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Management : Dell - Case Study Example

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Date: Management Case Study: Dell Introduction Dell registered twelve years of profit making since 1993. From the year 2005, the corporation faced several challenges that led to great decline in its sales as well as profits…
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Management Case Study: Dell
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"Management : Dell"

Download file to see previous pages Internal issues in the corporation affect its management, quality of products, and services of the corporation and brands of dell available. External issues deal with stiff competition from PC manufacturers. These challenges have drawn attention to Dell’s management team to deliver viable solutions so that it remains in the market of PC manufacture. The management has developed several solutions to tackle its challenges. Challenges Internal issues faced by the corporation are as follows: I. Management: Resignation by Dell’s CEO, Michael Dell in July 2004 and taking over of the corporation by Kevin Rollins created a negative impact. Slowed growth was recorded. The company was characterized by poor customer services. Poor planning resulted from lack of estimates by analysts. A recall of four million laptops that had complications with Sony-made batteries among other cases made most customers lost confidence in the company’s products. II. Bad leadership: Accounting practices of the company failed to meet the targets of the firm. Financial analysts added more woes by cutting prices for products which were of poor quality. Public critics forced the company to relocate to India in 2001 although it returned to US in 2004. III. Consumer Behavior Consumer behavior has continuously changed. Despite the change, Dell stuck to its old practices of selling PCs. The Direct Model created a limited supply chain. Orders are taken from end-users online. However, consumer behavior has changed because they demand to see the products before purchasing, as well as being provided with recommendations from retailers in stores. Dell entered retail channels in 1990 but sales were slow and contributed to Dell’s financial losses in 1993. When Michael Dell returned as CEO, he decided that the company would sell the products directly to the end-customers. Dell did not widely supply their machines through retailers until the year 2007 when they introduced two laptop models in more than 3,000 Wal-Mart stores across the US (Ogg). External Issues As for external issues, the main one is the rise of viable competitors in the PC market. The emergence of viable competitors is one of the main external challenges faced by Dell. IBM sold its PC division to Lenovo, a China-based company. Later, Hewlett Packard merged with Compaq, which is known for their IBM clones. Acer, a rising Taiwan company bought the declining Gateway to enter the US market share. All of this was happening at the same time as Apple’s resurgence in the consumer PC market. These companies offered more advanced products and with more to offer consumers in the field of personal computers compared to Dell. In addition, a maturing PC market industry led the PC industry to reach its saturation point in the US, as well as in several parts of Europe and Japan in the early to mid 2000s. This left the company with little room to grow and caused stagnation to set in, especially in terms of introducing new models of PCs or other hardware to the market. The purpose of this paper is to identify and analyze the possible steps to revitalize the company. Possible solutions towards the challenges discussed aim at restoring Dell’s face in the market of PCs. Solutions 1. Strengthening the corporate governance within Dell Inc. Dell is known for its core values statement “The Soul of Dell” in which the employees share the company’s value. The CEO, Michael Dell made the company’s top management accessible to the lower-level employees in nurturing innovation ideas ...Download file to see next pagesRead More
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