An Evaluation of a PESTEL Analysis

An Evaluation of the effect of a PESTEL Analysis on international project(s) for companies operating in an international environment with specific examples of PM case studies in relation to PESTEL.

 

Introduction

The PESTLE analysis is a planning tool to strategically evaluate the effects of external factors on a project or the external environment of a company. This kind of analysis is a crucial phase within the Project Planning Process. (Haughey, 2014) PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal and Environmental factors. (TeamFME, 2013, p. 6) By the PMI the PESTLE analysis has as well been referred to as a 'prompt list … for use in risk identification'. (PMI, 2009, p. 82)

Figure 1 - Macro environment forces affecting a firm
(Jurevicius, 2013)

Project management, according to the PMBOK (PMI, 2013, p. 5), is 'the application of knowledge, skills and techniques to execute projects effectively and efficiently'.

The model of the PESTLE analysis may not only be used for the evaluation of companies, industries or entire nations but even more importantly for individual projects. It is of importance that only external factors are taken into consideration on which the company and the industry have no immediate influence. In this way, the PESTLE analysis forms a summary of the driving forces and the macro environment. It shows which factors were of particular importance in the past, to what extent this could change in the future and what the implications on the project, company or the entire industry may be. For instance the PESTLE analysis can help to identify the differential impact of individual forces for change. As business changes does the economy and the environment which implies the constant risk of a project's scope being influenced by external factors. (Harrin, 2009a)

These forces are highly likely to influence and change the structures of projects, industries or markets. For example, the reduction of regulatory and trade barriers, improving communications technology, increasing competitive pressure on domestic markets and increasing convergence of consumer needs can be driving forces for globalization.

Political Factors

The most important factors of the political environment for businesses are the organization and stability of the political system of a region. That particularly includes stability and reliability of political institutions and their role in the design of economic life, e.g. interventions, subsidies, competition policy, trade policy, etc.

With regards to projects the internal political factors that need to be considered, like in-team conflicts, cohesive projects, and personal interests, can be influenced and managed by the project manager and the stakeholders (Dcosta, 2011) contrary to the external ones which must be followed mandatorily.

Government policy decisions mirror the political defaults but can easily have an important impact on the legal presentation found in laws and rules, for example with regard to employment laws, consumer protection directives, taxation design, trade restrictions or regarding Health & Safety Requirements. (TeamFME, 2013, pp. 12-13)

Economic Factors

The economic environment describes economic developments, as applicable at a global and national level or, for example, in decisions to be made regarding the location for the direct vicinity of the proposed site.

Economic environment factors include not only economic growth, GDP & GNP, interest rates, inflation, exchange rates, taxation and unemployment rates, but as well the costs of raw materials such as energy, petrol and steel. These affect the company in the form of demand, competition, cost pressures, investment climate and investment risk (due to the uncertainty about expected returns). To understand the future development of the economic environment factors requires that factors such as financial policy, economic policy and monetary policy, the structure of capital markets, infrastructure, availability of production factors, etc. must be studied. (TeamFME, 2013, pp. 13-14)

Within projects the economic factors to be considered would shade light on the financial part, the project cost management area. Questions regarding the budget and a contingency may be asked as well as the sponsor's attitude towards budgetary tolerance.

Socio-Cultural Factors

Social factors include characteristics like population composition and demographic change, income distribution, social mobility, lifestyle, work and leisure time management, consumer behaviour, level of education, and even religious beliefs but as well values, attitudes and behaviours of people that might be future employees, customers, suppliers or other stakeholders in relation to the company, that need to be considered. (TeamFME, 2013, p. 15)

All these factors may influence the design of work and production methods as well as demands for products and services or even the company itself. Rising environmental and health awareness and individualization may be important processes in a society to be considered.

Questions may arise like how changes in the age structure would affect the business, are there new social security regulations due or are there new trade union strategies in sight which might affect the business; these are questions which should be answered beforehand.

Project-wise these factors are more internally focused as they would consider for example the structure of a project team, age structure, training needs or the morale of a team.

A Cadbury Schweppes Case Study - Poland a developing market

Cadbury Schweppes started manufacturing chocolate in Poland in 1993. (The Times 100, 1996) Having evaluated the political factors with a positive outcome by doing a PESTLE analysis they chose to enter the polish market. Why did they chose Poland and not any of the other eastern European countries like Hungary, Czech Republic or Slowakia ?

Politically Poland had already developed a stable parliamentary democracy, neither did they face ethnic strife nor border disputes and an Association Agreement with the European Union was already signed. The Polish government recognized that to drop its former communist image and to look forward to the Western market with a proactive commercial setting, major changes in culture and attitude would be required. One way in which this could be addressed, was the promotion of the establishment of companies from Western Europe. The already existing good political ties with Great Britain, where also a significant Polish community of about 150,000 residents existed at that time were just a positive complementation for that.

Economically Cadbury Schweppes chose Poland, as amongst the countries above they had with 38 million (1990) the largest population (WPR, 2014) which meant for Cadbury Schweppes a broad consumer base which as well was already strongly western oriented. At this time, none of the major western confectionery products manufacturer had yet opened a branch in Poland. Also the investment prospects in Poland were excellent there at that time. Although having been under communist regime for 45 years, the private business sector was still very presentable.

From a socio-cultural view Poland as well presented itself as a distinguished target. Statistically the population size was predicted to stay stable. The local labour market was very well trained and offered skilled workers. A decisive reason was finally that in Poland the per capita chocolate consumption in comparison to the rest of Eastern Europe was considerably high.

 

Figure 2 - Confectionary: Ranking of Per Capita Consumption (The Times 100, 1996)

This continuously and still rapidly changing political positive factors, the positive presentation of the economic landscape and the welcoming socio-cultural picture were key reasons for Cadbury Schweppes' decision to choose the emerging Polish market for their expansion.

Technological Factors

The information and communication technology has revolutionized work processes in businesses and caused huge efficiency gains. E-business has changed the unwinding of transactions but as well opened ways to completely new business models. This means that a company has to master additional technologies that have appeared unimportant in the past.

