Sales Management (Section A)

Mid-Term Assessment: Part 2

Spring 2020-2021 Semester

Name of Student: SYED REZWANUL HAQUE ID Number: 17-34018-1

Instructions:
Read the following case carefully and then answer the attached 2 questions provided at the end of the case.

Dell
Not long ago, Dell was the PC industry darling, turning the industry upside down with its direct marketing
approach. At one point, it was the world’s leading PC maker. But in recent years, Dell has been hit hard by a
combination of factors. One is competition: HP took Dell’s “top-seller” status away by providing a better one-stop
shop for equipment and services to businesses, where Dell gets three-fourths of its sales. At the same time,
Taiwanese competitor Acer took a bite out of Dell’s low-cost advantage.
By selling cheaper machines, Acer bumped Dell out of the number-two market share spot. The final blow came

from the weak economic environment, which has made consumers and businesses more reluctant to upgrade to
newer, faster models. Dell’s PC sales fell by 13 percent in 2010, and its net profits fell by 44 percent. The
company has cut costs and is also looking to its other businesses to shore up sagging PC sales. But for the most
part, Dell appears to just be hanging on while waiting for an improved economy and a predicted powerful PC
replacement cycle to reboot the industry.

Questions to Discuss: [2 x 5 = 10 Marks]

1. What is wrong with Dell’s strategy to increase PC sales?
2. How can Dell overcome this problem, particularly as consumer frugality persists? What would you
recommend?
Answer to the Question No 1:
In few years back Dell was ranked 165th in Fortune’s “Global 500,” a list of the largest multinational corporations in the
world. Since its incorporation, it has grown steadily and become one of the largest MNEs in the world. As the market
leader, it fell from the top spot to the third place behind Hewlett Packard and Lenovo in 2012. This article seeks to detail
how it was able to achieve this initial success in the early 2000s and why it eventually declined towards the end of the
decade. This are the wrong with Dell’s strategy to increase PC sales:-
The desktop computer, which was Dell’s focus, was being overtaken by substitute products such as portable computers
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Dell’s manufacturing and direct sales model was not well suited for the portable PC market. Consumers prefer to
purchase laptops in retail outlets, so they can look at and feel the design. Moreover, competitors began restructuring
efforts and significantly improved their business models. The decline of the desktop PC was one of the main reasons that
Dell lost its ranking as the leading global PC maker.Dell’s major competitors such as Hewlett-Packard, Apple, Acer, and
Lenovo adopted a greater focus on worldwide innovation and learning in the knowledge era. Knowledge as a source of
competitive advantage has allowed these MNEs to surpass Dell in market share. They were able to do so as they
outsourced their manufacturing operations entirely. However, Dell was still restricted by its decision to outsource only
components and desire to have total control over the final assembly. A notable example of a resurgent competitor is
Apple, which surpassed Dell’s market cap in 2006 with its catalogue of innovations such as the iMac and MacBook Pro.

Its competitors' cross-collaborative efforts and entrance into foreign markets, caused Dell’s slip in rankings. For
example, Lenovo’s acquisition of IBM’s PC Division ,had a significant impact on PC makers globally, including Dell.
Lenovo became the world's third-largest personal computing company overnight, gaining access to foreign markets
beyond china.

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Answer to the Question No 2:
Now I try to tell how can Dell overcome this problem, particularly as consumer frugality persists:-
1.Dell Technologies has announced that it achieved leadership position in the world in 2023with a
revenue share of 36.0%. The company also ranked No.1 in 2013.
2.Dell try to capture top position again by give their consumer something special that no other
companies didn’t give before.They work with structure of their Laptops and try to make it unique.
3.Dell Technologies’ comes back with performance, simplified management, intelligent automation
and enhanced security designed.
4.Dell actually was reknowned for their Desktop pc,Now they can can launch extra facilited laptop
with lower price than their competitors.
5.Dell can give more unique features to their consumers.
If they do it properly I think they again go to the top posion,This is my recommendation.