Dell is a multinational organization (computer technology) based in the United States which deals with developing, selling, and repairing computers and other related services and products. The organization was named after Michael Dell, its founder, and it is among the biggest technological corporations globally. The company employs over 145,000 individuals in the United States. Dell was ranked number fifty-one in the Fortune 500 listing until the year 2014. Dell Corporation was ranked third among the biggest PC vendors in the world after Lenovo and HP during the year 2015. Also, Dell Corporation is the world’s largest PC monitor shippers globally, and it ranks sixth among the largest companies (by total revenue) located in Texas; this is as per the Fortune magazine listing. Dell Corporation was a publicly-traded organization and an S&P 500 and NASDAQ-100 component until its privatization in a leveraged buyout, which closed on 30th October 2013. During the year 2015, the company acquired the EMC Corporation (Lakshimi, 2018). The paper provides a description of Dell’s management control strategy, the basis of the company’s competitive advantage, and the impact of Dell’s control systems on its capacity to execute its strategy.
Dell’s Management Control Strategy
According to Lakshimi (2018), the primary management control strategies used by Dell Corporation is the business, functional, and corporate level strategies. Lakshimi (2018) defines a business level strategy as the coordinated and integrated set of actions used by a company to attain a competitive advantage by making use of fundamental competencies in various product markets. Dell Corporation’s success strategy is based on its unique cost proposition, delivery, and customization. The company attempts to offer quality customer experience by providing superior consumer values, for instance, differentiated services and products which are typically easy to use and buy, high-quality support and service, customized systems, and high-quality pertinent technologies. Dell integrates its cost leadership techniques with features of the differentiated product and related services to generate value for its consumers; this, therefore, means that Dell employs the use of differentiation/ integrated cost leadership strategy as its business-level strategy. To enhance the effectiveness of the approach mentioned above, Dell utilizes three primary initiatives: TQM systems (total quality management), manufacturing systems, and information networks.
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Furthermore, the company employs the use of a customized assembly procedure based on its flexible manufacturing technique to fill consumer orders for its manufacturing framework. Samson, Donnet, and Daft (2017a) further indicate that the company has various consumer-related strategies, for instance, direct relationships with consumers. According to Samson, Donnet, and Daft (2018b), the organization employs the use of direct selling. Here consumers are able to purchase services and systems form the organization via phone at its various retail stores and via its website. Consumers are provided with a platform that allows them to review, configure, and explore the various price systems within its product line, make orders online, and monitor or track orders from production and all through the shipping process. Consumers can also provide their feedback for future and current Dell services and products via an interactive section of their website (Dell Idea Storm) (Lakshmi, 2018).
The Basis on which Dell Corporation Builds its Competitive Advantage
Dell Corporation maintains a competitive advantage over its computers in the technology industry due to the implementation of various strategies. First, the company has implemented a just-in-time system of inventory; this system operates or functions on only six inventory days (Lakshmi, 2018). According to Lakshmi (2018), the company is able to attain higher margins of profit and significant increases in profits as a result of its inventory system. The inventory system employed by the company plays a crucial role in minimizing the company’s production expenses. Secondly, the company’s direct model strategy plays an essential role in facilitating the company’s selected inventory system (JIT); this is because it allows consumers to make their orders directly from the company via their website. The above approach enhances the significant reductions in the costs associated with the implementation of various distribution channels; it further enhances the development of an in-depth relationship with consumers.
Thirdly, the company has adopted e-commerce as its primary marketing strategy; this approach plays a crucial role in enhancing the company’s competitive advantage. According to Lakshmi (2018), the company has a consumer-friendly website that allows consumers to place their orders with much ease. Consumers can also provide their feedback for future and current Dell services and products via an interactive section of their website. Fourthly, the company usually initiates approaches that seek to enhance the development of strategic alliances with other organizations; this allows these companies to sell their products on Dell Corporation’s distribution channel – direct selling. Lastly, the organization has a superior supply chain management system, and according to Samson, Donnet, and Daft (2017a), this plays a crucial role in enhancing the attainment of competitive advantage in the market place by the company.
How Dell’s Control Systems help execute the Firm’s Strategy
Management control systems relate to the informal and formal structures employed by a business to enhance its capacity to compare the goals and strategies of the company against the outcomes (actual); it is a measure of the effective functioning of the business and how well it meets its goals. Dell’s control systems play a crucial role in enhancing its capacity to execute its strategy in various ways. First, it facilitates the documentation of operational objectives. The company is typically able to delineate its expectations in terms of long and short-term goals; this could be directly associated with its social objectives and financial performance (Samson, Donnet, & Daft, 2017b). Dell's control systems play a crucial role in enhancing the proper documentation of operational policies and strategies; it facilitates the appropriate documentation and implementation of various organizational policies and the essential approaches that facilitate the company's capacity to attain its set strategic goals. Thirdly, the company's control systems facilitate the proper evaluation and assessment of the performance of the various organizational processes. Lastly, the control systems employed by Dell Corporation enhances the company's capacity to compare its performance with regards to the implemented strategies, set goals, outcomes, and the implemented policies (Samson, Donnet & Daft (2017b).
Conclusion
Dell is a multinational organization (computer technology) based in the United States which deals with developing, selling, and repairing computers and other related services and products. The organization was named after Michael Dell, its founder, and it is among the biggest technological corporations globally. The primary management control strategies used by Dell Corporation is the business, functional, and corporate level strategies. Dell Corporation's control strategy is a critical measure that enhances the evaluation of the effective functioning of the business and how well it meets its goals.
References
Lakshmi, S. (2018). Make to Order Strategy at Dell Corporation: A Case Study. Aweshkar Research Journal , 25(2), 21–27.
Samson, D., Donnet, T., & Daft, R. L. (2017a). Fundamentals of management . Southbank, Vic: Cengage.
Samson, D., Donnet, T., & Daft, R. L. (2017b). Management . Southbank. Cengage.