Important factors to be considered are not only the basic infrastructure level, location-wise the presence of technology clusters, such as Silicon Valley (Haughey, 2014), but as well the Internet and Communication infrastructure. Questions about the spending on research & development in the public and private sectors, the rate of technological change, the strong presence of certain technologies in a region, the Legislation regarding technology or governmental technology incentives need to be answered. (Jurevicius, 2013)

In terms of projects the technological factors to consider refer as well to changes in scope with new developments arising but as well brings up questions like the technological team support or the technological constraints the team needs to work in and what technology is to be deployed as part of the project. (Harrin, 2009b)

A Vodafone Case Study - Using technology to improve economies

In 2007 Vodafone, together with its local telecom affiliate, Safaricom, launched 'M-PESA' in Kenya (Business Case Studies, 2014) which is now 'the world's most successful money transfer service'. (Vodafone, 2014)
    

Vodafone recognised the infrastructural and communication situation in Kenya very well. The Economy is mostly agricultural, telephone landlines are hardly to find and expensive to install, the banking system is inadequate and only 20% of Kenyans have a bank account. Due to these conditions small businesses find it hard to operate. Vodafone applied for funding from the Financial Deepening Challenge Fund (FDCF), which is a UK fund established to aid international development, and received almost £1 million (ICAEW, 2014) to set up this service. 'A mobile network is quick and easy to install and less expensive to run than landlines.' (Business Case Studies, 2014)

By evaluating the technological factors, mostly the technological telecommunications infrastructure, Vodafone achieved to set up a national money transfer service in Kenya but even extended this idea of 'M-PESA' to 9 other countries, mostly in Africa, by today. Vodafone realised early that this wasn't about developing new technology, it was about a new application of existing technology.

The rapid growth in the telecommunications industry in Africa has not only brought significant benefits to the wider economic development as for example a stimulation of the economic situation at the micro level and a continuous increase in trade particularly on a rural level but furthermore Vodafone benefits of a stable economy which improves the long-term planning on the African continent.

Legal Factors

The legal framework is defined at the local, regional, national and supranational level. This includes the legal standards that affect companies operating in the region incorporating legal rules of corporate governance, taxation, liability of producers and labour legislation as well as investment, environmental protection and patent regulations and legal approval procedures or the enforcement of patent claims. (TeamFME, 2013, pp. 12-13)

Furthermore, European companies must also keep the impact of EU guidelines in mind that can be quite important with regard to global expansions for example regarding products produced abroad under legal aspects but due to EU regulation would be prohibited to be sold in Europe such as the sale of cosmetics tested with the aid of animal experiments which may in some countries not only be allowed but even legally required.

Internally it needs to be considered how information governance and data protection elements that need to be observed, how is any test data used during testing treated. In what regulatory frameworks will the project be operated in and what legislation is to be followed for example regarding health and safety regulations or from a labour law perspective. (Harrin, 2009b)

Environmental Factors

The ecological environment must be seen in close relationship to the social and political-legal environment. While the surrounding conditions very much limit the possibilities of the company, for example in regards of permitted production processes or environmental constraints, there are also numerous opportunities to achieve competitive advantages through eco-friendly products and manufacturing processes.

However, the environmental factors also include the presence of raw materials and economic access to these. Likewise logistical aspects can be relevant in the context of location decisions to be made, such as the connection of a production plant to the world market by its proximity to waterways.

From a project management viewpoint factors that may need to be considered could be the impact on the environment that the project might have and how that would need to be addressed. Is the project considered 'green', will emails be printed or unnecessary paperwork be produced and how is that intended to be managed. (Harrin, 2009b)

The Body Shop – Pursuing Social and Environmental Change

'The Body Shop' (hereafter TBS) is a British retail chain for cosmetic products. It is advertising with the waiver on animal experiments, as well as with other ethical principles. (The Body Shop, 2014) For many years TBS regularly performs campaigns pointing to abuses and to proceed against them. The first of these campaigns was launched in 1986 to save the whales. In 1990 'The Body Shop Foundation' is founded, a charitable organization that supports human rights projects and environmental protection groups. Over the years many campaigns followed.

TBS made Ethics and Social Responsibility their mission. This operating philosophy developed into a major aspect of their operative strength. TBS is mainly engaged in the fields of animal rights and environmental causes and supported with substantial parts of its profits organizations such as 'Amnesty International' and 'People for the Ethical Treatment of Animals' (PETA). In appreciation of one its "5 pillars"
'Support Community Trade', 'Defend Human Rights', 'Against Animal Testing', 'Activate Self-Esteem', and 'Protect Our Planet' (The Body Shop, 2014) no animal testing has been carried out by TBS for more than thirty years. In fact, TBS and their global campaigning against animal testing for cosmetics purposes made them the first international cosmetic brand to be recognised under the human cosmetics standard for its 'Against Animal Testing' which obtained the support of the EU and finally led to the ban of cosmetic products that were tested on animals in Europe. (Lin, 2010, p. 6)

Due to TBS's stance towards animal rights legal aspects impeded TBS for years from establishing itself in the Chinese market. The fact that at least some of their products must be tested on animals contradicts the basic pillars of TBS's philosophy. In consequence of this, TBS announced on 12th March 2014 that they have "removed all its products from duty-free shelves in China after it was revealed the ethical company's products were at risk of testing on animals by the country's authorities" (Davidson, 2014) and retreats completely from the Chinese market until the Chinese government rethinks their opinion about animal testing on beauty products.

From the view of environmental factors TBS achieved significant competitive advantages through eco-friendly products and manufacturing processes. Their campaigns not only raised consumer awareness about grievances but as well evolved to their most important operative strength. In a survey conducted by TBS (The Body Shop, 2009) in 2008 97% said 'that The Body Shop Values are either "important" or "very important" to them as customers'. According to this survey 84% of their buyers 'believe that it is "very important" that we ensure that our products aren't tested on animals.' Finally 34% said 'their purchases of 'The Body Shop's' products were based on the ethical reputation of a company.'

Conclusion

A PESTLE analysis is a very useful tool, a starting point for the analysis of external environments, to be used to look outside the company to evaluate what may or may not happen. It is useful to assure that none of the basic factor are failed to see. It is an agile process which spans through all areas in the Project Planning Process. Using the PESTLE analysis by continuously re-defining the project scope is as important as constantly identifying and analysing the change of risk factors.

As with all tools there are advantages and disadvantages to be considered. Some of the advantages are the simplicity of the analysis and the fact that it stimulates an insight of the wider business environment. The development of external and strategic thinking is stimulated. Some disadvantages of the PESTLE analysis are, that care has to be taken not to over-simplify the analysis as it easily happens to consider too few data, that the tool needs to be used on a regular basis, that it requires different people being involved to have an insight on different perspectives and the risk of collecting too much data as this may end up in 'paralysis by analysis'. (TeamFME, 2013, p. 22)   

Figure 3 - Strategic Formulation Process (Rungwitoo, 2012)

However, to win really meaningful findings, it is not enough to look at the PESTLE analysis as a mere listing of factors. Rather, it is just one of the tools to be used in the process of developing a company's strategy.

