Executive summary

Dell, Inc. is a company based in Round Rock, Texas, USA, producers and markets
computer hardware DELL was in a momentous change in the strategies used his company.
This change occurs is affected by the magnitude of change in electronic customer situation at
that time. CDELL formerly targeting the market for corporate customers (Business to
Business) market but has changed their direction to be direct sales to customers (Business to
Customer). In the DELL strategy to position the company use the strategy of cost leadership
and customer base marketing strategy.

Implementation of cost leadership in DELL can be seen from some of the companys
business aspect. By providing low cost but high quality products, DELL has a great chance to
survive in global market competition at the moment and also weaken and destroy profit
margins that sustain their competitors in the market.

The use of the customer base of marketing strategies seen from the way in internet
sales of products DELL, DELL customers can order products according to their need and
specifications. the condition is expected to become a big attraction to electronic customers at
this era.

Analysis of case studies on strategic changes which occurred in the company DELL
will be discussed clearly in this report. Stages in the formation of strategies and also aspects
that influence will be discussed in conjunction with the analysis of the case DELL.

Table of Contents
1
Executive summary..................................................................................................... 1
1. Strategic Thinking................................................................................................... 3
1.1 Process of Strategy Planning..................................................................................3
a. Goal Setting.................................................................................................. 4
b. Analysis Stage................................................................................................. 4
c. Strategic formulation......................................................................................... 5
d. Strategic Implementation.................................................................................... 5
e. Strategic Evaluation........................................................................................... 6
2. Dell Strategic Changing............................................................................................ 7
3. DELL Strategic Level Analysis...................................................................................7
a. Corporate Strategy................................................................................................ 8
b. Business Strategy.................................................................................................. 8
c. Functional Strategy............................................................................................... 9
4. Dell Strategic Position............................................................................................. 10
4.1 Environmental.................................................................................................. 10
Politics............................................................................................................. 10
Economic......................................................................................................... 10
Social.............................................................................................................. 11
Technology....................................................................................................... 11
4.2 Strategies Capabilities........................................................................................ 11
Strength........................................................................................................... 11
Weakness.......................................................................................................... 12
4.3 Expectation..................................................................................................... 13
5. DELL Strategic Choice............................................................................................ 13
Business-level Strategy............................................................................................ 14
International Strategy.............................................................................................. 14
Innovation............................................................................................................ 14
5.1 Main Issues of DELL Strategy Implementation............................................................14
References........................................................................................................... 16

1. Strategic Thinking

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 Understanding the stages of thinking strategies, companies also need to understand
about the strategy planning. Strategic planning is the process undertaken for an organization
to determine the strategy or direction, and making decisions to allocate resources (including
capital and human resources) to achieve this strategy. The various techniques of business
analysis can be used in this process, including SWOT (Strengths, Weaknesses, Opportunities,
Threats), PEST (Political, Economic, Social, Technological), or STEER (Socio-cultural,
Technological, Economic, Ecological, Regulatory).

Strategic Planning (Strategic Planning) is a management tool used to manage the

current state to get the projection condition in the future, so the strategic planning is a guide
that can be used by an organization from their current state to their work towards 5 to 10
years into the future ( Kerzner, 2001) To achieve a strategy that has been set by the
organization in order to create a competitive advantage, choosing their company's leaders,
operations managers, must work within a system that is in the process of strategic planning
(Brown, 2005). The ability to think, must be used properly, so that can become a weapon that
excels in a planning strategy (Skinner, 1969). Strategic planning is explicitly related to the
management of change, this has been the result of research from the experts (e.g., Ansoff,
1965; Anthony, 1965; Lorange, 1980; Steiner, 1979). Lorange (1980), wrote that strategic
planning is an activity that includes a series of processes of innovation and transformation the
company, so that if strategic planning does not support innovation and change, then it can
consider as failure.

1.1 Process of Strategy Planning

In the process of strategic planning is divided into six stages, namely goal setting,
analysis, strategy formulation, strategy implementation and final evaluation strategies.

