Final Report

Subject: Business Presentation

Submitting Date: Friday, January 1, 2010

Topic

DELL COMPUTER
CORPORATION
Introduction:

This all case is about Dell Corporation. Dell is basically founded by

Michael Dell in 1984.This organization is having a well disciplined
direct communication system for its customers as well as employees in
organization. Dell company is producing both customer based PC’s and
also organizational based servers. Dell offers its products & services to
a customer based different segments including large & global
businesses, education sector, health care sector, Govt., small business
& consumers. Dell is capturing 30% of market in US market and
14.3% of global PC market. If we look sales at its two segments, 27%
of Dell’s sales came from enterprise products and 73% from desktops
& notebooks. Their basic purpose is to cut off middleman and selling to
customers directly for its lower cost. This organization is having well
image in US & Global market. Its structure is very complex & fluid
rather than flat. Their sale growths were high till 2000 but then global
crisis came and its sales revenue declined from 21.3 % to 17.6%. It
started reducing its employees nearly 8% in US & 4% of its total
workforce.
Dell is having “Loose Matrix” corporate communication team based on
customers, products & geography. Its structure is complex & fluid.
Everyone in organization can talk to higher authority through Direct
Mails system. So it’s easiest way of communication. Dell has unique
relationship with GCI & other public-relation firms. When GCI won
Dell’s account, then both Dell & GCI evaluated relationships, budget
targets & results achieved. So Dell’s agency budget was being
allocated in line with business needs. Dell looked internet as a source
of staying connected with these agencies by using its own extranet for
file sharing and online dialogue abut specific issues.
Team communication is very strong in Dell. Because every once can
communicate through mails. In 2001, due to global crisis, Dell’s
corporate communication team was reduced to 80. In this team, 50
were based in US and remaining in Dell’s regional offices abroad.
Talking about its corporate strategy, company strategy came from
senior management rather than formal strategy process. Michael Dell
found its strategy very important. Dell would find in late 2002 that its
commitment to communication played a direct role in allowing
company to implement strategy, even during crisis situation. And of
course, Dell prove itself a successful company from both customer &
financial perspectives in market during this crisis.
Michele Moore, Allen’s predecessor, started formal & structured
approach for team communication including standing meetings &
conference calls. Allen was impressed by Moore work.
Elizabeth Allen, vice president for corporate communication at Dell,
is providing its services at Dell. She has received mails and is
preparing its meeting for senior communication director around the
globe. She focused on one mail and stated the criticism on Dell’s lack
of spending on Research & Development. As organization is
following low-cost strategy, so it’s spending low budget on research &
development. She received bad comment from COO of Sony to whom
Dell had a strategic relationship. So Allen is thinking about how to
handle situation and what should Dell do to remedy the situation.
Question No.1 (a):
“Give how the case describes Dell’s overall business
structure?”

Dell’s overall organizational structure is very complex and fluid. But its
corporate communication system is “loose matrix”. They are using
direct system in both selling & communication. They are adopting
lower-cost strategy to cut off middleman. Dell has also agency
relationships with different public-relation firms. It corporate
communication strategy is very strong, everyone can communicate
with higher authority because of Direct Mails System. Dell is
expanding its business all over the world and it was supposed to be the
world’s 2nd largest company for enterprise products such as severs
etc.

Michael Dell: CEO OF Dell Company

Tom Green: Corporate Sector
Tom is controlling four corporate functions at Dell
HR Legal Administration Corporate
Communication

Elizabeth Allen: vice president of corporate communication at

Dell
She is having control on corporate communication team of
approximately 80 professionals. There are five regional directors under
Elizabeth. These directors control following departments
Employee Corporate Chairman’s Specialized group for
Communicati public communicati Dell’s Enterprise
on relation on Service Group

Question No.1 (b):

“What are the strengths and weaknesses structurally of its
corporate communication function?”
There are some strengths & weaknesses in its corporate
communication system. These are given below
Strengths:

• Direct Communication
• E-mail Based Culture
• “Loose Matrix” Corporate communication structure
• Relevant Communication structure in each specific area
• Agency Relationships through internet
• Direct Selling because of communication
• Good Image in market
Weaknesses:
• Corporate Strategy only by senior management
 • Low Budget of 10% on Research & Development sector as
compared to its competitors
• Lack of R & D Programs with other companies
• Reducing corporate communication team from 120 to 80
• Low Standard of enterprise products in market

Question No.2:
“What challenges do you foresee for Elizabeth Allen and her
team going forward and what advice would you give her?”

Elizabeth Allen is the vice president for corporate communication at

Dell. There could be certain challenges which she and her team have
to face in future. The most important point is the Dell’s lack of
spending on research and development. As Dell was also being
criticized in the leading Japanese business weekly about their research
and development, they certainly need to think about it and take some
action.
The operating cost of Dell including research and development totaled
only 10 percent of revenue in 2001 which is quite less as compared to
the other companies. In order to maintain its position, Dell should
increase its spending on research and development. Moreover, in
enterprise computing, Dell did not spend much on research, but their
rivals did. Instead of spending directly on research and development,
Dell formed cooperative R&D programs with other companies or
licensed technology needed to develop or enhance its own products.
The philosophy of Dell focused on five major areas “customers, the Dell
team, direct relationships, global citizenship and winning”. Now the
challenge for Dell is that, it has to maintain a balance between all the
five areas. It has to satisfy the customer’s needs and wants, and
maintain a good communication system within the organization which
it has been doing in the past as well. Another challenge for Dell is that
it has to maintain its strategy like it was doing in the past, by
communicating with the suppliers, customers, management and all
other important pillars of their company.

Question No.3:
“What role could corporate communication play at Dell to help
the company advance its strategic goals?”

Dell is having E-mail base communication culture. This environment

made relatively easy for employees to communicate with manager and
senior management and also communication to customers. E-mail
based corporate communication system is an efficient source for
dispersed people of the team across the zones.
Senior management of the Dell Corporation began to use formal and
structured approach to communication among the team including
standing meetings and conference calls. Dell has been using these
communication tools with other agency relationships.
 For instance Dell is using internet as mean of staying connected with
other agencies and also using its own extranet for file sharing and
online dialogue about specific issues.
Corporate strategy typically came from senior management rather
than formal strategy process. Communication played a direct role in
allowing the company to implement strategy. Strategy viewed as
essential part of the process to be involved with execution is where
you can really make a difference.

Dell work according to its strategy plans even in crisis situation for
handling this situation in better way; they set precedent of being
constant communication with its counterparts and suppliers in
Malaysia, Taiwan, and china also along with its US based transport
partners. Dell was able to successfully develop and implement a
contingency plan that enabled the company to upload.

Dell maintain and reinforce its overall strategy and business

objectives , and emerge from the crisis from the both the customer
perspective and the financial perspective in the end Dell did work well
which were impossible for them and they are surviving in the business
from long time by using effective communication and strategies.

Conclusion:
In the last, I would like to conclude that Dell is having good image in
the market that’s why it is retained in the market. Its corporate
communication was effective and appropriate strategies have been
applied to satisfy customer and staff by using direct communication
techniques.
Although there has been crisis but Dell is able to handle situations
because of its proper communication techniques. It needs further
advancement by spending more budgets on Research & Development
sector. It’s also retains its lower cost commodities according to its
goals and strategies.