Wednesday, September 3, 2008

Strategy Implementation and Formulation: SWOT Analysis Part II

SWOT Analysis is a method for strategy formulation and implementation used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in the early stages of change management. A corporation, product, or process that is not regularly examined and evaluated cannot understand why it has succeeded or why it has failed. A business that objectively and systematically examines its processes can take steps to improve on what worked well and modify or eliminate what worked poorly.

The following is a sampling of SWOT Analysis recently performed by the Author on Dell, Inc.

SWOT Analysis

Strengths

· Alert to the acceleration in the continuing global rate of change, developing trends, and economies.

· Expeditious in its decision-making and execution of goal-directed change that is in alignment with its organizational goals and objectives.

· Strategic management

· Technological innovation

· Rapid Innovation and resourcefulness

Dell’s strategy is; survival, sustainability, revenue generation, and profitability through innovation and speed. Dell’s efforts remain focused on four strategic initiatives:

· Driving global growth

· Attaining product leadership

· Superior customer service

· Embracing Dell’s corporate culture

Dell’s rapid innovation and resourcefulness has helped maintain its ranking amongst the top PC producers. Dell’s strategic focus on the business and educational markets has resulted in a significant market share in each of those segments. The organization was the leading supplier of computer systems business for two years running. Dell’s strategic development of its direct marketing agenda has resulted in phenomenal growth.

Weaknesses

· Competition and substitute availability

· Differentiating divisional or departmental goals.

· Diminished capability to internally support innovations

There are potential ethical conflicts associated with Dell’s competitive methods. “If formal techniques, such as quality function deployment, are not used to explicitly focus innovation efforts on consumer demand, quality can become lost in the firm's narrow pursuit of speed as an end in itself, rather than an instrumental end to the success of the project.” (Kessler, 1996) “Friendly fire” or healthy competition amongst colleagues for idea generation or innovative solutions could result in faulty thinking, resistance, dangerous shortcuts, or liability issues. At a global level this strategy must be well thought out and carefully implemented in order to avoid cultural faux pas that could lead to misinterpretation of the customers true needs.

Opportunities

Dell’s recent business “Latitude” notebook, desktops and mobile workstations were developed with enhancements based on direct customer feedback. These innovations reflect Dell's ability to incorporate direct customer feedback into every product. These enhancements have increased:

· Performance

· Reliability

· Usability

· Environmental friendliness.

Dell’s fourfold strategic initiatives to drive global growth, attain product leadership, provide superior customer service, and embrace Dell’s corporate culture are permeated in everything it does.

Threats

· Compromised processes or products by engaging in too many technological fields and innovations.

· Having too many irons in the fire could result in spreading its resources too thin.

· Temptation to deviate from its own best practices

· Major delays in product rollouts

· Not done enough due diligence in an acquisition attempt.

· Government-imposed regulations

· Regulations regarding employee relations and globalization significantly impact the computer industry.

“The promises and perils of globalization take many forms. The most commonly experienced manifestations are in the realms of economics and culture, but much of what shapes the causes and consequences of globalization today, in any form, is its less glamorous regulatory underpinnings. Whether and how certain interests prevail during trade negotiations depends not only on the quality of the product, service, or idea being promulgated, but the strategic leverage their advocates enjoy (or the coalitions their different types of advocates are able to assemble) in the international forums established to manage the global economy.” (Woolcock, 2001)

Services

Dell consistently delivers swift strategic response to match customer needs to products and service. In addition to a full line of desktop and notebook PCs designed for consumers, Dell offers network servers, workstations, storage systems, and Ethernet switches for business customers. Such tactical maneuvers have allowed Dell to remain the world’s premier direct-sale computer vendor.

Customers

Dell’s strategic alliance with the voices of the customer and stakeholders to accurately project and exploit trends and make prompt decisions by reassessing strategies, continually adds competitive advantage by leveraging and enabling the latest process concepts. Dell’s strategy to incorporate customer and stakeholder feedback in process innovation and product design ensures customer loyalty. This integration serves to prevent misinterpretation between perceived and actual customer needs. These alliances reduce time and cost as they minimize or remove steps in the research and development process. It also provides motivation for its employees. Rapid product development increases the learning capacity of employees while strengthening their technical, conceptual, and interpersonal competencies.

Keys to Success

· Commit to providing customer specific personal computers and software quickly, efficiently, and at a competitive price.

· Consider third-party providers in the delivery of hardware service.

· Provide a reduction in overall cost of ownership for personal computers, specialty products, and services.

· Be the single point of contact for customers and outsource complex projects.

· Enhance manufacturing efficiencies.

· Focus on the hardware market while managing other product lines and services businesses. (Aragon,1998)

Summary

Organizational survival is reliant on its capacity to project and maximize trends, make express decisions by reassessing strategies, continually adding competitive advantage by leveraging and enabling the latest process concepts. Organizations must be responsive, agile, and capable of adapting to change quickly, as change is inevitable. Historically, management teams throughout highly successful organizations have correctly identified those change initiatives through SWOT Analysis that ultimately brought about competitive advantage and how they might evolve. The critical challenges marketing managers of the twenty-first century face today require innovative thinking and integration to create an agile infrastructure.

Aragon, L. (1998, July) Dell’s Channel Secrets Revealed. VAR Business. P. 92-100

Kessler, E. (1996) Innovation Speed: A Conceptual Model of Context,

Antecedents, and Outcomes. Academy of Management Review. 21 (4) 1143.

Woolcock, M. (2001, November) Global Business Regulation. Contemporary Sociology. 30 (6)

http://www.dell.com. (2005, July) Dell Expanding With Global Opportunity, Diversified Technology Portfolio Supports Revenue Growth

2 comments:

Christine Bean AKA the Beanstalklin said...

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Christine Bean
www.christinebean.com

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