Managing in Troubled Times Case Study

Problems Galore at Dell: Signs of a Downfall?

OR

Abstract:
Since 2001 Dell had been the undisputable leader in the US PC market. Dell had been so enamored with its PC business that it failed to notice what its competitors pursued. Dell failed to innovate while IBM and others turned to consulting and development. IBM sold out its PC business to Lenovo since it realized that PC manufacturing did not fit into their core business agenda. Later it seemed that Dell developed a streak of complacency in its attitude. PC market saturation in the US and other developed economies, along with investor impatience, fierce competition and product quality deterioration saw Dell missing its expectations in 2006. Their entry into portable music players and PDAs did not strike much luck since Apple’s iPods outsold every other brands in the US market. This case discusses the problems that Dell faced and what Dell has to do in order to avoid a downfall.

Pedagogical Objectives:

• To understand the US PC market
• To understand Dell’s strategy of selling PC’s
• To understand problems for Dell’s growth in recent times.

Keywords : Personal Computers; Dell; PC Direct Selling; US PC industry; LINUX; Microsoft; IBM; Lenovo; Managing in Troubled Times Case Study; Chinese computer market; laptop explosion; AMD; product quality decline; Product recalls; Michael Dell

Contents:

• The US PC Industry
• Selling! The Dell Way
• Is Dell Losing Ground?