Case Study: Michael DellThe Man Behind Dell PowerPoint Presentation (Change Management)

Case Study: Michael DellThe Man Behind Dell PowerPoint Presentation (Change Management)
Michael Dell began building and selling computers from his dorm room at age 19. He dropped out of the University of Texas when his sales hit $60 million and has never looked back. Dell is said to be the fifteenth richest man in America and the youngest CEO to make the Fortune 500. Intensely private and notoriously shy Dell is hailed as a corporate wonder-kid. He climbed to the top by exploiting tax loopholes outsourcing the competition and inventing a term called leveraged recapitalization.
First review the following case study:
Then in a Microsoft PowerPoint presentation address the following tasks:
Make sure you write in a clear concise and organized manner; demonstrate ethical scholarship through accurate representation and attribution of sources; and display accurate spelling grammar and punctuation.
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Leading Dell into the Future
Some analysts went to the extent of claiming that Michael was never an innovator but was only a businessman who was good at identifying innovative business models and executing them to perfection. Michael naturally looked at the situation from another point of view. He argued that his company had succeeded in producing cheap computers for buyers and earning huge returns for shareholders. Michael’s ‘direct model’ had been criticized from the very beginning. When Michael entered foreign markets with the same model critics said that it would not work in those markets because of certain cultural differences. Though Michael was warned that he would fail badly he believed that customers would set their own rules and that the direct model would work cross-culturally. Michael’s assessment of the situation was correct. By the end of 2001 DELL earned most of its revenues from global markets (Refer Table IV for DELL’s region-wise revenues for 2001-02).
Table IV Quarterly Revenues – Region-Wise
Quarterly revenue by region as percentages of consolidated net revenue
Q4 FY02
Q3 FY02
Q4 FY01
Americas
70
70
70
Europe/Middle East/Africa
21
20
21
Asia-Pacific/Japan
9
10
9
Source: www.dell.com
Michael’s supporters claimed his visionary leadership had not only maintained but also accelerated DELL’s growth in spite of the global IT industry slowdown in the early 2000s. When PC shipments were coming down all over the world DELL and IBM were the only vendors to record positive growth. DELL’s growth rate even exceeded that of IBM (Refer Table V to compare market shares and growth shares). According to a study conducted by Gartner leading IT research concern DELL was the market leader worldwide with a market share of 13.3% in 2001. Worldwide Compaq’s market share was only 11.1%. In the US DELL had a 24.5% market share of the PC market much more than Compaq’s 12.5%.
Table V Worldwide Server Unit Shipment Estimates for 2001
Company
2001
2000
Growth (%)
Shipments
Market Share (%)
Shipments
Market Share (%)
Compaq
1026025
23.3
1068436
24.7
-4
Dell
711614
16.1
568410
13.1
25.2
IBM
661547
15
657979
15.2
0.5
HP
428104
9.7
440512
10.2
-2.8
Sun
254053
5.8
289231
6.7
-12.2
Others
1326072
30.1
1302943
30.1
1.8
Total Market
4407416
100
4327511
100
1.8
Source: Gartner Dataquest (January 2002).
Michael said that he would stick to his three golden rules for business regardless of the downturn in the PC industry namely ‘disdain inventory’ ‘always listen to the customer’ and ‘never sell indirect.’ Will these principles continue to provide DELL with a competitive edge in the PC industry? Only time will tell.
Reference:
Dell Computers. (2002). Michael DellThe man behind Dell: Leading Dell into the future.IBS Center for Management Research. Retrieved from:http://www.icmrindia.org/free%20resources/casestudies/Leadership%20and%20Entrepreneurship%20freecasestudyp7.htm[icmrindia.org]