Figure 1 : Diagram of strategic planning

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a. Goal Setting
Lewis Carroll in "Alice in Wonderland" wrote if you do not know where you are
going, use all the possible way u can chose". It's very simple but not useful in practical
business sense. Strategists who just said that 'our goal is to make as much profit as possible'
just same as declare a blank statement that there is no clarity. To be useful, a goal must have a
level of formality and fact to support the goal.

In preparation for setting goals an organization should consider several aspects of

criteria such as:

Groups or staff who will be involved

What and how to conduct planning

The value and benefit of the planning for the organization

Fees will be used

The procedures to be used

Distribution of process steps and the division of responsibilities.

Determination of the goals and objectives of an organization and the identification of

their business goals and objectives are usually determined on a common mission and vision
statements. It helps organizations to understand what is needed to achieve the suitable
strategies in order to achieve their priorities.

b. Analysis Stage
The first step is to determine the current state of the business to have a complete
understanding of the internal and external audit and internal and external environment of the
organization. Analyse the overall market, the competitive environment within the industry
and the organization's core competencies. In short, companies should undertake this stage
analysts to examine all the factors that affect the organization.

In analysing the internal and external circumstances can the company can use
SWOT analysis to discuss the strengths and weaknesses that exist in the company to compare
it with their opportunities and threat that exist in their external environment. While, PEST

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analysis (political, economic, social and technological) can be used in analysing the target
market environment. Analysis towards a competitive environment should be a priority to look
at the state of the market and competition situation that occurs as the influence of
competitors, suppliers, buyers and other things that there are in the market to the company.

c. Strategic formulation
After analysing the company's overall image and position of the organization,
strategic planner will be defining and formulating strategies on achievement that may be
achieved by their organization in the future. They developed a vision (the concept of the
future) and mission statement (which can be about products, customers, markets, etc.) By
focusing on the main priorities of the organization. At this stage, they also highlighted the
objectives of the organization in the future and provide the right direction for the organization
to express the essence of the values expected, the future market in front of the goal and the
expected target.

In the formulation of strategies, the company may consider a few things like:

Set up a program to train members of the team if they do not have the necessary
skills to do the job

Examine organizational resources

Check the status or progress of the project

The relationship between team members

changing in institutional

changes in the new government policy that may affect the right plan is made.

d. Strategic Implementation
The next stage is to implement the overall planning and define accountability as
decisive bearers of responsibility to the right person for a specific operational process. In this
phase, leaders communicate about allocating time, money and human resources to achieve
the desired goal, so that the stages of implementation that have been made in accordance with
the plan that was created earlier.

Several considerations before implementation strategy :

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 Whether the existing strategy had deviated from the initial value or still in inline?
Is it worth, regarding human resources, finance, infrastructure and Etc.?
Whether the strategy has been accepted by the entire staff? Is there anything that does not
agree to the chosen strategy? This helps to stop the sabotage of the team members who are
not satisfied.
Is this the right time to implement?

e. Strategic Evaluation
In the final stage, only the leadership team can assess the performance of the plan
and ensure that strategies give the desired results. Further evaluation will be carried out at
regular intervals, ideally once every three months. This is consistent processes, their leaders
in examine and assess the implementation whether the project is moving in the right direction
and they have a credible plan.

some consideration before making that evaluation strategy:

Suitability - Does it meet the needs identified by the organization?

Feasibility - will it work in their practices? Whether it can be achieved in the company's work
environment?
Reception - Consistency and Consonance
Consistency - Is it appropriate and in line with the objectives of the organization?
Consonant - harmony-economic relations and the implications of changes

Strategic planning is a key component of effective governance and management of

an organization. In simple words, strategic planning is a systematic process to decide on the
key decisions for the success of an organization to thrive in the next few years. The planning
process is a disciplined and time-taking process in decisions and actions that form the
foundation of an organization. Therefore, to conclude, strategic planning is one of the most
important jobs in the organization. Although it takes a long time, but if the process has
running well, it can produce strategies with a great chance of success and profitable for
organization. However, the level of success of a plan also always depends on the level of
experience in an organization in understanding the existence, purpose and function of the
organization. By utilizing the most appropriate strategic tools at various levels of strategic

6
planning, the organization will obtain the ideal strategy plan in accordance with the
objectives and goals of organization.

