First mistake, though minor one, if not corrected could have been major, No Delegation. Corrected and a might have been major catastrophe averted. Page 18. Second mistake, first major one, Excess inventory. In 1 989, Buying large no. Of KBPS memory chips , and while they were in the inventory new memory chips have been invented with 1 MBA. , and these became obsolete. Huge losses occurred. Organization sustained barely, because it is large enough, and loss even though major , not major enough to wipe out company.
Page 37 Second major mistake Novo 1 989 Product Olympic Lessons learnt Stick to the original 3 golden principles 1)Disdain Inventory 2)Listen to what Customer wants and build it( don’t imagine what he wants ND waste time and money) 3)Never sell indirect page 59 Mistake Small, but Corrected, after some time, with no loss, no profit Page b. How did Michael Dell’s vision, personal traits and leadership style shape the way in which Dell Corporation operates today? Dell’s main philosophy, or trait, as one normally calls it.
If you believe it, you execute it. If it fails, at least would have learned why it failed, and one might correct it next time. His leadership style, is don’t announce that you are a leader, let them decide it for themselves. Everybody should learn, and from everybody, so learn, but learn what might be useful to you. The best source is your customers. Next is your employees, next is your competitors, next is technology, predicting the trend and path, and knowing which opportunity to hold and grow with.
And then the market, which you can gain from listening to customers who are first source in list. Don’t speak, don’t talk, listen, make a conversation, And give your primary asset, your customer , full satisfaction, the product ,the service ,the feeling that they are not customer for one transaction, but for life. Then your employees same thing. Then your suppliers same thing , share information with everybody, tell them what you want to do, and how can they be part of it.
Make them feel like owners, then that feeling will make them do the right thing, for them , for the company , and the right thing for customers. 2. A. State the relative merits and demerits of Dell’s direct model. It is very difficult to separate the impacts of invest- mentis IT From other factors such as changes in business processes, effective use of human resources, and general acceptance of the direct model by users Still, a close ex- nomination of
Dell’s operations makes it clear that IT is fundamental to the functioning Of the direct model, and that IT has been a key element in the continued rearmament and extension of that model. It simply would be imposes- able to coordinate such a complex set of business processes at such a high speed without using IT extensively People who are not familiar with the details of the direct model some- times think it refers only to “direct sales to individual end users or consumers” instead of this more complex and nuanced reality.
In other words, the direct notion refers more to the fact that Dell Largely though Not completely) bypasses the traditional distribution channels (disturb- tutor, value-added reseller, systems integrator, retailer) rather than that it goes directly to the individual end use “the benefit of exiting retail was not just the change in our financial condition, the real value was that forced all of our people to focus 100% on the direct model, the single-mindedness was a powerful unifying force”, Michael Dell, Direct from Dell Dell brings direct model to bear in noteworthiness’s Protecting 3324, 3348 and 551 2 switches Advantages Reseller Customized the PC to customer requirements, installed components ND provided additional service and support Direct Sales From the PC manufacturer to the corporate customer or consumer Eliminate costs and risks of carrying large finished good inventories ;High velocity ;Low-cost distribution ;Direct customer relationship ;Build-to-order ;Just-in-time manufacturing ;products and Services aimed at specific market segments The Dell case illustrates how one business model may have inherent advantages under particular market condo- actions, but it also shows the importance of execution in exploiting those advantages Dell partners with Arthur Andersen and Gene 3 in the U. S. To provide consulting services to companies that seek to emulate Dell’s success with the direct model and Internet- based IT. “Dell doesn’t want to pass on the secrets of the direct model to subcontractors. Dell is bringing in more of the box with more stuff in it from suppliers, but keeps control of the complex and proprietary parts of the process. In summary, the organization of Dell’s production network is changing.
Whereas the network was previously located mainly in Asia, today it is increasingly being rationalized in order to better target markets with the erect model and to respond to rapid changes in markets. These regional production networks involve a combination of Asian suppliers and U. S. Contract manufacturers. B. Select any industry of your choice in the Indian economy and explain how a direct model can improve the efficiency and profitability of a firm operating in that particular industry. If one has to pick an industry, even though small scale, not exactly an industry, more in the sense of a business in its very less form, we can pick vegetables. Take Reliance fresh.
