Dell’s New Horizon

DELL’S NEW HORIZON 4

Dell’sNew Horizon

Dell’sNew Horizon

Question1

TheDell Company, foundedin 1984, wasrankedthemostsuccessfulcompanyin thePC industryin thetwenty-First Century. Thecompanykeptan admirabletrackrecordin salesandprofitsin thecentury,surpassingthetargeted salesof one billion US dollarin 1992. In 1997, thecompanyexceededthetargeted ten billion US dollarsalesandsurpassedthetwenty-five US dollartargetin 2000. Therevenuesof thecompanygrewby morethan thirty percent, with thereturnson investedcapitalhittingtheheightsof 243% in 2000 (Rangan, 2000). Themarketcapitalization of thecompanyin 1998 hadexceededtwo thousand US dollars,owingto thehyper-inflation in themarketduring theyear.Asa result,thecompanywasrankedthirdmostadmiredcorporate by theFortune magazine.Asthecompanygrew,thecustomersegmentwascreatedto managetheincreasingdemandsof theclientele,with moreemployeesbeingemployedto keepup with thedemand.Among thefactorsthat ledto thehyper-growth of theindustrywerethenumerousinvestmentsin technology infrastructurein readinessfortheinternet. Further,there wastheexplosionof theinternet that ledto a boomof theinternet andinternet serviceproviders. Thisledto a slumpin thestockpriceof theDell Company, as wellas increasedmarketcapitalization (Rangan, 2000).

However,the growthof theDellCompanycameto a screeching haltin thefourth quarterof 2000. Thecompanydeclinedby ten percent, readingto its firstreductionin theworkforce forthefirsttimesince 1998. There weredifferentmarketentrystrategiesduring theperiod,with companiessuchas Apple offeringuniqueoperatingsystem,with an intuitiveandeasyto useGraphic User Interface. Theeaseof useof thesystemattractedmoreusers makingApple beton theproprietarysystemratherthan licensingits technology. Asthenationalsupplier of desktops andportablecomputers,theDell Company adoptedthebuild-to-order basisforclientsto orderdesktops, which provedcriticalincreasingprofitsof thecompany(Rangan, 2000).

Question2

OntheAugust of 2002, thecompanyindicatedthatitintendedto doublebusinessrevenuesto reachsixty billion dollars.Amongthebeststrategiesto achievethiswould be buildingon its reputationas theleadingtechnological provider.This can be attained by creatingan elaboratecustomercareservicesto listento its clienteleneedsanddevelopsolutionsthat solvetheneedsof theclient.Thecompanyshould focuson providinglong-term valueof theDellproductsleadingto deliveryof customized solutionsthat increasetheefficiency,accessibilityandeaseof useof theproducts,increasingtheadoptionof Dell computersamong thepopulace.Additionally, theDell companyshould focuson improvingits corebusinessby shiftingtheportfolioto highermarginandrecurringrevenuesover time(Hill, Jones Schilling, 2014). Thecompanyshould exploittherevampedInternetinfrastructureenhancetheonline buyingexperiencesto increaserevenues.Additionally, thecompanyshould focuson improvingdesignsupplychains,operatingexpensesas wellas logistics. Thiswillbeachievedthrough maintenanceof a balancedprofitability, liquidity andgrowththat will be criticalin enablingthecompanyto respondto variouschangesin theindustry.Thiswillbe aptin retainingthecompetitiveness of thecompanyin thein theindustry,increasetheclientbase.Thesestrategieswill proveaptin maintaininga strongcustomerbase,helpingthecompanyattainthetargeted revenuesof six billion US dollarsby 2007 (Hill, Jones Schilling, 2014).

Reference

Rangan,V., K., (2000). DellNew Horizons.Havard:Havard business school.