'A PESTLE analysis should feed into a SWOT analysis as it helps to determine the threats and opportunities represented by macro-environment forces that the organization usually cannot control.' (Oxford Learning Lab, 2012) The outcome of this combined analysis can then be translated into a task list for the Project Planning Process. Other tools to be used, in conjunction with PESTLE, could be Porter's Five Forces, the Boston Matrix and the Ansoff Matrix.

 

Bibliography

 

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Lin, J., 2010. How important is the social responsibility stance of 'no animal testing' for a cosmetic company? The case study of The Body Shop. [Online] Available at: https://www.academia.edu/3791812/How_important_is_the_social_responsibility_stance_of_no_animal_testing_for_a_cosmetic_company_--The_case_study_of_The_Body_Shop [Accessed 20 11 2014].

 

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PMI, 2013. A Guide to the Project Management Body of Knowledge. 5th ed. Newtown Square(PA): Project Management Institute.

 

Porter, M. E., 1998. Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York(NY): Free Press.

 

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An Analysis of the Marketing Strategy of DELL Inc.

Executive Summary

In the subsequent report the Marketing Management Strategy of DELL Inc. will be presented and analysed. Overall the report is structured into four parts.

Incipient the reader will be introduced to DELL and a short history of the company will be provided to continue in the main part providing a short summary of their actual marketing strategy and their strategic change from a consumer PC seller to one of the world's largest corporate solutions provider, showing early trends by selling direct through the internet to today's challenges due to changes in the market and declining PC sales in the industry. DELL's opportunities and threats, their strengths and weaknesses are outlined using different tools like SWOT, Porter's five forces and PEST, their business portfolio is analysed using a BCG matrix and the reader will be led through the application of Porter's generic strategies. DELL was always very effective balancing their demand and supply which will be shown and DELL's marketing mix, their effective pricing strategy applied on their favourite market place, the internet will be examined not leaving out their expansion to emerging markets where they sell through their own retail stores. The main part will close summarising their Sales strategy by outlining DELL's current growth plans being 'in it to win it'. They signalise by that they are 'back'. After a short period of downturn in the mid 2000's Michael Dell returned as CEO, they restructured, still focussing on their major business, corporate, but emphasizing on gaining their strength on the consumer market back to where they were in the 80's and 90's by targeting the new market for mobile and hybrid solutions.

Concluding that DELL is doing well the final part will still give recommendations and suggestions on how to maintain and improve their still strong position in the PC industry.

Introduction

The following report attempts to identify, analyse and interpret the Marketing Strategy of DELL Inc..

The first part will introduce the company and its history while the second part outlines the company's current marketing strategies showing their corporate mission and vision, their target market, DELL's business model and philosophy and the actual market trends.

The main part examines DELL's strategic business units using SWOT, Porter's five forces and PEST. Furthermore an analysis of DELL's business portfolio will be undertaken using the Boston-Consulting-Group-Matrix. It will be examined which of Porter's Generic Strategies they follow and what kind of demand DELL faces and how they balance between demand and supply. Also DELL's marketing mix will be studied and their general sales strategy will be examined.

Finally the report concludes using the findings to provide recommendations and suggestions for potential solutions and future development.

DELL Inc. – The Company's History in short

DELL Inc. is a computer technology company with their headquarters in Round Rock, Texas, USA. Today privately owned again, they are a multinational company developing, selling, repairing and supporting computers and related products and services. DELL sell directly to their customers, small to large businesses, healthcare and educational institutions, and government agencies through dedicated sales representatives, telephone-based sales, and online via their company web site.

Founded in 1984 as 'PC's Limited' and renamed then after its then 22-year old founder, Michael Dell, the company today counts as one of the world's largest technological corporations employing more than 103,300 staff worldwide (Statista Inc.,2014)

After opening their first subsidiary in 1987 in UK the company went public in 1988. 1990 DELL were the first in selling through retail stores like CompUSA, Best Buy and WalMart but quickly withdrew again after they determined the model did not meet their financial objectives. In 1992 27-year old Michael Dell was the youngest CEO of a company ranked in Fortune magazine's list of the top 500 corporations. In 1994 the launch of the Latitude XP with a record-breaking battery life brought breath-taking success. The same year they launched operations in Asia-Pacific. 1996 their announcement that their daily internet sales reached $1m revolutionized the market. By 1998 daily internet sales topped $12m and in 1999 DELL opened an integrated sales, manufacturing and support centre in China. By the year 2000 within 15 years in business Michael Dell became the 9^th richest man in the world. In 2003 Michael Dell steps back as CEO to return in 2007 to face the company's crisis. To regain the company's flexibility Michael Dell completed in 2013 the largest corporate privatization in history. Together with 'Silver Lake Partners' and 'Microsoft' he bought his own company back for 25bn.

Being listed number 51 (Fortune.com,2014) in the Fortune 500 list until 2014, they are not listed anymore due to the confidential nature of its financial information after going private in 2013 (DELL-Financial News,2013) which Michael Dell called 'the world's biggest startup' (Spring,2013).

In 2014 DELL was, after Lenovo and HP, the world's third largest PC vendor (Pettey,2015). Currently DELL is the number 1 seller of PC monitors in the world (Song&Shirer,2013).

DELL maintains five production facilities worldwide, two in the USA, located in Texas and Tennessee, one in Brazil and two in Malaysia and China, the factory in Limerick, Ireland was closed 2010 and they manufacture most of the products they sell. About two-thirds of their revenue is generated in the Americas, 22% originating in Europe, the Middle East, and Africa and about 11% coming from the Asia-Pacific region.

Current Marketing Strategies

Until 2013 'The Soul of DELL' (DELL UK,2015a)(DELL ZA,2015b) defined their mission to be the most successful computer company in the world at delivering the best customer experience in markets we serve"

and their vision [...] to create a better world for all [...] an image of the future we seek to create, the way we interpret the world around us – our customer needs, the future of technology, and the global business climate.

DELL's tagline 'The power to do more' signalises that they 'enable innovation, embrace potential and find solutions. Dell empowers countries, communities, customers and people everywhere to use technology to realize their dreams.' (DELL,n.d.)

 

2013 DELL introduced the 'DELL 2020 Legacy of Good Plan' extensively outlining the '10x20-Goal' which is, as Michael Dell expressed it '[…] about capturing the innovative ways our customers are using Dell technology to do good in the world' (DELL,2013).

