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The Power of Vision and
Business Concept
Starting with an idea,
Michael Dell created
Dell Computer Corporation with $1,000 startup capital in 1984 when he
was 20. Three years later, the market value of the company was $85 million.
The
private placement memorandum published in July 1987 listed and described
the three key strengths that gave the company a
competitive advantage:
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The ability to produce a line of high
performance products compatible with accepted IBM standards. (In
fact, many of Dell's products had features that were superior to IBM
systems and were frequently top-ranked by publications such as PC
Magazine and PC World.)
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The ability to maintain an efficient and flexible manufacturing
operation resulting in a streamlined asset base.
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Dell's direct relationship marketing concept: "With an average of
approximately 1,400 telephone calls received daily,
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Dell gets real-time input from its
customers regarding their product and service requirements, their
views on various products in the market, and their response to
Company
advertising.
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This input gives the Company a competitive advantage in
tailoring
its product offerings and communication programs to meet its
customer's needs.
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Direct relationship marketing eliminates the 25% to 45% dealer
mark-up, thereby enabling the Company to price its products
aggressively.
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The Company's
marketing strategy
allows it to sell its products through Company employees who are
trained specifically to sell Dell products.
Fast Decision Making
"Dell is the kind of company where everyone
rolls up sleeves and get personally involved in the details of our business
every day," says Michael Dell, the Founder of Dell Inc.. "This is, in fact,
how we got to be successful: As managers, it's not enough to sit around
theorizing and reviewing what those who report to us do. We frequently meet
with customers and attend working-level meetings about products,
procurement, and technology, to tap into real source of our company's
experience and brainpower.
"Why bother? It's a way to get close to our
people, for certain. But that's not all. Our day-to-day involvement in the
business helps us establish and allows us to maintain one of the Dell's
critical
competitive advantages:
speed.
In this case, "staying involved in the details" allows for
rapid decision making
because we know what's going on.
"For example, when a problem crops up, there's
no need for us to do more research or assign someone the job of figuring out
what the issues are. Because we often have all the information at our
fingertips, we can gather the right people in one room, make a decision, and
move forward – fast. The pace of business moves too quickly these days to
waste time noodling over a decision. And while we strive to always make the
right choice, I believe it's better to be the first at the risk of being
wrong than it is to be 100% perfect two years too late.
"You can't possibly make the quickest or best
decisions without data. Information is the key to any competitive advantage.
But data doesn't just drop by your office to pay you a visit. You've got to
go out and gather it.
"I do it by
roaming around."...
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