Abstract
When Dell's CEO, Michael S. Dell and President, Kevin B. Rollins met in the fall of 2001, they were confident that the company was recovering from the global crash of personal computer (PC) sales. In fact, Dell is the master at selling PCs directly and bypassing middlemen and thus delivers PCs cheaper than any of its rivals. Some would argue that it's the model of efficiency, with a far-flung supply chain knitted so tightly that it's like an electrical wire that is humming 24/7. Yet, all this has been true for more than a decade. And although the entire computer industry has tried to replicate Dell's tactics, none could spot a blemish on the company's results. Today, Dell's stock is valued at a price-earnings ratio to the multiple of 40 that is loftier than IBM, Microsoft, Wal-Mart Stores, or General Electric.
As it turns out, the management of Michael Dell has elevated it far above its sell-direct business model.
The Chairman, the CEO, and other executives analyzed the actual position and determined Dell's strategic orientation based on a middle term outlook. In other words, they had to understand how technology must be used to sustain Dell's competitive advantage and to reinforce its leadership position inthe PC market up to 2006.