Target market

DELL's success builds on direct sales and their build-to-order strategy for producing and selling PCs. Originally targeting individual PC-users they, by the end of the 1980's, evolved targeting the corporate market. Developing their own sales force and starting dealing with CIOs and other top executives directly, they penetrated corporate accounts that long were dominated by established IT-vendors such as HP, IBM or Compaq (2002 acquired by HP).

Dell's business model and Philosophy

The immanent advantages of their business model enabled quick growth by offering competitive prices, customised products and high levels of support.

Their sophisticated supply-chain-management-system is the key advantage of their build-to-order and direct sales model. Expensive inventory is not building up in warehouses and therefor not losing value before sold and as well new products can be introduced without the obligation to clear old inventory. Dell's inventory turnover rate of 60 times per year compares to 12-15 times for most indirect vendors. Customers at DELL often pay the final product before suppliers are paid for the parts that go into a PC, so that DELL operates on a negative cash conversion cycle. Probably most important are the benefits that Dell gains from the direct relationship to their customers.

Unlike their competitors whose channel partners often refuse to reveal who the final customer is, DELL knows the end-user, what equipment they previously bought and where it was delivered. Using that information to offer add-on products and services, DELL coordinates maintenance and technical support helping the customer plan its PC replacement and upgrade cycle. For many of their corporate customers DELL has become what they call a 'PC outsourcer', managing the customer's PC inventory, from purchase to disposition.

Market trends

DELL, ahead of its competitors, enthusiastically converted to the Internet early, creating their first web site 1994 and moving many of its activities online. They recognised that their direct model provided an advantage in selling online. DELL, unlike indirect sellers as IBM, Apple and HP, need not worry about conflicts with resellers and distributors when they started selling online. Their build-to-order manufacturing processes were already in place which made offering opportunities for the consumer to configure products online just as they already did on the phone easy.

By the early 2000s, DELL's daily internet sales went up to $50m, but not enough, DELL also developed extranets called 'Premier Pages' (now 'Premier Dell.com') using the actual Internet link to their customers. By the mid-2000s DELL had over 50,000 Premier Pages for thousands of large business customers, these being used to configure, order, service and support the customer's systems and needs. Small and medium customers could buy hard- and software online from Dell.com and receive technical support and other services through the DELL.com web sites. Probably as important is DELL's effort using the Internet to coordinate their complete value network, including suppliers, third-party-product-distributors and system integrators, logistics providers and service providers which is only possible because of the tight information linkages between DELL and its customers.

Most of DELLs revenue comes from the sales of hardware as part of e-business-solutions including high-margin items as large server and storage devices needed to support e-commerce, as well as desktops and laptops but DELL also does make money from services.

 

Looking at Ansoff's Product-Market-Expansion-Grid DELL follows a market-penetration strategy (DELL,2014). Their strategy over the long-term is to turn Dell into an IT-services company that can compete with IBM , HP or Cisco and therefore they keep targeting corporate customers with their strategy they used to dominate the PC sales market almost 20 years ago – focussing on low prices and service (Kelleher,2015).

Strategic Business Units

According to Hussey (Hussey,2002,p.45) there are several mnemonics for a SWOT analysis like TOWS, SOFT or Steiner's (Steiner,1979) WOTS UP – adding 'underlying planning'. Therefor in the following paragraphs a SWOT analysis in the form of OTSW will be undertaken.

External Environment

To evaluate external factors first DELL's opportunities and threats will be examined while using Porter's Five Forces and PEST and then internal factors, strengths and weaknesses, will be considered. Prunckun (Prunckun,2010,p.138) sees the PESTLE analysis 'as the macro scene, and SWOT is the micro perspective'.

Opportunities

Dell provides various services (infrastructure, security and cloud) and enterprise solutions (storage, servers, networking), which at present are their most profitable business. Focussingon growing these divisions is highly important as they promise better growth opportunities and higher profit margins.

DELL, to diversify, requires new technology patents and new ideas. Having not invested much in R&D facilities means to obtain these quickly they need to acquire other companies.

Emerging markets are the fastest growing markets for laptops, tablets and other electronic devices. Dell has a good presence in India, China and Brazil but should strengthen its position considering the PC industry experiencing declining market share.

The market expectance for mobile devices like tablets is growth in double digits within the next few years and the company has great opportunities due to their newly established partnership with Microsoft to grasp market share from developing new Windows devices.

Threats

Our society is 'on-the-go' and therefor the consumer demand for tablets and smartphones will further increase. Due to the lower price and strongly improved capabilities, consumers will more often choose these 'mobile solutions' over laptops. This growing demand takes a share out of DELL's laptop market and the growth rate for PCs and laptops is slowing down. Apple dominating the market for smartphones and tablets it proves hard for DELL to compete.

DELL faces strong competition in all its business areas in terms of quality and price, and furthermore in regards of reputation, distribution and their range of products.

Competition and Competitors – Porter's Five Forces

According to Michael Porter (Porter,1998,pp.3-5) the five competitive forces jointly determine the strength of industry competition and profitability. The strongest force (or forces) rules and should be the focal point of any industry analysis and resulting competitive strategy.

Porter model based on the idea that an industry's attractiveness is determined by:

• The intensity of competitive rivalry in the industry;
• The threat of potential new entrants;
• The threat of substitute products;
• The bargaining power of suppliers;
• The bargaining power of buyers.

Competitive rivalry is strong in DELL's core markets. Being the world's third largest PC vendor after HP and Lenovo (acquired IBM's PC business in 2005) and before Acer, DELL faces strong competition from various competitors. The following figure provides an overview of Porter's five forces.

DELL's Macro-Environment – PEST analysis

To analyse DELL's operational macro-environment figure 10 provides an overview of Political, Economic, Socio-Cultural and Technological factors that may influence DELL's macro-environment.

Internal Environment

Within DELL's internal environment their value chain will be analysed and their strengths and weaknesses will be examined.

DELL's Value Chain

Although DELL's value chain is very similar to the standard in the industry they developed some distinct advantages within their value chain. As mentioned before they operate on a negative cash conversion cycle. They have built a collaborative supply chain and an innovative ordering and production system which as a result
brings value from supplier to the customer and provides DELL with a competitive advantage.

Strengths

Instead of selling through retail stores DELL sells directly to corporate and individual customers, keeping the thin profit margin to themselves.

DELL's individual product customization services add great value to the customers providing a sustainable competitive advantage as similar services are not offered by many competitors.

Beneficial for business with public and government agencies is DELL's well known and respected brand reputation for quality products and their standing ethical standards being know two years in a row nominated to be one of the 'World's most ethical companies' (Ethisphere® Institute,2015). Further advantage is their involvement in many green initiatives having received many awards for being an eco-friendly business.

