Textbook Lessons for Real

I used to diss Dell business case in many of my business class textbooks. They lauded it as an "exemplary success" in many study cases published across many publishers (Pearson, John Wiley & Sons, McGraw-Hill, etc). It was 2004 then, but in 2005 they'll still say that it will be the next big thing if HP don't look out. Back then, China manufacturing corporation is not on the hype list.

It was the time when manufacturing everywhere can be "low cost." While at it, citing "low cost" by "eliminating middlemen" makes Dell have some "competitive advantage" over other competitors in term of cost and customization of the product. It is a complete bullshit lauded by many non-practicing professors and overrated scholars of the subject who probably never shop for a computer. Almost every computer can be customized, even the overpriced Alienware rig is customizable.

So, making business lessons interesting and wall-street headlines as interesting as gossip flash news. They crafted unintelligible lines such as

"Downsizing is sexy."

eeeew.... 


Cost-cutting is trendy back then. It goes as far as:


"Small is beautiful"


No, they are not talking about your hips, but the huge unemployment the article has created over the time, and in the end, reduce the overall domestic consumption, which hurts business. It argues the epitome of "flexibility" and "agility" of a company's reaction towards dynamic market condition. Being small, they are more maneuverable than their giant-sized rivals. But do they? What sort of reaction can a small company make when there is a giant meteor slams on your tiny office?


Business Analysis gotta be down-to-earth.
 
For non-lobbyist users, Dell is the worst service ever, their heavily praised "centralization" manufacturing & distribution center, and "elimination of middlemen" for the sake of cutting cost, has alienated many customers. Dell South East Asia is located in freakin Malaysia, 4th largest country in the region. Typical brilliant US entrepreneur's idea. If one's computer is broken in Vietnam or the Philippines, we ought to wait for parts from Malaysia (through Dell's representative in Vietnam) and wait for 2 freaking weeks to get it done. Acer and HP in the other hand, entrusted their local partner to handle the job and get it done in a day. Dell users, please kill your warranty already and find some cheap chop-shop technician to get it done! So, what business can wait for 2 weeks? What can kill them?

Apparently their inability to innovate is one thing that kills the "American idea on saving costs." Let's be blunt, Americans are never good at saving costs. When we tell them to save cost, they'll blame something for being too expensive and make a fuss about it.


Here is the list of what they'll most probably do when asked to save cost:

1. Fire workers or "downsize"
2. Put pressure on suppliers to reduce selling price
3. Eliminate services/functions and outsource them
4. Lobby the government for concessions

That is about how creative multi-billion dollar companies are. Even money-printing companies do the same exact thing. They'll fire people when they are pessimistic about the economy.


Ask people to do what they do best!

The solution is, not to try saving cost. The drive of American success really lies on this thing called innovation. We should have asked them to innovate. "Hey Mike! Please show me your magic on this boring-looking plastic box." And instead of him, it was Apple who did that. But even back in 2004 (6 years after Steve Jobs return to Apple), there not even a single mention of Apple there. In 2003 their iPod was already in the hype, but like most things IT, Wall Street analysts are too scared for another bubble. And college professors, academicians will naturally echoes the sentiment.


Uh-oh


Obama and his predecessors loved to blame their economic misery on low cost manipulation. Since Bush Jr. administration already done the 4th and the 3rd, Obama's political party belief simply do not allow him to use the 1st. So he used the 2nd: Put pressure on suppliers to reduce selling price. They are printing more paper money to reduce their value, and their costs in the end. Like most cost-saving measures the American tried to do in the past, this is bound to be a failure, for sure.