2. Dell Strategic Changing

Based on case studies on DELL, DELL was in a momentous change in the strategies
used his company. This change occurs is affected by the magnitude of change in electronic
customer situation at that time. CDELL formerly targeting the market for corporate customers
(Business to Business) market but has changed their direction to be direct sales to customers
(Business to Customer). In the DELL strategy to position the company use the strategy of
cost leadership and customer base marketing strategy.

Implementation of cost leadership in DELL can be seen from some of the companys
business aspect. Direct sales over the Internet are cut off most of the cost of research and
development of the market, while sales through the Internet also can reduce the cost of
retailing, the middleman and in their inventory system that can generate a low cost product
to their costumers. By providing low cost but high quality products, DELL has a great chance
to survive in global market competition at the moment and also weaken and destroy profit
margins that sustain their competitors in the market.

The use of the customer base of marketing strategies seen from the way in internet
sales of products DELL, DELL customers can order products according to their need and
specifications. In this way customers can combine the desired components as an example
combines a monitor and a television, the condition is expected to be a big attraction to
customers Electronic at this era. The new concept also supported by the advantage of Dell
standard of their lower the cost of components.

3. DELL Strategic Level Analysis

Strategic level set by the highest levels of management within the organization and
lead to businesses what to do and how resources are allocated among the business. In the case
study DELL there are three levels in different segmentation strategies of each business
operation. The three levels of the strategy include:

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 Corporate strategy

Business Strategy

Functional Strategy

a. Corporate Strategy
General corporate strategy involves long-term goals related to the overall
organization and direct financial investment. their corporate strategy must demonstrate the
advantages of the decision to remain active in the industry when evaluating business
opportunities in areas with complementary activities. With the aim of optimizing the
company's operations, profitability and growth, the company's strategy should compare the
ongoing return on investment in a single business or start a business with the acquisition of
related and complementary.

Of cases DELL, DELL has made a huge change in strategy. DELL at the corporate
level has changed the structure of sales from selling to corporate customers to the customer
directly. Changes in distribution channels and the production process used by Dell in order to
cut costs as much as possible. Sales of products directly over the Internet and eliminates
many distribution channels such as retail shop and middleman to get impact on production
costs to be dramatically reduced, so DELL can lower the price of their products in the market
with ease way. In this way, long-term DELL vision as a provider Electronic products with a
low cost can be realized and also a mission to interfere with profit and margins of their
competitors in the world of electronic markets can also be achieved.

b. Business Strategy
Defined by each business unit strategy (Strategy Business Unit = SBU). The
business strategy is usually formulated by the manager of the business rate through
negotiation with corporate managers and focused upon how to compete in the business world
that exists. Business strategy working to set goals, evaluate the actions of competitors and
determine actions to be taken by the company to maintain and improve their competitive
advantage. typical strategy is to be the low price leader, to achieve differentiation in the
desired quality or enable this feature or to focus on the promotion. Business strategies must
also be obtained and supported by corporate strategy.

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 In the case of DELL, DELL combine cost leadership and differentiation by
categorizing their products are focused on their customers, so that means it can be concluded
that the DELL use integrated cost leadership / differentiation strategy as their business-level
strategy. This strategy allows the company to perform well as the two strategies
differentiation and low-cost simultaneously. DELL strategy undertaken by using the
advantages of the changing in technology the environmental, the changes can provide
advantages for companies to build knowledge to help companies to face technological change
and rapid changes in the external environment. By implementing this strategy, DELL has
accounted for three initiatives such as information network, system manufacturing and total
Quality management system, to make their strategy more flexible due to the main purpose of
the company in a purpose of cost reductions and ongoing product development.

By using the strategy of cost leadership / differentiation DELL can receive the
following benefits :

Adaptation to the changing environment.

