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Dell is undoubtedly one of the big and most prosperous companies in the world. It has evolved to set a precedent for decades and its milestones can never be underestimated. Started by Michael Dell, the company began in 1983 by selling desktops and has grown to become a leading supplier of computer systems.
The company is also well known for its cost effective and direct models that have enabled it compete at the highest level with other competitors. The company has however not had it easy in its endeavour to succeed as it has faced tremendous challenges that have at times led to decline in its revenue and growth. This paper therefore endeavours to provide an insight on dell with analytical and cynical view.
A critique is meant to affirm its weaknesses and areas in which it has failed to produce much of the impact with dell objective being to attain success by being a company that provides personal computers and also one that ensures their customers have had the best experiences with their products.
This objective at some lengths has been attained in the history of Dell where it led in periods of the 2000 up to 2003 as the biggest and worldwide firm of computers in both the U.S and other countries such as Asia and North America. The year 2003 saw Dell shift its focus to other hardware products such as ink jet printers that led to the company attaining revenues from other quotas.
The subsequent year of 2004 was no different as the company attributed its success to four strategic initiatives. These initiatives were driving the economic growth, having an improved customer relations, product leadership, and continuous winning ways of Dell. In 2006 however the company started facing tremendous challenges that stemmed from management.
At the time the founder Michael Dell had left the position of CEO to Kevin Rollins. The question then is why Dell started experiencing challenges that had grave effect on the financial performance of the firm. The company had declined margins of sale and received negative news coverage. These made it possible for the former CEO Michael Dell to resume office and try to get the company to its former glory.
It however had to surrender its leadership position to companies such as Apple and HP. Dell had exited from low end products hence making the competitors able to catch up and overtake them. The competitors had also resorted to same tactics of lower prices hence capturing Dell customers. The company therefore resulted in manufacturing so as to re-establish itself as a powerhouse.
The change in technology in the recent years has made it easy for corporations to produce Smart phones and tablets that have relatively taken control more than the laptops. This trend has seen a rise in the revenue of companies such as Apple that have embraced tablets and smart phones. Dell in recognition that computers are at a slower growth rate have come up with strategic plans to introduce low cost tablets.
This will enable the company to increase sales and be able to catch up and have an edge with firms that do not produce tablets. Dell intends to do these with the idea that there are about other 15 competitors. This will have to mean that they need to produce something that is different and gives customer satisfaction.
The tablet will have a state of art technology from advanced technology of windows 8 to cloud technology that enables users to save and transfer data. A microchip for increasing speed will be combined with a battery that is more efficient than the Dell laptops.
This strategic plan of Dell needs a lot of advertisements as it needs to make known to the market on how good and different their product is from the rest. Dell on this note intends to use the low cost tablet message so as to attract a large number of people who have paid a lot more for Apples Ipad. This will all be based on the premise that Dell has for years been the leader in terms of quality and affordability.
Dell intends therefore to apply the high value segment to penetrate the market and make a considerable impact. A considerable 40% of the total expenditure will be required to set up a place for the manufacture of the new product, which is the tablet. With the market growth rate being at 16.3% the industry seems to be in a cut throat competition with already established market that poses a great challenge to penetrate.
The company will have to utilize its strengths so as to make the product to have a lasting impression on the customers. Dell is a well renowned brand that has lasted for years and these can create trust to customers.
An excellent financial position and quality products are part of the advantages that it enjoys that can make it penetrate the market. Dell also has a strong management team that has made it possible to be renowned globally as both a manufacturer and a distributor.
However, Dell hopes to enter into new venture may be dealt a big blow if some considerations are not put into place. Its insistence of forecasting as a way of producing raises a lot of doubts and provides the possibility of inappropriate forecast that may lead to low production or excessive production. The changing trends of technology pose a threat to the existence of tablets and Dell as a company.
This is so because some products over time become absolute. The entry of other competitors in the same line of product will mean there is increased competition. This can even spill to these firms entering the market with low cost product that will mean that Dell product will lose considerable revenue.
Dell has depicted itself as a firm capable of providing the customer experience required and even capable of creating the so called dell effect . However, its lack of observation of the changing markets has made it lag behind other corporate that were behind them a decade ago. This revelation shows that it has indeed taken them time to study the market and realize tablets and smart phones were the current technology needed.
The fall of Dell in 2007 was disheartening but that should have built them to become even more powerful and more aggressive. Its strategic plan of a tablet is more of trying to capture a market that already has its owners. With Apple Ipad leading, Dell will have to contend with second fiddle as they try concentrate high value end. These may be downplayed by the fact that there is the Apple which provides quality.
With the ever looming threats of a new venture, Dell is aspiring to a venture that has risks and may be a failure. This though does not mean failing may be achieved but means that Dell have to put in more effort in convincing the customers to buy their products and further use their strong points to approach these new venture.
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