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Dell Corporation Management Control System

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Dell Corporation Management Control System

  1. 1. Presented By: Ajesh Raj 1261 Shimsi Suresh Anirudh Sangi Management Control System
  2. 2. Introduction • Dell-World’s largest direct selling company • With 57,000 employees in 80 countries & customer’s in 170 countries • Headquartered in Austin, Texas • Founded by Michael Dell in 1984 at the age 20 with $1000 • Youngest CEO by 1991 • By 2005 Dell valued more than $100 billion • Dell became top retailer of personal computers • Competitor’s used “build-to-stock” technique • Dell changed the tradition by eliminating retailers • Dell shipped product directly to customers
  3. 3. Cont’d… • Accepted customized order’s from customer’s for hardware & software • Declining personal computer market pushed Dell into consumer electronics • Dell set up kiosks in malls and planned their marketing campaigns • In 2005 Dell was ranked as America’s most admired company by Fortune • Growth rate 19% • In August 1993, Dell engaged Bain & Company, Inc., to judge business-unit performance
  4. 4. Dell’s Strategy • Dell’s Direct Business Model • Customized products • Understanding need of customer & provide effective solution • Switching on to other consumer durables • Evaluation of market place, price category and supply partnerships • Setting up Dell Stores in Mall
  5. 5. Building Competitive Advantage • Customer knowledge advantage • Direct Sales Model • Efficient Supply Chain/Distribution Model • JIT Technique which operate for only 6 days of inventory • Replacing inventory with information • Technology Advantage • Diversification into other consumer durable products • Global Manufacturing plants-Cheap Labour
  6. 6. Dell’s Control System • Performance Measures: Dell’s scorecard included both financial measures (such as ROIC, component purchasing costs, selling and administration costs) and non-financial measures (component inventory stock outs, finished goods inventory, A/R day and A/P days). • Expedited the assembly process: Dell recognized early the need for speed, or velocity, quickening the pace at pace at every step of business.
  7. 7. Cont’d.. • Localized decision making system: Dell used its structure as a flat organization as a competitive advantage and localized its decision-making. If an issue did not require a higher up’s attention, then decision would be made without involving him. This would not have been possible in companies bogged down by layers of bureaucracy. • Business unit Performance: in 1993, Dell developed a set of metrics to judge business-unit performance.

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