Over the last years DELL has spent billions for successful mergers and acquisitions, which brought new capabilities and assets, new patents and skills for the company.

Weaknesses

Although the major proportion of DELL's revenue comes from the corporate high-margin server market their income from commodities (PCs, laptops) is small as these products are sold with a rather low profit margin.

DELL's customer service, once praised, subsided due to outsourced offshore call centers. They already invested large amounts in regaining their reputation for service, but they have not yet reached their previous standards in this area.

Due to their low spending on R&D DELL long missed opportunities to develop product lines for the tablet and mobile market and therefor as well is late on the market for mobile services. Their weak portfolio of patents hampered their ability to compete in the lucrative market for smartphones and tablets.

Selling products online and allowing product customization may be cost effective but provides less visibility for the products as many consumers want to touch and see a product before they buy.

DELL's cost leadership strategy providing competitive advantage became increasingly challenging on today's market being only little differentiated from competitors' products and considering the increasing Asian presence on the markets. DELL are even in competitive disadvantage if competitor's prices are lower.

Business Portfolio Analysis

Using the Boston-Consulting-Group-Analysis (Team FME,2013) DELL can be considered a 'cash cow'. DELL, with a high relative market share ranking third worldwide after Lenovo and HP (Statista Inc.,2015) and competing in a low growth industry – global PC shipments in the first quarter of 2015 the first time since 2009 fell below 75 million units (Statista Inc.,2015). Examining the matrix below and based on DELL's position, product development and/or diversification are strategies that they could adopt.

Porter's Generic Strategies

Looking at Porter's Generic Strategies DELL follows a cost leadership strategy – best value for the best price. They achieve to increase their market share through charging lower prices while still being profitable because of their effective direct sales model.

Except of Apple – their customers are considered less price sensitive – the majority of competitors on the market as HP and Lenovo follow cost leadership strategy. Differentiating is difficult on this market as PC standards have been set and determined long time.

While customers are primarily interested in products with low prices the quality still is extremely important. Mobile products, smartphones and tablets, will make it more important for DELL to begin to differentiate as these may be considered by many people as substitute products.

DELL's Balance between Demand and Supply

Their sophisticated supply-chain-system kept DELL always a step ahead of their competitors. Their ability to alter pricing and product mixes in real-time gave them a clear competitive advantage for long. For example if they were short of 17-inch-screens they offered 19-inch-screens at a lower or even the same price. Their competitors, relying on their retail channels cannot manage demand like this.

The PC industry in general is in the declining stage as showed in figure 14. Applying this on DELL they had a short introduction phase with an enormous demand, to have a long growth phase reaching their maturity in the early 2000's and started declining since the mid 2000's. In 2015's first quarter global PC shipments are the lowest in the past six years (Statista Inc.,2015).

In the declining phase DELL reduced costs, closed factories and outsourced staff to be in the position to offer their products for a lower price while still harvesting and expanding on the enterprise market. They also focussed on emerging markets like China and India which still have huge growth rates (Prasad,2011). While desktop and laptop sales are decreasing DELL jumped into the tablet market by offering several hybrid laptop/tablet solutions to adapt to the changing demand and partnering with Microsoft the market will soon see some exciting Windows 10 tablet products on the market.

To meet the market requirements DELL as well spent several billion acquiring businesses on the market. At the moment they are in talks to acquire the storage giant EMC, as are Lenovo and HP (McDougall,2014). Whoever may win would gain an important advantage on the market.

DELL's Marketing Mix

At DELL marketing their products is about offering tangible and intangible benefits to their customer's changing requirements. DELL provides a large variety of products, in many cases customised to the individual customer's needs and demands, for small, medium and large customers, corporate and private. Their product range starts from handheld devices to tablets, laptops and desktops, and large server solutions which are their major business.

DELL's pricing strategies change depending on the product's life-cycle, while their main objective is to provide the best product for the best price. This reflects as well in the customisation process that DELL offers. The customer, depending on needs, demands and affordability can configure the product which is then priced accordingly. To continuously gain market share DELL undercuts competitor's prices as possible.

DELL's focus on the internet as a direct sales channel is maximising the profit margins and keeping the prices low. In the emerging markets China (Einhorn,et al.,2013) and India (Prasad,2011) DELL is selling through their own retail-outlets and are constantly increasing numbers by building a franchise network.

Until the late 1990's marketing communication at DELL was not very strong. Since the early 2000's DELL market their products through TV-advertisements and through the Internet. Promotions through retailers like BestBuy, WalMart, Tesco and Carrefour improved brand awareness although quickly withdrawn again.

DELL's Sales Strategy – 'In it to win it'

Since the foundation of the company their direct-sales model provided a sustained competitive advantage. At one point they started prioritizing their server business over PCs as profit margins looked much better. PCs is a large volume business today, and as Jeff Clarke, DELL's vice chairman said they are 'in it to win it' (Moorhead,2013).

Their growth plan focusses on:

• Simplifying services and products
• Attract new customers
• Win with industry-leading end-user-computing-solutions
• Scale alternative computing solutions

Their configure-to-order customisation process led to a wait-time from order placement to shipment of 7-10 days. They changed this to a so called 'Smart Selection' – built-to-order – model which means they pre-build what they believe to be the most popular configurations and reduced the shipping time to 24 hours.

With their new tablet solutions covering the 7-8" (iPad mini) and 10" inch they challenge Apple and with several hybrid solutions in 11", 12" and 13" size they target tablet users that want full laptop functionality. Apple had the enormous advantage that there was no alternative and therefor even enterprises deployed iPads despite the, for enterprise purposes incompatible, iOS but with Windows 10 in front of the door DELL will take the opportunity to shine with a full range of Windows tablets.

By targeting the cloud-client computing business they look into the real big volume business. While for the 'normal' customer not looking as attractive as a new DELL XPS 11, it may be DELL's cloud-client high-margin corporate computing business that could drive long-term growth.

In order to pay for all these investments DELL's decision to go private was important because that enabled necessary cash flow, providing more flexibility and finally this is a long-term decision that will pay out. HP and Lenovo need to be prepared for a strong competition.

Conclusion

DELL quickly became incredible successful in its early years growing within short time from a start-up into one of the market leaders. Their business model and philosophy, and their sophisticated supply-chain-management-system enabled them for a long time to sustain their competitive advantage by providing low price products while still delivering high quality. This brand image is still alive although the company had hard years in the mid 2000's. Competition is getting stronger and profit margins smaller. While Apple grew quickly with their high-prized iPods, iPhones and iPads and the related services, DELL missed the point to jump on that train and still relied on desktop, laptop and server business.

