Strategic Assessment
DELL, Inc.

1 – Describe and analyze main strategic maneuvers in the last 5 years. Causes and consequences.
Michael Dell created DELL in 1984, based on a revolutionary, but simple concept, which was to sell custom-built computers directly to customers. This direct model, eliminating the intermediary between manufacturer and client, would allow him to be closer to customers, to their needs and concerns, increasing efficiency and effectiveness of the response to satisfy these needs. This vertical model, combining direct customer contact, new distribution channel and innovative product assistance/after-sale service allowed DELL to offer commercial and individual clients one of the most sophisticated and satisfying product in the personal computer industry.
After a few years of developing the activity and growing capital, Dell began in the late 80s to start strategic planning in order to expand market shares and profitability, through cost reduction (direct model and “just-in-time” model with custom-built computers and low inventory), innovative technologies, new markets (strong global expansion late 80s/early 90s, cross-cultural viability for business model), loyal customers (massive use of Internet, e-commerce & customer support) and finally a measured diversification (early 2000’s, with extension of firm’s product portfolio). Combining a change at the top of the company in 2004 and several bad performances during this period, Dell lost its leader position, conceding it to HP. With the comeback of founder Michael Dell as CEO in 2006, major changes in strategy have been established in order to win back confidence of shareholders and investors, and intend to recover leading position in the computer and peripheral industry. We are now going to analyze the company’s main strategic manoeuvres in the last five years and their causes/consequences in order to better understand how come the firm is one of today’s leaders in the computer and