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Dell ad Google Case Study

Final report (dell &google case Study)

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Dell ad Google Case Study

  1. 1. 1 FINAL CASE REPORT Strategic Management by Lucia Veronica Denis Senwayo
  2. 2. 2 Q1. Why was it so difficult for Compaq to imitate the Direct Model of Dell Computer? Dell operated as a pioneer in the direct model approach, delivering individual customized according to costumer specification. Selling direct to end costumer dell can keep a larger slice of profit for itself, by experiencing historical sales record and anticipating costumer demand. Additionally, Dell Applied Just-in –time, establishing close relationship with suppliers, co-location close to them, and thus minimizing inventory cost. Dell’s activity system diagram bellow describes the correlation between the activities
  3. 3. 3 On the other hand, Compaq sells through three distinct ways: 67% of its PCs through 44,000 distributors and resellers, 25% at retail, and 4% direct. Later, Compaq unveiled its DirectPlus Program, intended to sell customized PCs directly to small and midsize companies. Compaq target individual costumers and business companies. While Compaq supplied machines based on orders from distributors, resellers, and retailers and direct, Dell took orders directly from customers. Dell focused on large companies (Businesses and government institutions accounted for 77% small office users 18%, and educational institutions 5% and single costumers less than 2% of Dell’s sales). The table bellow summarizes the business model used by Dell and Compaq. Dell Compaq Distribution system Direct to end costumers Distributers, resellers and direct model Target costumer Largely Businesses and government institutions Largely individual and small companies Costumer support Hotline and on-site support Support services Push/ pull approach Pull. Based on costumer order Push. Based on demand forecast from retailers Inventory Reduced inventory (low cost) High level inventory To sum up, Compaq lied on imitating some features of Dell Business model, which leads the company to loose focus. A combination of direct model with the use of intermediary’s distributers is difficult to manage, as well as even using direct model the
  4. 4. 4 target segment were different. Dell has a unique activity system, where activities are tightly linked and indeed to that the company established sustainable strategic position rather than operational effectiveness. So, it was difficult for compact to imitate the whole system. Q.2 Assess the cross-border transferability of Google’s search 
 engine business. What should be its access form? On Google’s statement mission aimed to organize world’s information and make it universally accessible and useful, the company has established competitive advantage by improving in search and advertising and establishment of strong corporate value. Because search engine business is valuable and demanded worldwide, it would be transferable, however cultural, political and legal factors might challenge Google’s ability to keep its “Don't Evil” corporate value at cross-border. Regarding to access form, it should be technology focus and firm based. Google competitive advantage is its brand, strategic innovation and management capabilities, and then as long as it can transfer its capabilities, Google can exploit foreign markets by either by direct investment or licensing its technology for local company or establish joint ventures with local companies. For example, on the point of view of Human Resources, the ability of Google to transfer cross-border is high due low transnational cost needed, but Google can either decide to exploit internal HR by outsourcing some services or
  5. 5. 5 licensing technology. So, Google’s search engine cross-border would transferable trough explicit articulation. Despite the transferability, as a result of Internet, the world has become flatter, thus search business engine business should be able to cross borders and profitably easily. However, cross-border search business might always be challenged by ethical issues, authorities in some countries may have some hard rules regarding to Internet. They may impose some restrictions the corruption of their nation’s youth and culture, restrict any content that they judge as possibly threatening state security, disturbing social order, and infringing on other’s legitimate rights. So, Google’s corporate value transferability might be challenged and new versions of search might be necessary. In conclusion, Google’s search business is somehow transferable.
  6. 6. 6 Q.3 What was the strategic intent behind the Organization 2005 initiative? What VRIN resources did they want to create for what opportunities? Organization 2005 was an aggressive restructuring program designed to development and roll out of new products globally, and thus generating bolder innovations, boosting P&G growth (sales and profit), expediting of management decision-making for the company's global marketing initiatives and fixing the strategy-formulation and profit-creation responsibilities on products rather than on regions. Basically, Organization 2005 strategy intended several changes on P&G organizational culture, process and structure. The need of cultural organizational changes results from P&G slow culture, conformist and risk averse that has leaded to company’s losses, and a cultural revolution based on stretch, innovation and speed would allow P&G to implement a global rollout of new products. Complementary to organizational culture, changes in traditional systems and processes that include performance-based component of compensation, extension of stock option plan and budget system would result on flexible and integrated business planning process. Finally, by changing the structure from the primary profit responsibility of P&G four regional organizations to seven global business units responsible for product development, manufacturing marketing, would eliminate bureaucracy and increase accountability. The table bellow describes P&G VRIN characteristics.
  7. 7. 7 Resource Value Rare Inimitability Non- Substitutability Competitive advantage offered Research and Development Yes Yes P&G exploits technology worldwide. Yes. Difficult to imitate. P&G combines global and local R&D teams Yes Sustainable competitive Advantage Brand reputation Yes Yes. Unique brand awareness achieved through SK-II Yes Yes In specific case of SK-II in Japan Sustainable competitive Advantage Human Resources Yes No Difficult to imitate. Global HR combination No Depends on P&G ability to keep HR structure Horizontal integration Yes. Enhance product portfolio No Imitable. But might be difficult for competitors to succeed by non core business products No Sustainable competitive advantages (in Japan) Marketing Yes Yes. The use beauty counselors and celebrities. No. But depends on competitors capital No Sustainable in Japan Organizational Culture Yes No No stretch, innovation and speed can be imitate by competitors No Might change as company age or changes on team management or international competitive environment It can bring either short or long term competitive advantage