How Dell Does It

By Steven Holzner

Michael Dell is the youngest CEO ever to enter the Fortune 500 - his company's story will appeal to anyone in the business world. Dell's fiscal fourth-quarter 2005 was their best-ever operating... This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 0072262540
• ISBN13: 9780072262544
• Release Date: December 2005
• Publisher: McGraw-Hill
• Length: 234 Pages
• Weight: 0.55 lbs.
• Dimensions: 9.2" x 0.9" x 6.3"

Customer Reviews

Why Dell works for its "Dudes"

Using material from Direct from Dell, by Dell Computer founder Michael Dell, and from computer industry Web sites and trade publications, author Steven Holzner does a solid job of describing Dell's rise over the past two decades and explaining what it is doing now to expand its market dominance. If you want all the details, though, you may feel frustrated. For example, Holzner says that Dell obsessively tracks the profit and loss of every business unit. However, he does not explain how. Which metrics does the company use, other than the often-cited ROIC, and how did it develop them? Similarly, Holzner notes that Dell analyzes markets and moves into them at just the right time. But how is it able to judge them so accurately? The book plateaus at the level of reportage, rather than rising to the level of inside analysis. However, if you are looking for a summary of Dell's very successful business strategy, we recommend this overview.

Changing the way companies do business...

Very rarely is a company able to completely alter the rules of business. One of those companies is Dell, who redefined how computer manufacturing, and even manufacturing in general, can be done. Steve Holzner examines their business in the book How Dell Does It. Normally, I'd put the table of contents here, but this time I'll have to pass. I finished the book at the airport waiting for some luggage to arrive, and then left the book in the luggage cart when I drove off. Such is life... :) Holzner does a good job in examining some of the core tenants of Dell's business model, such as marketing direct to the customer and keeping virtually no inventory. Dell has taken the "just in time" inventory philosophy and pushed it to the extreme, often having suppliers make deliveries every two hours in order to have inventory supply meet the current order demand. And since the customer pays right away and Dell pays the suppliers in 30+ days, they are able to finance their business with "free money" to a large degree. With their marketing plan of going directly to the customer, they are also able to understand *exactly* what the customer wants, and they focus on the large sweet spots that can be effectively covered with few variations. Why offer 10 different component options to hit 100% of the customer base, when 3 will cover 98%? Techniques such as that have allowed them to achieve margins that are not approached by other computer makers. To Steve's credit, he also points out where some of the practices hit up against logical limits. For instance, you can push off most of the inventory supply and risk to your suppliers. They in turn try to do the same thing to *their* suppliers. At some point down the chain, someone's taking a lot of risk for extremely small margins. He also covers some of the moves by Dell to market indirectly (like through WalMart) that failed miserably. Even with those "spots" being covered, I still am a bit cynical that it all runs like a well-oiled machine. I was an Enron employee during the time when they were touted as the most innovative company in America, only to see all the flailing around that happened behind the scenes. And we all know now how it turned out. By no means is Dell an Enron. But I always wonder how much of a gap exists between what executives say in books like these, and what really happens on the shop floor... My cynicism aside, this is a book you should read if you're interested in how innovative companies can change the rules by which everyone operates. Dell wrote the book on how to connect the customer to your business...