Direct from Dell : The beauty and the beast

Kevin Rollins retired as chief executive last month leaving behind a shaken Dell. Dell have suffered losses, customer satisfaction is at an all time low, employees are frustrated and Dell seems to hardly know what to do. And as the founder Michael Dell returns as CEO to steer the company out of trouble, it remains the biggest challenge in the computer industry. But many wonder whether it is too late and the damage is beyond repair. Dell expanded too fast, which contradicted it's basic strategy. The Strategy was discovered by a college boy selling assembled PCs to interested customers from his hostel room. Mr Dell was severely criticized by his parents for the foolishness of competing with IBM, and his critiques severely mocked his idea of not considering retail as an option for his business. Dell proved all of them wrong. The essence and power of Dell is its inventory management which is greatly supported by its direct marketing concept and, good supplier commitment. It works like this: The customers orders, and he gets a customized PC with the latest technology, at a surprisingly low price and also with a responsive customer service. Inventory management has been the key to success to other companies also, like the Wal-Mart. It allows the company to have only required amount of stock in their inventory to complete submitted orders, thus cutting down on miscalculations of buying too much or too less stock. Dell also required that they have good suppliers so that they got the stock on time and also of expected quality. The trick of this trade is not to expand too fast and have much more customers to serve, with uncommitted suppliers. The beauty of the strategy is that it is hard to copy and there is always a strong committed customer base, but the beast of the strategy is that you cannot afford to expand as fast as in retail; if you do, it will result in degraded customer and product quality. Hope Mr Dell can bring back the lost balance of a uniquely positioned company.