Michael is not very good for preventing future

It is the story of a boy from Texas who dismounts computers to fifteen years, monte business in eighteen and became billionaire before thirty. The story of a company meteorite from zero to 60 billion dollars in revenues and employed 80,000 in just over twenty years by growth only internal. It is the story of a dream as only America can produce and casts in the face of the world the power of a country, a man and a capable company in two decades to create an industrial empire of a dozen plants on three continents, half in the United States. Evidence of inventiveness and the vitality of American industry.

In deciding to transfer all of its facilities, probably to Asian subcontractors, Dell breaks this dream. The exceptional success of this company, in all schools of management of the world, is indeed the originality of its economic model. It is based on three strong pillars: direct sales to distance, to avoid intermediaries; manufacturing demand, to reduce inventories, and the obsession of the economy, lowering operating costs. Impeccably implementation with an outstanding industrial device, this innovation has enabled Dell to earn money in the sale of personal computers or substantially all of its competitors lost.

The well-oiled machine was perfectly adapted to the sale in large quantities to customers of PC and standard, all in the format Windows servers. During twenty years, Dell has refined its factories, leaving its partners Microsoft for software and Intel chips, care to continually improve the product. Investment spent in factories and especially logistics, not in the product. Reverse of the rest of American industry, Dell externalisait research and internalisait production.

But times have changed. For several years, the PC market, traditionally made by professionals, has moved to the general public through the rise and the decline in prices of laptops, which now represent half of the personal computing market. More complex to manufacture (miniaturization), these machines are difficult to manufacture to the application. This is the reason for which all manufacturers around the world, including Dell, are assembling in giant factories to Taiwanese subcontractors. These, with their units in mainland China, produce more than 80 of mobile phones sold worldwide under the brand HP, Dell, Acer and other. At them two, Compal, Dell, and Quanta provider strangers out nearly 70 million per year, or almost half of the market. And volumes increased by 20 per year.

Taken on its head by this evolution of the market strengthened by the economic crisis, which cut it budgets of companies, Dell sees its model to collapse under his eyes. As the principle of selling direct, if paid, is not suitable for a sale to the general public. The average consumer wants to touch, compare, talk to a vendor, gives impulses, and thus prefers to stores. Direct sale places of good routing infrastructures (position, roads...) and is therefore less suitable for emerging countries such as China or the India. Suddenly, the constructor has gradually kicked knife was its difference from all his colleagues, and profitability, launching in the big sale.

Interviewed in 1997 on what should be done to save Apple so very sick, Michael Dell had this unfortunate word: "Should close and return the money to shareholders." Ten years later, back at the controls, Steve Jobs did not breach of nose the imprudent when his company saw its market capitalization exceeding that of Dell. "Michael is not very good for preventing future." "The stock market goes and comes but what is happening today deserves reflection", he wrote in an e-mail to employees.

Include at least two runways of queries. First, is innovation focused on the economic model more fragile than the product-oriented innovation In other words, it is Apple, which has no plant but invests heavily in research, better armed Dell, which has made the choice to reverse Course, the conditions played a major role in the disappointment of Dell, and if the market returns tomorrow, it will be perhaps good fortune and Apple the path of the difficulties. But one cannot help thinking that one that sells only one product is difficult to anticipate developments in the market if it is merely to be an effective Distributor. Outsource its search, it is outsourcing much of its future.

The other reflection joined it. In a world changing that high technology where a short product risk being replaced by a newcomer as soon as he became mature, have a heavy industrial machine appears more like a ball. Certainly it is an effective protection against new competitors, but it consumes more in addition to financial resources, which will not go to innovation, and it is often inappropriate to a rapid rotation of products. The specialization of tasks, which made the success of Taiwan, as the industrial base, and that of the India software, has demonstrated its effectiveness, because it pools the means of production for multiple clients. This is the reason for which all the American giants of the sector is there are converted, preferring to focus on the design and sale of the product. The only holdouts are manufacturers of chipsets such as Intel or Texas Instrument with factories in several billion dollars. But in this sector also appear without factory as Qualcomm actors, focused solely on research and marketing, and which are manufactured in Asia. These new players are currently progressing faster than their competitors.

It is obviously regrettable this movement of deindustrialization that affects both European American business, but can also be said that Apple would have never passed his return on stage without this new global organization that provides innovative youth of their place in the Sun and therefore renew the fabric breaking the barriers to entry. In high-tech, it is essential. Do not rely on IBM or Microsoft to give rise to the Google of tomorrow. Globalization also it is: the revenge of the product on the plant, the consumer to the producer.