The genius of Michael Dell
Michael Dell is the longest serving CEO of the computer industry having headed the founding company Dell Computer Corporation ever since its inception in 1987. He is one of the most successful American businessmen like Steve jobs of Apple and Rod Canion of Compaq who came into prominence riding the computer boom of the late eighties and early nineties. But what makes him unique is his ability to stay with the company that he had formed quite unlike his compatriots who had been separated from their founding companies. This maverick entrepreneur is also a philanthropist and an author.
Computers have attracted Michael ever since his childhood and he was hooked to his Apple IIe much to the dislike of his parents who preferred to see him become a doctor. He wanted to please his parents and after completing high school in 1983 did not mind enroll himself at the University of Texas. Surprisingly, while staying at the university dorm, he spent his leisure hours by upgrading outdated second hand PCs that he procured from the retailers and sold the refurbished machines from his room. His efforts met with great success and signaled that it was time for him to take a plunge into real time business beyond the campus walls.
The time was right for him as he had correctly perceived. His business efforts in selling reconditioned and upgraded PCs during the summer break fetched him $180,000 and despite furious opposition from his parents who wanted him to continue with his education and whom he had promised to go back to school if his business efforts failed, he never went back to the campus again.
The business model
Computers at that time were yet to dominate our lives. But Michael Dell, the visionary that he is, was quick to perceive that very soon computers would become a commodity- something that people would just not be able to keep away from. He understood the need to position computers in the same was as commodities and focused on price and delivery that matter most for transactions in commodities. He modeled his business based on his strength of assembling computers on his own by sourcing spares from the market and decided to reach out to the buyers directly for selling the products by using telephonic communications. This would enable him to offer lower prices by at least 15 percent as compared to any established brand. Thus the model of direct selling was born that changed the face of marketing for ever.
Path breaking approach
The direct selling model paid off and the master stroke from Michael Dell came when he decided to sell only customized computers instead of offering some standard variety in the market. He started making machines exclusively for customers needs and it was completely tailor made. This strategy worked wonders and the company sales soared phenomenally.
Despite going through an interim lean patch, the conviction and trust of Michael Dell in direct selling has made him the emperor of a computer empire with an estimated net worth of $19.5 Million for himself in 2015.