The Case Study of Michael Dell
These case study is all about how Mr Dell the founder
member of Dell computers how he has started the work then how
Dell perform with his rivalries. When he entered into the market as
well as with some magical numbers. Then how gradually it captured
the whole market in the U.S and become the most important
player in the pc industry all over the globe. Mr Dell is a self-taught
person as he was thrown out of his university at a very young
age when he started the business. He never stick around the
university of the Texas to collect his undergraduate degree. Mr Dell
was a person who know his idea to cobble a PC at a very
cheap rate and that to sell it on a phone. The company was not
making always the right decision there were some wrong decision
taken by the company as in 1989 the company has launched the
high ended product called as “Olympic”. Which the costumerrejected
the product out of hand. The company Killed the product rather
than telling the engineers to solve the problems.
After sometime the company found that their subordinates
perceived them as cold technocrats and then they started on
making a survey after every six month name as “Tell Dell”. Dell is
the company which spends less on their Research and
Development (R&D) as compare to their rivalries H.P and IBM and
the others. It was the time that the competitors were saying that
the Dell do not make any innovation. It is so less expensive that
Dell hardly spends $500 million for a year on their R&D which is
less than 1% of the sales.
Now after capturing the pc market the Dell thought why not
get entered in the consumer electronic goods and compete the
Sony. Then they also entered into the servers and Now there is a
new great battle in printer. As printer is a installed based business.
Once a customer gets a printer he needs the case of the printer,
the cartridge, etc. you can easily make how long the customer can
buy it from you for years. Two years ago the Dell has launched
both its inkjet as well as laser printers.
Vyomesh Joshi head of printers & PC business at HP says
that Dell Succeeded in PC because it was commodifing at that
time but now the printers are not the dell is outsourcing its
printers from Lexmark, Fuji, and Kodak. Dell is a manufacture of a
every Machine is made for a specific order. As compare to the
rivalries Dell carry a very short inventory of 4 days.
This is all reflected in one eye catching statics of 1998
where the Dells revenue for per employed $745,000 to $900,000
(HP comes in at $540,000)
Some Financial things to be discussed:When Dell came into existence last 21 years ago in 1984
IBM and HP were voted no. 1 and no. 3 as at that time Dell was
not on the radar screen. Now you will notice that the Dell leads
the PC industry. And as well how they got decline after 2005.
These are some statistical representation.
Stake in PC Industry
This isFor The Year 2000
Stake in PC Industry
This is For The Year 2005
Stake in PC Industry
This is For The Year 2011
These are the some statistical description of the pc industry from
all over the globe. We can easily make how Dell has preformed
getting into the electronics , Servers , and in printer business.
The Main situation was the Dell had less of its expenditure
on R&D and as well as the Dell had started to get into entry in
consumer electronic product , in servers also they have got entered
in printers. This is the situation from where the dell got started
declining in their business they could not manage to be on top of
their position in the market. The statistical analysis is done above
and we can easily make the actual situation of Dell how problem
was going on. The decision made by the company made it wrong
like in 1989 they have launched a product called “Olympic” which
peoples did not accepted the product. Like way there were some
more issues with the company which cannot be discussed.
The Problem Identification
As in the above statistical representation we can see how
Dell got started declining in PC industry as they got entered into
the server, Printers and Electronics .
The Innovation in PC industry
Take care of customers
Don’t Abandon Devices
Evaluation Of Alternative Solution
Rebrand Itself:- The company had to focus on its corporate
branding. As the dell has spent the last few years building a
broad software, Electronic items, Printers and Servers etc.
and their service portfolio but dell has unable to shake its
reputation as a PC oriented company. Dell needs to
effectively communicate that they are more than just a low
cost solution by emphasizing the large organizations demand.
The Innovation in PC industry :-As mentioned in the case
the dell has got the competition from all the angels of the
business. The competition was not only within the traditional
PC business but also within its new software offered by the
rivalries. The company need to cohesion to its portfolio as
well as differentiate its offering in terms of not only the
product but also the pricing model.
Take Care of Costumers :- While Dell will be making
aggressive moves behind the scenes it must make sure that
the existing costumers feel confident that dell will be taking
care of their product.
Don’t Abandon Devices :- Dell has a future in its
electronic and printer business , the software and service
sector but it doesn’t mean that they should dump its
struggling PC industry. The PC industry is still profitable. It
can generate a lot of cash just making some innovation in
the existing product and can over come the issues.
The Selection of Best Alternative
According to me the best alternative is the company
should first concentrate on their first business that is the PC
making business and then they can go to other sector that is the
servers or the printers . They have to rebrand itself in such a
way that their PC industry boom once again as it was in the year
2005 the Dell was the leader to hold the stake in the PC industry.
And after overcoming this issue getting back to their place they
can move forward towards the other problem.