Considering the decline of the PC industry they finally made the right choice to expand their product palette with exactly these devices while still expanding on corporate business. The decision to take the company private again at a perfect time, shares were incredibly low, brought them the necessary flexibility to operate without the restrictions of a public company.

For many years the strategy of not providing 'all things to all people', their strong market segmentation and specialization, brought the lasting success. Based on market research they were able to formulate their action plan which ultimately became DELL's brand repositioning and the 'Power to do more' campaign.

Finally the decision to generally stick to their direct model, but with modifications of pre-built configurations but to enter the emerging markets China and India with thousands of own retail stores was the right choice.

Since the share price cannot be a metric for success anymore DELL monitoring the global sales trends and their share of this became as essential as the obligation of constantly assessing the 'voice of the customer'. For corporate customers this may be easy through dedicated sales and service representatives but for PC consumers they closely need to monitor product and customer service reviews on dedicated portals and on their own web clients.
 

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Michael Dell's Leadership Style

Executive Summary

This paper provides a review of Michael Dell's book 'Direct from DELL' from 1999. The first part of this paper will attempt to give a short summary of the book while in the main part Michael Dell's leadership style, his traits, characteristics and behaviours will be analysed. The final part undertakes to critically analyse Michael Dell taking relevant literature into account and also addressing how well the author of this paper would enjoy working for, or with Michael Dell.

Michael Dell in 1984, then 19 years old, founded 'PC's Limited', later renamed to DELL Inc., which is an American privately owned multinational computer technology company with its headquarter in Round Rock, Texas, USA, that develops, sells, repairs and supports computers and related products and services. DELL Inc. today is one of the largest technological corporations in the world, employing more than 103,300 people worldwide (Statista Inc., 2014). In 1992 27-year old Michael Dell was the youngest CEO of a company ranked in Fortune magazine's list of the top 500 corporations. In 2014 DELL Inc., after Lenovo and HP, was the third largest PC vendor in the world (Pettey, 2015).

In the years since then Michael Dell received a lot of praise from all business areas. Fortune magazine (Schonfeld, 1998) named him "the poster boy of the new economy" and Joseph Pine (Pine, 2007) called him "the Henry Ford of Mass Customization". Michael Dell is a typical self-made man. Dropping out of college he started his business with nothing. Hard working he became a successful business man and developed from a shy young man to one of the most charismatic leaders that we can think of. His entrepreneurial spirit, similar to people like Sam Walton or Steve Jobs, and his strong vision paired with his ability to inspire others paved the road to his success.

Within sixteen years in business Michael Dell became the 9^th richest man in the world in 2000. Although in 2015, he just turned 50, he is 'only' listed number 47 in Forbes' "The World's Billionaires" (Forbes, 2015) there can still expected to be seen much from him on the international business stage.

Direct from Dell

Organised in two parts 'Direct from DELL' recounts the early life of Michael Dell and the rise of DELL Computer in part one to continue in part two by concentrating on Dell's approach to management, developing customer focus and creating strategic alliances.

Michael Dell's Personal Life and the Growth of DELL

Michael Saul Dell, born on February 23rd, 1965 into a Jewish family, early had an interest in technology. His mother being a stockbroker, dinner table discussions often were about "[…] inflation rate, the oil crisis, which companies to invest in, and which stocks to sell and buy" (Dell,1999,pp.3-4) leading little Michael developing a flair for business.

"I've been fascinated with the idea of eliminating unnecessary steps" (Dell,1999,p.xvi) Dell commented on his attempt to get a high-school degree by 'passing one simple test' at the age of eight. At twelve he made $2,000 from selling stamps leaving out the middleman. His technical interest led his parents buy him a computer which he immediately took apart to "know how it worked" (Dell,1999,p.7). A summer job, selling newspaper subscriptions to newly married couples whose details he obtained from Houston surrounding courthouses, made him $18,000, more than his teacher's yearly salary and gained him first experiences on what he later came to know as 'market segmentation' and what became "one of DELL's most significant strategies for success" (Dell,1999,p.5).

Dropping out of Med School in 1984, Dell founded his first company 'PC's Limited' which he soon incorporated as 'Dell Computer Corporation' and employed Jay Bell, the engineer who built DELL's first PC. The same year they made $6m in sales. By 1986 sales hit $60m and DELL was first to introduce a '30-day-money-back guarantee'. In 1987 they had their first subsidiary in UK. 1988 the company went public, bringing the market capitalization to $85m. DELL were first in selling through retail stores like CompUSA, Best Buy and WalMart but quickly withdraw after determine the model did not meet financial objectives. "The more mistakes I made, the faster I learned" (Dell,1999,p.17) Dell said. Sales grew quickly reaching $2bn by 1993. The launch of their Latitude Notebook with lithium-ion-double-life batteries and the start of their server business were further steps towards becoming the market leader. 1998, Dell made revolutionary $12m a day just from internet sales, he expanded 'Premier Pages', a tailored web-link for customers and established web-based connections with suppliers. By the time Michael Dell wrote this book, an integrated sales, manufacturing, and support center was opened China.

Michael Dell's Management Approach

Early Michael Dell had the clear goal to build better computers than IBM. He asked the right questions 'Where are we today', 'Where and what do we want to be', 'What opportunities can take us there' and 'How can we take advantage of them' at the right time and yet found the right answers. He had an idea of his future business model of selling direct, eliminating the re-seller mark-up and pass the savings to the customer.

His willingness to make mistakes, learn from them and to draw the right consequences taught him to figure out the right strategies to achieve his and the company's goals. Hire the right people and allow them to grow and develop, talking to employees as they know the customer and the products, the challenges and the threats, are key values at DELL. "Build a company of owners" is the heading of chapter nine in the book.

The early integration of the internet as a sales channel, close relationships with their suppliers, disdaining inventory and the courage to try new things, staying "alert so that by the time our competitors have moved to where we were, we're already somewhere else […] strategically positioned for even greater success" (Dell,1999,p.209) brought inconceivable success for Dell.

What is Leadership ?

To analyse and evaluate Michael Dell's leadership style, his traits, characteristics and behaviours, different leadership styles need to be examined and questions need to be considered:

• What makes a leader a leader
• Are leaders born as leaders
• If they are not born leaders, they become leaders or were made leaders.
• And, did they actively decide to become leaders?

Leadership Styles

From Napoleon and Nelson Mandela, to Caesar and Martin Luther King, there may be as many styles to lead as there are leaders.