Learn new skills and technology

More effectively in utilize the core competencies across their business and product
lines should enable the company to produce atypical features at a lower cost.

c. Functional Strategy
Functional strategic has a narrower scope than the corporate strategy and business
strategy. Associated with business functions such as production functions, the marketing
function, the HR function, finance function, the function of research and development (R &
D). These strategies should also provide data that allows corporate strategy to investigate the
possibilities of diversification. The strategy at the functional level to try to maintain the
company's position to survive in the industry, but also look for signs of external danger.
Therefore, when something bad happens and beyond the control of the company in the
decline in the company's position in the market, the parts in functional strategies can give
signs to the corporate level to implement alternative strategies. Functional strategy should
also lead to business strategies and concepts they most of all is dependent on the results of
answers to how to implement it.

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 In the case of DELL, some strategies undertaken at the functional level is to cut
production lines and logistic in order creating a more efficient business system and cost
efficiency. In analysing the market situation, the company decided to use the efficiency of the
information network (direct sales to customers through the Internet) in improving the
working channel of communication between the company with their consumer with a purpose
to identifying and faster problem solving. DELL through this way can improve his service to
the customer and value the theirs costumers, in the same time it can also provide feedback
and data on the environmental conditions for the corporate quicker and accurately.

4. Dell Strategic Position

DELL is one of the giants in the field of computer equipment in the world. All the
strategies employed will not escape the effects of the environment, capabilities and also the
expectation.

4.1 Environmental
Environmental factors that influence the strategy of a company can be differentiated
to several categories such as: Politics, economic, social, and technology. Analysis on the
environmental factor-factor can provide a snapshot of the conditions that occur in the market
at this time and also provide information about the risks to be faced in the future.

Politics
As a US company, DELL is not immune from the influence of political instability
that occurred in the country. Upheavals that occurred in the country's politics can also make
companies are not welcome in some countries such as some Arab countries, China and Russia
related to the issue of war and also the issues of surveillance conducted USA.

Economic
DELL very directly affected by the changes in some economic aspects such as
changes in currency values, interest rate, inflation rate, macroeconomic stability and the cost
of raw materials and labour. Currency Exchange rate is the factor that most influence on
business performance DELL due globalized operations. In response to the negative impact of
currency changes, DELL has plans to use digital currency in the future to reduce the risk of
price increases and also maintained their position as the cost leader in the industry.

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 Social
The increase in purchasing power and consumption levels in society days now.
DELL big impact on revenue. These increases have an impact on increasing the ability of
customers to buy and spend more money for products computer. However, this condition can
also increase competitiveness in the global computer industry that DELL have to prepare to
face a high level of competition. Increased purchasing power in several countries to three also
provides opportunities for DELL as a provider of low cost products to expand their market to
the new market.

Technology
Technology is a major factor affecting the computer industry such as DELL, level of
development and rapid technological innovation at the present time, forcing Dell to innovate
continuously. Technological innovations at this point should also be done thoroughly on
every aspect of the business is done. The use of e-commerce and mobile commerce are
growing rapidly in the world of sales at this time also opened up opportunities for Dell to
expand their business network, but in the same time competition in the global world will also
be more competitive.

4.2 Strategies Capabilities

Strategy capabilities is the company's ability to survive, thrive and determines the
depanya. In the case of DELL, DELL capabilities will be our strategy Analysis of strengths
and weaknesses in the company.

Strength
One of the biggest computer producer in the world
Direct selling with the costumers through the internet, retail and
telephone direct line.
Customize product with customer specifications
Provide low cost products
A long experience in the computer industry.

If we look from the power possessed by DELL as One of the biggest computer
producer in the world of course, DELL has extensive experience and a strong brand image in

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the market for computer and electronic. Experience and strong brand image which is owned
DELL also the Drag customers to buy their product because of the trust and loyalty that has
been built in the market. Direct selling online also allows customers to buy and look for
information about products DELL easily, quickly and in accordance with the changing social
and technological environment at this time.