Make it online, and order for 7 days of needed vegetables , may be three or our days in advance. The time period can vary from 1 day to days. Everybody needs it. Not everybody prefers to spend time on buying it, roaming around, and come back, Eliminate the time, at least their personal time of roaming around for fresh and good vegetables. Give them a website, give them menu of seasonal available vegetables, fruits, or all season ones. If needed cross check through other channels, for correctness of order. Deliver to home, good quality, fresh vegetables, fruit or even meat and even flowers. Actually, if it can be done for normal vegetable vendors, by some Non
Profitable Organization, with the help of college students for the website, and may be some educated senior citizens, or non employed youth for cross verification, and may be some auto’s for transportation, and to reduce cost to the customer, the nearest vegetable supplier, it would revolutionize the life of everybody associated with it. The only problem is integration and to some extent the suppliers desire to sell, even not good vegetables, and may be the some customers desire to reduce the prices further. 3. What is the segmentation strategy adopted by Dell in terms of product/ customer perspective? Summarize the advantages and disadvantages of this strategy in the context of Dell’s customer-focused philosophy.
Market segmentation is the process of identifying distinct groups and or sub groups of customers in the market, who have distinct needs, characteristics, preferences and/or behaviors, and require separate product and service offerings and corresponding marketing mixes. “Market segmentation can be defined as the process of dividing a market into distinct subsets of consumers with common needs or characteristics and selecting one or more segments to target with a distinct marketing mix”. Now businesses in developed countries and many firms in developing economies aim to satisfy customer needs and also build lasting customer relationships. Customer relationship marketing focuses not on customer acquisition but more on what happens after a customer is acquired.
As the potential grows for greater company value and customer value increases to higher levels, there is scope to extend market segmentation to individual customer Dell has been very clear with its target market an product right from the beginning. The initial launch of the company was personal computers, which ere to be used for general purposes. Once the market for the computers was established and the company was able to create a strong customer base the expansion was done, but with products that were for the low end household purpose or small business purpose like televisions, audio players, printers. The company has constantly focused on the low end markets and have worked to expand in the same area.
The direct sales model adopted by the company also played a critical role in creating a direct relationship with their customers and working closely with them to understand their changing deeds and proceed to work in order to satisfy their customers. In order to adopt this model of sales the company ever focused on distributors and superstore retailing options for their products because of which they had to ensure continuously that they are working equally hard to keep their customers in strong contact with them. The launch of their own website is such an example, which created a strong presence of the company in the market and the company was able to reach their customers at their doors through the internet.
Being at edge with the competitors IS again a challenge ere and in absence of competitors a strong leadership team is needed to maintain the growth of the company else there is a chance that the monopoly stagnates the company at a stage and makes it outdated with business trends. Advantages: With a segmented target market the focus of the company has been strongly concentrated to work for the target customers and improvise products to meet their demands. For egg. Selling PC’s with preloaded Linux software is one of the improvisation mad the company on their PC’s in order o create better customer experience and thus increase the loyal customer base in the market.
Disadvantages: It is very important to stay up to date with the changing business trends and customers need in order to ensure that the focus is never reduced on the products as being completely dedicated to one segment of the market if the focus loses there is a strong chance of big time failure for the company. 4. In 1989, Dell Computers had the dubious distinction Of being the company with the inventory problem. But by 2003 they moved to first place in inventory management. Critically analyze the supplier management techniques used in Dell, with special emphasis on inventory management. Normally the suppliers allow demand and the supply policy. That is they get a bulk order, the supply a bulk shipment.
But Dell changed it, they said we will ask less, but more frequently, if you supply, we will order more of less shipments. So as per Dell’s words you supply we demand. This removed the inventory problem. Or rather idle inventory problem. So, as Dell’s first crisis was with inventory, and inventory becoming obsolete, they reduced the inventory and if standards change over night, so does the orders (Demand from Dell, for the new enhanced models). And Dell kept the suppliers in loop, meaning sharing their Lana and products, so as with customers Dell built relationship with suppliers also. 5. How can modern organizations thrive on change in today’s environment? Elucidate your response with suitable examples from the world of business.
Today’s organizations have to deal with dynamic and uncertain environments. In order to be successful, organizations must be strategically aware. They must understand how changes in their competitive environment are unfolding. They should actively look for opportunities to exploit their strategic abilities, adapt and seek improvements in every area of the business, building n awareness and understanding of current strategies and successes. Organizations must be able to act quickly in response to opportunities and barriers. Today’s business environment is becoming increasingly dynamic, complex and socially aware. Organizations have to become more agile and responsive to survive and succeed.
For example, if we treat organizations as adaptive organisms that thrive on change, rather than as machines that need reengineering, an innovative, social aware culture becomes a natural habitat rather than a constant uphill battle Strong adaptive leaders who apply these eye principals to their business will allow their enterprises to develop and thrive in a complex, modern world, but at the same time being aware of their social responsibilities. The retail online business is a very good example in this context. This industry has found its primary customer base among the online users who are internet aware and internet educated. Though it is understandable that the customer base has been targeted post the market segmentation, but this should not be seen as a constraint to attract customers who are not available on the internet.