Dell challenges

Thèmes abordés

Dell - growth rate - PC industry - workstations - acquisition strategy

Résumé du document

Founded in 1984, Dell Corp. has achieved phenomenal growth since then, and by 2000 had topped $25 billion in sales and over $2 billion in net income. Engine of this success is Dell's Direct Model, which primary contains low costs for the manufacturing process and a direct customer relationship.

In the 4th quarter of 2000, however, the PC industry's average 30-year growth rate crashed to a negative 10%. Dell must make difficult decisions on how to sustain its profitability in light of its broad product portfolio-PCs, workstations, and servers on storage products for a broad cross section of customers in the United States and worldwide. Should it stay the course or fundamentally change strategy (try to penetrate other markets and adopt an acquisition strategy, far away from Dell habits)?

Extraits

[...] Strategy Recommendation: evolution to follow to double revenues to $60 billions In managing its growth, Dell must take advantage of the strategic opportunities available right now. The presented direct selling model of Dell is not the only factor to stay in the market and to succeed. On a global level, Dell must continue to put the stress on innovation, quality of the products and customers expectations. It allows Dell to charge a premium price and thus achieve sustainable profits. Further orientations to double revenues should also include a particular attention to the server and storage market conquest. [...]

[...] Concerning the international expansion of Dell, emerging markets must be considered, especially Japan, where the company succeeds and South Central America, the greatest market for Dell. These strategies are the most effective ways to reach total revenues of $60 billions. Conclusion: Dell is one of the largest companies of the word, active in the areas of Computers & IT for professionals and private individuals. Beginning by assessing its current business situation was a key step. Indeed, be able to examine the successes and failures of the company will allow us to take the adequate decisions in order to optimize and favour the company's growth. [...]

[...] Dell challenges . Situation analysis Founded in 1984, Dell Corp. has achieved phenomenal growth since then, and by 2000 had topped $25 billion in sales and over billion in net income. Engine of this success is Dell's Direct Model, which primary contains low costs for the manufacturing process and a direct customer relationship. In the 4th quarter of 2000, however, the PC industry's average 30-year growth rate crashed to a negative 10%. Dell must make difficult decisions on how to sustain its profitability in light of its broad product portfolio- -PCs, workstations, and servers on storage products for a broad cross section of customers in the United States and worldwide. [...]