Lewins Leaderships Styles

In 1939 three main leadership styles were identified by the German Psychologist Kurt Lewin (Team FME,2015,pp.33-36):

• Autocratic
  The leader informs what must be done. Most or all decisions are made by the leader without involvement of employees
• Democratic
  Some decision-making powers are given to employees while the final decision is still made by the leader.
• Laissez-faire or delegative
  This being a rather relaxed leadership style, almost all decision-making-control is given to staff. While granting independence this may only work on employees that are also responsible for maintaining control of their work and at a particular skill-level, where they do not need a push from superiors.

The Blake-Mouton Leadership Grid

According to Blake and Mouton (Team FME,2015,pp.10-13) and their leadership model (1964), the best style to lead is the 'Team-Management-Style – High- Production/High-People'. Understanding the organization's purpose and the employee's commitment to the organization's success leads to high satisfaction and motivation and therefor to high results.

Figure 1 - The Blake-Mouton Leadership Grid (Cobbe,2014)

Goleman's Six Emotional Leadership Styles

In their book 'Primal Leadership' Goleman, Boyatzis, and McKee (Goleman,et al.,2001) described six distinct emotional leadership styles.

While two of their styles – 'Coercive' and 'Pacesetting' – can create tension and therefore should only be used carefully in specific situations, the other four styles – 'Authoritative', 'Coaching', 'Affiliative' and 'Democratic' – have the positive outcome of promoting harmony.

According to Goleman (Goleman,et al.,2001) the six styles should be used interchangeably, adapting to the specific situation and the needs of the people that have to be handled.
    
   

Figure 2 - Goleman's Leadership Styles (Goleman,2000)

The Hersey-Blanchard Situational Leadership Theory

The Hersey-Blanchard Situational Leadership Theory (Team FME,2015,p.25), firstly published in 1969, elaborates that, depending on the maturity of the team members, different styles need to be used. Arguing that a more directing approach should be used while working with immature employees and with a growing maturity of the people a more participative, delegating style is adequate. As there are no teams, and team members, that are created equal they argue that leaders are more effective when their leadership is based on the groups or individuals they are leading.

Figure 3 - Hersey-Blanchard Situational Leadership Theory (Team FME,2015,p.25)

Transformational Leadership

In 1978 McGregor Burns established the idea of transformational leadership which was further developed by Bernard Bass in 1985. The four components of their model are sometimes referred to as the four I's:

• Idealized Influence – Leading by example; while the leader is considered as a role model, he therefor is admired
• Inspirational Motivation – Leading by inspiring and motivating employees
• Individualized Consideration – Leading by demonstrating genuine concern for the individual needs of employees.
• Intellectual Stimulation – Leading by requiring innovation and creativeness

Combining the first two constitutes the leader's individual 'charisma'. Although transformational leaders are often wrongly considered as being 'soft' they actually constantly challenge their employees to thrive for higher performance.

Finally, there is no one truth, as Goleman (Goleman,2000) said "The best leaders don't know just one style of leadership – they are skilled at several, and have the flexibility to switch between styles as the circumstances dictate."

However, no business can survive over the long-term without the ability to re-invent itself. As Heraclitus expressed more than 2500 years ago "Change is the only constant in life" (Mark,2010), therefore the ultimate test for leaders regardless of leading style may be the ability of guiding or leading 'change'.

Leading Change

One of the ideas of how to organise change come from afore mentioned Kurt Lewin. In 1947 he published his three step model known as "Unfreeze – Change – Refreeze".

In short, these phases are:

1. Prepare for change,
2. Change or transition,
3. Re-establish once change is completed.

It was John Kotter who in 1995 systematically explained eight steps how to 'organise' change.

And as with leadership styles there are several models, concepts and ideas in literature about how to lead change. Finally it is all about successfully leading change and therefore there is again not the one and only truth. In the following we look at how Michael Dell has led, leads and managed to lead change.

Analysis of Michael Dell's Traits, Characteristics and Behaviours

When Michael Dell dropped out of Medical School his management experience was rather limited. He said "there were […] no classes on learning how to start and run a business in my high school […]" (Dell,1999,p.17) but as his business grew quickly these skills became essential. That time, Dell was brave enough to seek for help. Early in the company's history (1986), Lee Walker, a venture capitalist and consultant, joined Dell and established a mentoring relationship with him. It was Walker who encouraged Dell to overcome his shyness and reluctance to take up a public role. Dell was not born with a charismatic personality like some other CEOs of rival companies, Oracle's Lawrence Ellison or IBM's Michael Armstrong. According to Thompson (Thompson&Strickland,1997) in the company's early days;

Michael Dell was said to hang around mostly with the company's engineers. He was so shy that some employees thought he was stuck up because he never talked to them. But people who worked with him closely described him as a likable young man who was slow to warm up to strangers.

Michael at that time shied away from media, hence not much is known except from his employees who all praise him and his tactics. What people like and respect about Dell is his honesty and integrity.

Walker brought two high-profile executives to the director's board, George Kozmetsky, cofounder of Teledyne, and Bobby Ray Inman, former chairman, president, and chief executive of Westmark Systems. Both executives provided Dell with sound advice. Sun Microsystems' Thomas Meredith joined as CFO in 1992 and Apple's John Medica 1993. The Latitude XP, a milestone on the lLaptop computer market, was Medica's success. In 1994 Motorola's Morton Topfer followed as vice-chairman. Seeking counsel and sharing responsibilities should prove essential for Dell on the way to success.

Michael Dell is neither a born leader nor a management professional. He never studied leadership or management. His way in doing business was learning by doing. Chapter three in his book is 'Learning the hard way' (Dell,1999,p.35). He was keen enough to make mistakes and take lessons learnt as the hard way to learn.

An early mistake Dell's created a massive excess parts inventory but finally led him to establish the sophisticated supply chain management system they have today. Two more happened in 1990 when they developed their 'Olympic' computer that was technologically much too oversized for the average customer at that time and tried to enter the retail market.

Ironically all these mistakes contradicted Dell's original ideas: manage inventory, listen to customers, leave out the middleman, sell direct. But as his success shows, he learnt from these mistakes.

It was not only Walker's mentorship that made Dell a public speaker. He is well known for speaking in a quiet, reflective manner, motivating people by his charisma and positive aggressiveness.

