Analysis

Today
Strategic Objectives
Currently
 Long term value creation by driving revenue,
operating income and cash flow
Shareholders Suppliers Customers

Definitive Dominant Dominant

To succeed
Customers Employees

Definitive Dominant
Key Current Strategies
 Ansoff’s Matrix
Currently: Market Development (PC)
Penetration (Enterprise IT)
Diversification (Enterprise IT)
 Porter’s Competitive Strategy
Currently: Cost Leadership & Differentiation
 Miles & Snow’s Adaptive Strategies
1st Curve 2nd Curve
PC Enterprise solution
Prospector Analyser
Analyser
Defender/Reactor
Strategic Implementation:
General Perspective

Strategic Drift & Flux

Strategic Implementation:
General Perspective

Second Curve Activity

Enterprise IT Solution - LATE

PC

BCG Matrix: Enterprise

•PC Business – Cash Cow

•Enterprise Solution – Question Mark sh

PC Ca
Leadership
“Two-in-a-box” Management & Cost Leadership
 Leader’s Market Acumen

 Corporate Culture & Leadership Style

 Executive’s Core Competence & Organisational Needs

Leadership Style of Michael Dell & Diversification Strategy

 Radical change in Dell’s structure to flat organisation

 Dell: ‘Efficiency’ to ‘Decentralisation and Delegation’

Less directive and more supportive in leadership style

Organisational Structure
 Decentralised since inception
 Bureaucratic & Autocratic: late 1990s – mid 2000s
 Hierarchical & Structurally Bulky: mid 2000s till now
 Implications

 Strategic implementation
Innovation
 Dell less innovative

 Strategic implementation
Diversification Innovative in the three types
 Evaluation of Strategy
 Strategic objective: Creating value for shareholders
 Key Strategies: Cost Leadership, Differentiation
Market Development, Penetration, Diversification
 Implementation: Leadership, Structure, Innovation

 Evaluation Criteria: (Viljoen & Dann, 2003)

Assessing Strategic Performance

(Viljoen & Dann, 2003)

Recommendations

 Less directive and more supportive in leadership –

Supporting style

 Reducing geographic division of middle

management

 Explicit strategic objectives to address and improve

employees’ motivation and skills
Conclusion

 Dell has lost its game in the global market.

 Dell shows no indication of significant change in

implementing its strategies.

 Dell stands to lose its competitive advantage in

the next 3-4 years, unless significant change is
brought about in leadership style, organisational
structure, and innovation.
Appendix
http://www.theofficialboard.com/org-chart/dell