One of the key strengths possessed costumers DELL is involved in the production
line, where the customer can order customized products according to the specifications
desired, the program cannot find on any other product and the core competencies of DELL.
In addition, as the cost leadership strategy, DELL always provide their products at lower
prices without compromising the quality of their products but by cutting the cost on the other
channels such as reducing cost in their distribution lines

Weakness
Lack of investment in R & D
Long purchasing process
Lack of after-service facility
Products line really Depending to supplier

DELL shortage seen from the lack of investment in their R & D resulting in lack of
innovation in products DELL, DELL although pawn moves in the manufacture of computer
manufacturer DELL also not supposed to pay attention to investing in their product
innovation in order to compete with their competitors. Without a Manufacturing processes,
productivity DELL become highly dependent on the willingness of existing components
production line suppliers so that it looks not independent. Moving to an online sales lead time
that the need for the purchase process to be very long, because every purchase through the
website will be having the time of delivery which will take several days. This condition also
causes less possessed DELL retail shop and service center directly, this has resulted in
difficult to get an advanced service for their customers.

4.3 Expectation
Expectation strategy used in predicting the opportunity or obstacle that'll come in
implementing corporate strategy. expectation strategy can be done by analysing the

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 opportunity and threat affecting the company and categorize it into to stakeholders,
shareholders, suppliers and customer expectation.

1. Increase in investment in research and development in order to keep

innovation updated and Compete with the other competitors (expectation of
stakeholders)
2. Engaging in merger and acquisition (expectation of shareholders
3. Increasing product range is base on customer insight (expectation of
costumers)
4. Continuing cost-cutting program and simplify all aspects of their
operational aspects, especially on the supplier (expectation of suppliers)
5. Expanding the market to the countries of the world to 3 (expectation of
shareholder and customer)
6. Increasing profitability to fulfil share holder expectation. (Expectation
of shareholders)

Reviews of these expectations from the deferens aspect of the DELL can be use by
the company to create the goal and Also help them to predict the future opportunities in order
to survive and generate maximum profit.

5. DELL Strategic Choice

Strategies choices are concerning the option in relation with the direction of the
company's operation system and strategy implementation. From the case the option can be
analyse into three dimensions:

Business-level strategy
International strategy
Innovation

Business-level Strategy
In this level usually will lead to a strategic choice into differentiation and pricing
strategy in the decision to keep up with competitors in the market. The decision to reduce the
number of product platforms, increasing productivity, reducing inventory levels and
increasing delivery accuracy can be options for the company in their operations. DELL
strategic chose also created by efficient procurement system to increase their position cost as

13
a way to get a better coordination on the global market and also directly reduces the number
of suppliers.

International Strategy
international strategies is the way in diversification and expansion into new
geographical markets. This strategy focuses on business expansion to new markets to markets
outside the country in several ways in like licensing, export direct investment or by acquiring.
From DELL case can be seen that the use of technology in the sales system can be a great
opportunity to expand their market in the global world, the support of the rising purchasing
power in the third world countries also strengthens the opportunity to grow bigger in the
global market.

Innovation
In the innovation strategy options can be viewed from various aspects of the
business operation of the company. Increased innovation in products based on the needs of
the market is essential for the sustainability of the company in the market. Increased
innovation in the system of production, distribution and sale can also be an option for
strengthening the performance of the company, maximize their profit and cope with the
changes that occur in the market environment in the future.

5.1 Main Issues of DELL Strategy Implementation

In the implementation strategy of accuracy strategy formulation was important and

affect the success rate of implementation process. Surely, DELL expect their strategy can be
executed and executed well, by all levels of employees. Implementation and execution are
critical stage after the preparation of strategic plans mature. Determination of success rate of
implementation of the new strategy at the DELL can be seen from the formulation of their
planners, effectiveness and level of achievement of realization.

Changes in the strategy will have a high success rate when the strategies adopted in
accordance with the company's internal capabilities and external conditions in the market.
The decision to use integrated cost leadership / differentiation into the company strategy can
be considered in accordance with the current market conditions that give priority to

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convenience, innovation and distress price on a product. While election to conduct direct
selling to the costumers can also be considered to have a high success rate in reduction of
operation costs in line and also cut the purchase path and relation between companies and
costumers. All the implementation of the strategy that will be created the company also
received support from DELL experience in the industry and also the condition of financial
companies today that can be said to be stable.

However, the failure rate at the time of implementation, there will always be
pressure from competitors who are also trying to implement the same strategy will always be
a potential bottleneck. While the timing is not right also very influential in the rate of failure
in the process of implementing the strategy into an action in a company.

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