The University of Newcastle GSBS 6060 Strategic Management

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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 Environment

• Demand shifting towards emerging markets

• Cloud computing

Specific Environment

Strategic Analysis

Today

Strategic Objectives

Currently

Long term value creation by driving revenue, operating income and cash flow

To succeed

Shareholders Suppliers Customers

Definitive Dominant Dominant

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 CurvePC

2nd CurveEnterprise solution

Prospector Analyser

Analyser

Defender/Reactor

Strategic Implementation: General Perspective

Strategic Drift & Flux

Strategic Implementation: General Perspective

Enterprise IT Solution - LATEPC

Enterprise

PC Cash

BCG Matrix:

•PC Business – Cash Cow

•Enterprise Solution – Question Mark

Second Curve Activity

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