Michael Dell's successful leadership can be seen as result of four major strengths:

• His powerful vision of the future and unique business philosophy
• He is a hard worker with a clear goal and focus on it
• His strong sense for innovation
• His understanding of responsibilities and the importance of work-life-balance

Dell led the company for almost 20 years as CEO and was well known amongst his staff for making other people feel important and appreciated, providing a vision and inspiration for the future but also for demanding from his people not less as he himself is willing and able to give. After he decided to step back in 2003 Kevin Rollins took over his post as CEO. Although he was brought on board by Michael and he still describes him as a "great business partner and friend" (Lohr,2007) and his contributions over the years are looked upon with great respect, he was not able to fulfil Michael Dell's role. Rollins was seen as the foremost practitioner and advocate of the Dell model, even when pushing the same buttons no longer worked subsequently in 2007 the director's board of DELL agreed that Michael Dell is required to re-take the position as CEO.

Michael Dell and his Leadership Style

Analysing Dell's leadership shows changes in the way he leads and has led. In his early life he was autocratic and it was him to make the decisions. He became participative when he started sharing management and reaching out to hire high-profile managers. He had a unique approach to leadership when he and Rollins led DELL together, both in the position as CEOs. When he introduced the leadership board in 2007 he showed again his willingness to share power and seek other people's advice.

I've always tried to surround myself with the best talent I could find. When you're the leader of a company, be it large or small, you can't do everything yourself. The more talented people you have to help you, the better off you and the company will be. (Dell,1999)

It occurs that the way Dell changed his style to fit the circumstances is a situational leadership style. However, his influence on people more results from his characteristics than from his leadership style. Similarly to Steve Jobs in his early years, who was nervous, nerdy and almost appeared to be clumsy, they both grew with their responsibilities and both became not only charismatic persons but finally became great leader through their charisma. All that points more to a transformational leadership style. It is his characteristics that resulted in people giving him credibility, trust and confidence. DELL staff developed a sense of loyalty that goes beyond what an average leader gets back from his employees. The trusting and open climate he created by helping and empowering others so be successful, by encouraging them to do more is the result of his idea of creating a "Company of Owners".

Michael Dell not only provides his people with inspiration and requires them to be inspirational, he too shows ethical behaviour founding the 'Michael & Susan Dell Foundation' to improve the health and education of children worldwide. DELL was recognized in 2014 and 2015 as one of the World's Most Ethical Company by the Ethisphere Institute (Ethisphere Institute,2015).

Michael Dell Leading Change

Paul D. Bell, senior vice president at DELL said on Dell's return as CEO: "It's not all about Michael versus someone else before, Michael was here. He was chairman. But it was up to Michael to take the first-mover role in driving change and he did it" (Lohr,2007). Since Dell is back he repeatedly emphasized that the Dell model "is not a religion" and he, who was once known as a man by-the-numbers, a short-term-thinker, seems now to be planning many years ahead. He changed his way by introducing a new leadership board. He delegated power and shared decision making. Since then Dell introduced a lot of changes. David Yoffie from Harvard Business School (Lohr,2007) said: "This is going to be about changing the way they do business at many levels." Dell stepped beyond his selling-direct-model and again forged retail agreements with WalMart, Carphone Warehouse and even Tesco. He started acquiring business, Alienware, ACS, EqualLogic and Perot Systems to name just few. With the acquisition of Zing Systems they finally stepped into the section of hand-held-devices. Though more than 80 percent of its sales is from corporate customers Dell accepted that they need to focus more on the consumer market to stay on top. In point of marketing they came up with a new slogan: "One Company, One Brand, One Beat" giving the brand a makeover. "Hey, we've got a lot of work to do and we're just getting started", Steve Lohr (Lohr,2007) from the New York Times quotes Dell. And he got started.
  

The company's core business always was server solutions, PC business being called dead from several sides, DELL focussed on getting into the mobile and tablet market. Given the strong presence of Apple's iPad and Samsung's Galaxy that failed in 2011. DELL faced an enormous process of change in the past seven years shifting his strategy away from low-margin PCs towards higher-margin systems and services for corporate customers.

"At DELL, we never talk about 'managing change' or 'dealing with change' because change is all we've ever known. […] change promotes growth" said Michael Dell (Dell,1999,p.214). However, he emphasized that planning for and communicating clearly opportunities is the way to encourage employees to embrace change without fear "There's no risk in preserving the status-quo, but there's no profit, either" (Dell,1999,p.222).

In 2013 Dell, shortly before the 30^th birthday of DELL Inc., completed the largest corporate privatization in history. "You can't keep doing the same thing and expect it to keep working. We had to do something different." (Foster,2014)

Michael Dell is not only open for change, he knows how to plan and communicate for it. "Dell went public because the company needed capital" (Dell,2015). Without dividends and buybacks, he will have increased cash-flow and without the public markets to worry about, he has much more flexibility.

Michael Dell – An Enjoyable Leader to Work With ?

Assuming most people would enjoy working for or with inspirational people the author clearly has to say that Michael Dell would be a much appreciated person to work with.

Inspirational leaders have a few things in common. Michael Dell called these the three P's: the passion, the problem and the purpose (Dell,2014).

People like Dell are visionary, they have an idea, a vision and follow it through. As he said "Mobilize your people around a common goal. Help them to feel a part of something genuine, special and, important, and you'll inspire real passion and loyalty" (Dell,1999,p.119). Leaders like Dell care about people. They agree with Bill Gates that the fortunate few have an obligation to help those who are less fortunate. They treasure their beliefs. They don't wear their values on their sleeves, but their deeply held convictions pervade everything they say and do.

General Joe Dunford, the leader of NATO's coalition in Afghanistan expressed "Surround yourself with good people" (Dunford,2014) as the first rule to success. That is what Michael Dell did, he not only shared his power and reached out for advice to people who may know better, he too spread the credit by redirecting praise toward everyone else on the team. Leaders like him also promote learning opportunities "Make failure acceptable as long as it creates learning opportunities" (Dell,1999,p.136) as he learnt business himself the hard way.

Michael Dell always tried to stay close to his people: "Connecting with your people – your most valuable asset – is the way to keep your business and your people healthy and strong" (Dell,1999,p.119). He always does this by 'roaming around', "I don't want my interactions planned; […] I want to hear spontaneous remarks" (Dell,1999,p.117). Leaders like Dell always feel an obligation to 'give back'. Their long-term plans include pro bono work or endowing a charity.

Leaders like Dell believe that success serves a higher purpose, they talk about making other people successful. Michael Dell's idea of creating a "Company of Owners" is a very inspiring one. Most people go to work for the money but we all dream of a job and a workplace where we enjoy to go. Liz Ryan, CEO and founder of 'Human Workplace', formulated: "Your job is to do your best work every day. Your boss's job is to give you a reason to come to work tomorrow." (Ryan,2013)

It is people, leaders like Michael Dell who make every day worth to come to work, who make you feel appreciated and make your work enjoyable.

 

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