Krit Tiraarporn 528-28181-26 Closing Case 7: Strategy Implementation at Dell Computer 1. Why has Dell moved to different kinds of organizational structures over time? Answer: Dell needs to move to different kinds of organizational structures over time in order to change and adjust the business itself to fit with a change in environment. In 1984, Dell did the business alone but the demand was coming a lot. To serve the huge demand, Dell needed to hire more employees and assign a tons of work to each person.
When the business is bigger and bigger, Dell alone cannot do every thing in the company, so the functional structure can help Dell to work in different areas such as marketing or manufacturing. Moreover, the market is more fragmented and the company has a wide range of product, so Dell needs to create more many sub-divisions in order to better respond and serve the specific customer need. It would be seen that when the business moves to a direction to make competitive advantage, the organizational structures needs to be changed to support for achieving the company’s success. 2. Has Dell’s performance been improved?
Answer: Yes, Dell’s performance has been improved from a change in organizational structure. Firstly, creating the functional structure and giving authority to manager can help Dell to develop a lean organizational culture to squeeze the cost. Secondly, fragmenting the sub-division for specific customers could allow Dell to better respond the customer need; consequently, it could increase the customer satisfaction. Moreover, grouping the division as the customer group can help employees to obtain more in-dept knowledge and specialize in their tasks to serve the specific customers.
Of course, this kind of organization can increase the profitability of the company. Besides, Dell’s performance is improved substantially from making use of the corporate intranet to standardize activities across divisions and integrate its activities to reduce cost. In summary, a change in organizational structure can improve Dell performance over time to create company competencies in order to increase more customer satisfaction and achieve company profitability. 3. Search the Internet to find out how Dell has been trying to increase its performance and how its competitors such as Apple and HP have also been working to improve theirs.
Answer: In 2008, Dell attempts to reduce the cost by moving the manufacturing to China. In 2009, about 70 percent of Dell’s total product volume has been redesigned and optimized to reduce costs to increase company’s competitiveness. Meanwhile, expanding its business to BRIC countries at the same year can increase the revenue of Dell’s business. Another side, HP and Apple also improve their performance to compete with Dell. HP reduces the size of the company by laying off about 15,000 people worldwide and minimize management layer to reduce cost.
HP also expands its assemble to in many countries around the world such as China to keep the cost low. While Dell and HP tries to compete with cost, Apple makes a different way. Apple tries to create innovative product and charge with high price. Ipod is a good example to show Apple’s success in 2001 from innovativeness. Instead of offering the standard product, Apple develops unique software and hardware to compete Dell and HP with higher superior product. Creating differentiation can improve Apple business to be much more profitable especially that Apple now becomes accepted as the number one of technology.