Dell is the world's largest direct selling company of PCs, operating in 80 countries with 57,000 employees. Founded in 1984 by Michael Dell with $1000, Dell grew rapidly to become a $100 billion company by 2005 and the top PC retailer. Dell changed the industry by eliminating retailers and shipping customized hardware and software directly to customers based on their specific needs. Dell also diversified into consumer electronics and set up kiosks in malls. Dell built competitive advantages through its direct sales model, efficient supply chain, just-in-time inventory techniques, and global manufacturing plants. Dell's control system included financial and non-financial performance measures across business units and expedited assembly through localized decision making.

1. Presented By:
Ajesh Raj 1261
Shimsi Suresh
Anirudh Sangi
Management Control System

2. Introduction
• Dell-World’s largest direct selling company
• With 57,000 employees in 80 countries & customer’s in 170
countries
• Headquartered in Austin, Texas
• Founded by Michael Dell in 1984 at the age 20 with $1000
• Youngest CEO by 1991
• By 2005 Dell valued more than $100 billion
• Dell became top retailer of personal computers
• Competitor’s used “build-to-stock” technique
• Dell changed the tradition by eliminating retailers
• Dell shipped product directly to customers

3. Cont’d…
• Accepted customized order’s from customer’s for hardware
& software
• Declining personal computer market pushed Dell into
consumer electronics
• Dell set up kiosks in malls and planned their marketing
campaigns
• In 2005 Dell was ranked as America’s most admired
company by Fortune
• Growth rate 19%
• In August 1993, Dell engaged Bain & Company, Inc., to
judge business-unit performance

4. Dell’s Strategy
• Dell’s Direct Business Model
• Customized products
• Understanding need of customer & provide effective
solution
• Switching on to other consumer durables
• Evaluation of market place, price category and supply
partnerships
• Setting up Dell Stores in Mall

5. Building Competitive Advantage
• Customer knowledge advantage
• Direct Sales Model
• Efficient Supply Chain/Distribution Model
• JIT Technique which operate for only 6 days of inventory
• Replacing inventory with information
• Technology Advantage
• Diversification into other consumer durable products
• Global Manufacturing plants-Cheap Labour

6. Dell’s Control System
• Performance Measures: Dell’s scorecard included both
financial measures (such as ROIC, component purchasing
costs, selling and administration costs) and non-financial
measures (component inventory stock outs, finished goods
inventory, A/R day and A/P days).
• Expedited the assembly process: Dell recognized early the
need for speed, or velocity, quickening the pace at pace at
every step of business.

7. Cont’d..
• Localized decision making system: Dell used its structure
as a flat organization as a competitive advantage and
localized its decision-making. If an issue did not require a
higher up’s attention, then decision would be made
without involving him. This would not have been possible
in companies bogged down by layers of bureaucracy.
• Business unit Performance: in 1993, Dell developed a set
of metrics to judge business-unit performance.