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Dell

 

             What is your evaluation of Michael Dell as CEO? How well has he performed the tasks of macro-organizational design as discussed this semester?.
             Michael Dell started his company with a purpose. His purpose was to sell directly to the end user by eliminating the intermediaries. Dell's company, PCs Ltd., was able to sell IBM clones for 40% less than the competition. This strategy resulted in instant growth for his company. .
             The fast growth of his company gave Dell his share of early development problems. He needed to increase his production capacity, add additional staff, and create a business model to follow. Dell needed to do this and keep his growing costs low. He renamed the company Dell, added a sales force, and offered common stock. The sales team was able to sign contracts with large customers. His sales rose to $388 million in 1990. .
             Dell wanted his direct sales to increase even faster than they had been so he decided to distribute his products at warehouse stores. He realized he had made a huge mistake after they saw how small the sales margins were. He withdrew from the retailers after only three years. Dell realized that direct sales were the only market he wanted to be in.
             The company then went into a downturn with quality issues. Dell had to write off $40 million in order to get redesigned computers into the marketplace. The company had stopped pursuing the consumer market. They reentered that sector of the marketplace with success from the Internet. Consumers liked what Dell is able to offer. A computer with what they want on it, not whatever comes with it. Dell created a sales and marketing group to capture the growth in this segment. They also designed a product line specifically for the consumer.
             It took Michael Dell time to develop his role in the company. He started out being very shy and only interested in hanging out with his engineers. Dell's turning point was when he hired the right CEO.


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