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How Dell Does It

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How Dell Does It

Using Speed and Innovation to Achieve Extraordinary Results

McGraw-Hill,

15 min read
10 take-aways
Text available

What's inside?

Dude! You`re getting Dell`s strategy: direct sales, no inventory, and customer service.

Editorial Rating

6

Recommendation

Using material from Direct from Dell, by Dell Computer founder Michael Dell, and from computer industry Web sites and trade publications, author Steven Holzner does a solid job of describing Dell’s rise over the past two decades and explaining what it is doing now to expand its market dominance. If you want all the details, though, you may feel frustrated. For example, Holzner says that Dell obsessively tracks the profit and loss of every business unit. However, he does not explain how. Which metrics does the company use, other than the often-cited ROIC, and how did it develop them? Similarly, Holzner notes that Dell analyzes markets and moves into them at just the right time. But how is it able to judge them so accurately? The book plateaus at the level of reportage, rather than rising to the level of inside analysis. However, if you are looking for a summary of Dell’s very successful business strategy, getAbstract recommends this overview.

Summary

Michael Dell Shakes Up the Computer Industry

The Dell computer company has been surprising the computer industry for more than 20 years. When Michael Dell started his company in 1984, it was twenty-fifth among companies manufacturing computers. By 1992, it was in the Fortune 500. By 1999, it had seized the largest share of the U.S. market for personal computers. By 2004, Michael Dell was one of the wealthiest people in America.

Dell is now "a $49 billion company with 57,000 employees worldwide." The following 10 principles account for its success.

  1. "Go Direct"

Making direct sales to customers was not always the company’s basic strategy. At first, Dell’s business involved customizing IBM personal computers and selling upgrade kits to IBM users who wanted to do it themselves. IBM was having trouble manufacturing its computers as fast as people wanted to buy them, and decided to move to an "open source" model for both its computers and its software. Dell and others then could figure out how the computers worked, and try to make and sell them more cheaply.

At the time, most people bought computers in retail stores. But then Dell made...

About the Author

Steven Holzner has published more than 90 books about the computer industry, and has been a contributing editor at PC Magazine.

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