Saturday, September 14, 2019

Compare and Contrast Michael Dell and Andy Grove Essay

Michael Dell, founder of Dell Computer Corporation had his humble beginnings in the computer industry when he began selling personal computers directly out of his dorm room. This impressed upon him that this was the path to take in his professional life, he started his company in 1984, registered as Dell Computer Corporation. Krames, (2003) Unlike other computer companies at the time, Dell was heavily focused on the end user, the consumers who would actually be purchasing the computers. By placing the emphasis on the consumers instead of big box stores to sell his product he brought a new way of selling computers to the industry, which was an uncommon way of doing business at that time. This is a notable contribution to the computer field, as it made other computer companies rethink how they would sell their products, to try to combat Dells’ growing market share. As Krames (2003) â€Å"Dells direct model of â€Å" mass customization† was not born of any desire to revolutionize an industry. Instead, it was foraged through a â€Å"bottom-up† strategy based on customers’ needs and preferences.† (p.59) This proved to be a successful strategy, in 1988, 4 years after opening, Dell went public bringing in an impressive $30 million at its IPO. Krames, (2003) Seeing soaring success in personal computer sales, Dell decided to try a new direction, Olympic was introduced. â€Å"Olympic was a line of desktop and workstation computers that were able to perform a wide array of tasks.† (Krames, 2003, p. 67) In releasing this new program Dell neglected the principle part of his successful strategy-what do the costumers want? Resistance from consumers was noted, the consumers did not feel that they needed what the new line offered. Olympic proved to be Dells biggest tanking product. Andy Grove, born Andras Grof of Hungary, cofounded Intel corporation in 1968. Krames, (2003) Grove’s contributions to the computer industry is highly notable. Grove, along with his partners revolutionized how the computer industry looked at and transistors on computer chips. His contribution to the field was so noticeable, that Time magazine bestowed on him title of Person of the Year â€Å"for his role in fueling the computer revolution† (Krames, 2003, p. 135) Grove met with considerably more resistance and opposition that Dell. Intels’ first large confrontation and change was in 1980. The Japanese began producing chips that were not only lower cost wise but also considered better in quality. Krames, (2003) Groves was able to associate several factors that were partially responsible for this crisis. Intel had of recent, been constantly late with the release of new products. To compound this, the company had also neglected to invest in new manufacturing plants in a timely manner. As Krames (2003) states â€Å"†¦ the cause of the problem came down to the wrong strategy and poor execution† (p. 137) Grove and the then current CEO made the hard decision to get out of memories. Even though this is what the company was based on, and started from, they realized that if they remained in this market segment it could be the end of Intel. They made the hard decision to move into microprocessors, â€Å"the thinking part of the computer.† (p. 139) The next big issue Intel faced was 14 years later, in 1994. Intel was releasing its newest microprocessor, The Pentium. A small design flaw was detected, which prompted IBM to halt shipment of all Pentium-based computers. â€Å"Intel’s credibility- and, by extension- the entire company- was threatened as anxiety about the â€Å"bug† spun out of control in the business community.† (Krames, 2003, p. 140) Grove made the decision to replace all processors at the cost of a half billion dollars. This strategy, while costing a massive amount to the company, restored customers’ faith. Dell and Grove have a few similarities that can be noted. Each created a hugely successful business out a need or want that they saw that was not currently being fulfilled. Dell with his customer oriented selling approach, Grove with a computer chip that enabled a computer to run better and faster. Each man faced a point in their career of what Grove called a â€Å"strategic inflection point†Kramer (2003) While the magnitude of these was vastly different for each, it caused each man to reexamine how the company was running. The biggest difference that can be seen between these two is, while Dell simply restructured an already successful method of operation by segmenting it further. Grove completely changed how his company did business by changing the product, which could have ended in massive failure, but thankfully did not. Dell chose to focus more microscopically on the end user, on a person-to-person basis. Grove chose to focus more on the big picture with a mass production outcome. I think Dells’ beginnings of selling computers out of his dorm room gave him a taste for the personal aspect which his business is so well known for. Dell saw that this more approachable method worked for people, and obviously worked for him, thus creating one of the largest PC sales companies in the world. Grove’s very obvious personal factor that affected his business, is his background from before he entered the US. It even gave him â€Å"His personal manta, â€Å"only the paranoid survive†Ã¢â‚¬ ¦Ã¢â‚¬  (Krames, 2003, p. 135) With this in mind he was able to overcome Intels’ crisis involving the Japanese, coming out on top, more successful than before. Each man is hugely successful, simple choices made throughout their careers differentiate them from one another.

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