DELL, INC.

A Case Study

Time Context
Year 2006 when it was observed that
Dell Inc.s growth, sales and profit
slowed down.

Viewpoint
Michael
Dell

Founder and CEO of

Dell, Inc.

Central Problem
The environment where the company is
operating no longer favored Dell's
business model leading to their slow
growth, declining market share, sales
and profits.

Objectives
Short Range Objectives

To
To
To
To

increase sales by at least 5-10% in the preceding year

increase profits by at least 3-5% in the preceding year
achieve a customer rating above the industry averages
decrease costs by at least 3-5% in the preceding year

Long Range Objectives

To increase market share by 10-20% over the next 3-5
years
To achieve company growth above the industry averages
over the next 3-5 years
To offer new and innovative products for at least once or
twice every year for the next 3-5 years

Areas of Consideration
Strengths
Dell, Inc. has already an established name in
the industry and even named as one of the
best.
Dell, Inc. has access to low cost and reliable
suppliers.
Dell, Inc. has numerous plants all over the world
and has the resources.
Weaknesses
Dell, Inc. uses direct selling strategy which the
environment does not favored the company
anymore.
Dell, Inc. products may be less innovative as

Areas of Consideration
Opportunities
New Technologies
Fast Growing Consumer Market
Increase Product Lines
Threats
Fast Growing Consumer Market
Changing Needs of Consumers
Merger of Competitors

Alternative Courses of
Action
1. Follow the Consumer Market
. Advantages
Consumer market is fast growing and becoming a
thing in the industry;
High inventory turnover
Regain of lost market shares through product
development

. Disadvantages
Consumer market offers lower profit margin for the
company;
It may entail more costs since products should be
physically available to retailers; and
This market gives tight competition.

Alternative Courses of
Action
2. Focus on Business Products
Advantages
This alternative offers advantages such as higher
profit margin;
Lesser cost
The company has already an established name in
offering business products over the years and
maybe gained loyal customers already

Disadvantages
This market is slowly moving
Low inventory turnover
Limited market

Alternative Courses of
Action
3. Offer products for both corporate and
consumer markets
Advantages
Dell can reach large number of customers.
Dell can take advantage of high profit margin in
corporate market and high growth in consumer market.

Disadvantages
Higher cost for the company because the company will
enter the retail market in addition to its direct selling
strategy.
It needs a lot of monitoring and effort since two markets
should be attended to.
High competition especially in the consumer market.

Recommendation
Offer Products For Both Corporate
And Consumer Markets
After carefully analyzing the situation that
Dell has been facing in its industry and
taking into account the factors that affect
and may affect their operations, we
recommend that Dell, Inc. should consider
serving the consumer market and do
retailing, in addition to its direct selling
strategy.

Recommendation
Offer Products For Both Corporate
And Consumer Markets
Invest in its research and development
Give importance on improving the features,
values and quality of its products and give
satisfying customer service
Develop more valuable products suitable for
its corporate clients
Utilize their strengths to take the most out
of this alternative in order to overcome its
disadvantages

Detailed Plan of Action

Detailed Plan of Action

Thank You.
Adoc, Donneca
De Lara, Ma. Estela
Amparo, Carissa
Dinglasan, April Joy
Apoloan, Norielyn
Kong, Mae Angela
Armado, April
Pedragosa, Jericho
Bumanglag, Donna Mae
Quizmundo, Patricia Jean