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The case study of michael dell


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Published in: Technology, Business

The case study of michael dell

  1. 1. 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.
  2. 2. 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 HP 7% Others 48% Dell 11% Apple 4% Gateway 6% IBM 7% Compoq 13% This isFor The Year 2000 NEC 4%
  3. 3. Stake in PC Industry HP 15% Others 41% Dell 17% Acer 5% Gateway 6% Samsung 1% Toshiba 3% Asus 4% Lenova 4% Apple 4% This is For The Year 2005 Stake in PC Industry Others 26% HP 17% Gateway 1% Samsung 3% Toshiba 4% Asus Lenova 9% Apple 11% Dell 12% Acer 11% 6% 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.
  4. 4. Situation Analysis 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 . AlternativeSolutions Rebrand Itself The Innovation in PC industry Take care of customers Don’t Abandon Devices Evaluation Of Alternative Solution
  5. 5.  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
  6. 6. 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.