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corporate and business strategy in an international context
Finance & Accounting
Pages 4 (1004 words)
Dell Computer had established its market leadership position by implementing the direct model of selling personal computers. Dynamic capabilities are defined as flexible capabilities that can be adapted to changing industry conditions. Developing dynamic capabilities was one of the key success factors in the personal computer industry because it changed fast in terms of both technology and management.
Michael Dell emphasized upon maintaining a flexible resource base so that rivals could not match the business model. The strategic focus of Michael Dell’s business model was managing opportunities. Dynamic capabilities enabled the company to meet this objective. Michael Dell converted other resources and capabilities into a distinctive competency by focusing upon adaptation and change. The industry in which Dell operated was characterized by a constant pace of change. Therefore the management needed to focus upon developing a sustainable future by continuously improving firm competency. To this end the dynamic theory was applied. The company maintained a reconfigurable resource base so that a flexible combination of uncertainty and commitment-intensity could be made feasible. In this manner, Dell was able to maintain its market leadership. Firm performance was characterized by the direct model which was different from the business models implemented by the competitors. Although the competitors tried to implement Dell’s business model, they could not develop the same level of firm competency because Dell had already built an organizational capacity for response, reverse and contingency in this area. ...
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