Dell Vision

Vision

for

Disruption S1: Superior Stakeholder Satisfaction

S2: Strategic Soothsaying

Capabilities

for

Disruption S3: Positioning for Speed

S4: Positioning for Surprise

Tactics

for

Disruption S5: Shifting the rules for competition

S6: Signaling strategic intent

S7: Simultaneous and Sequential strategic thrusts

Fig. 2 - New 7-S Framework

Dell Computer - an example of an Agile Corporation

In the following explanation of each component of the 7-S framework, an example is given from Dell Computer Corporation Inc., one of the most successful proponents of disruption tactics and a first-class example of an agile corporation.

Started in 1984 by Michael Dell as a one-man part-time business operating from a university college dorm, Dell Computer today has around US$30 billion in sales, has approximately 27,000 employees and has operations around the world. It is the number two PC supplier in the world and is number one in the USA. (See Appendix).

S1: Superior Stakeholder Satisfaction

Dell people work hard at understanding and satisfying the needs of customers. Their major market disruption is to build to order, giving customers exactly what they want and because they sell direct, they do not have the costs associated with middlemen. They also pay great attention to customer service. Because of the policy of minimal inventory, Dell can introduce the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels. Dell turns over inventory every seven days on average, compared to 80 days for competitors, keeping related costs low.

Dell also has programs in place to pay attention to the needs of employees, suppliers, and investors.

S2: Strategic Soothsaying

According to D'Aveni, strategic soothsaying is a process of seeking out new knowledge necessary for predicting or even creating new temporary windows of opportunity that competitors will eventually enter, but are not currently being served by others. This requires two competencies: motivated, empowered workers at all levels in the organisation, and knowledge of the future or an ability to create the future.

Some of the firsts that Dell has been involved in are being the first computer company to market PCs by phone, the first to sell direct in foreign countries, and the first (by two years) to sell via the Web.

Because they sell direct, Dell has an enormous amount of business and market intelligence available within the corporation. All employees are trained to take comments from customers and organise these comments. They also use programs such as their Platinum Councils held with corporate clients twice a year to understand customer and market needs.

Dell executives use Competitive Intelligence in the guise of War Games to play the part of a competitor and devise a plan for destroying Dell. Author Rebecca Saunders says the result is not only defensive plans, but offensive plans as well. When entering foreign markets, they also study carefully:

* Local competition

* Current distribution channels and marketing strategies used by local companies

* Comparisons of local products and services with those Dell will offer

* Consumer attitudes to the products and services Dell propose to offer

* Local skills and abilities and location to help to determine on-site locations for Dell facilities

* Sourcing - ability to source locally in the foreign country.

S3 & S4: Positioning for Speed and for Surprise

D'Aveni says that by pre-positioning the company's organisational capabilities for speed and surprise, the firm creates the ability to react quickly to opportunities in the environment or to proactively out-maneuver competitors at every stage of the dynamic strategic interactions between companies.

It's one thing to have a good idea - it's another thing to implement it. One of Dell's strengths is in execution. As Andrew Grove of Intel said once, "(Dell) tackles jobs others think are overwhelming and prevails."

Dell uses product teams to make break-throughs in problem solving. Questions are often used to stimulate thinking that leads to innovative thinking, and new ideas can lead to competitive advantage.

As Michael Dell himself says, "Things happen in the morning that you have to react to in the afternoon. We have to be competitive 24 hours a day, 365 days a year, or else we lose business. A sense of urgency about communicating