Dell (NASDAQ:DELL) -- formerly the world's largest computer manufacturer -- has announced that it will be shuffling its executive ranks as the company desperately tries to forget 2006 and move ahead to getting back to its most comfortable spot -- as the largest and fastest-growing computer (and other product) manufacturer. Other products, you say? Let me explain.While Dell is busy implementing a new operating structure very soon, the company needs to really determine where it stands outside the computer arena. Although Dell practically created the "build to order" system that has now been copied almost perfectly in the computer manufacturing industry, other manufacturers have been able to catch up to Dell in order to duplicate the efficiency and cost savings that Dell has by only making computers when customers order them. Part of the resurgence HP has seen recently is due to this, along with some other competitors as well. In other words, the cat is out of the bag and Dell can no longer rely on that technique -- which has been its hallmark for nearly two decades -- any longer.
But then again, Dell has tried to position itself outside the PC biz by trying to get into many consumer electronics areas, such as flat-screen televisions and MP3 players. The results have been middling at best, and Dell's MP3 players are no longer in existence, I think. With U.S. corporations slowing the cycle time between upgrading fleets of PCs, Dell has suffered greatly since its main cash cow is that market (not the consumer market). Additionally, Dell's exposure to non-U.S. sales hasn't been as great as the company would have hoped, which pins its future to the U.S. market in a large way (not a good thing).
Have customers become fed up with Dell's perceived customer support issues recently, along with a boring and staid product lineup? Sure, Dell's XPS systems have very good design flair, and the company bought specialty computer maker Alienware to have some custom options for a niche market, but it still makes its notebook computers "to order" instead of carrying inventory like most others -- and that's been a problem. Why? Because retail sales have surged back with a vengeance and Dell is not in that vein. So, it seems that consumer customers are more interested in browsing retail shelves for new laptop systems (on-hand variety) rather that custom building a system and waiting for it to arrive -- for about the same price.
Dell is also down 37% from its 2005 share price high.
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Reader Comments (Page 1 of 1)
12-13-2006 @ 1:40PM
Papa Bear said...
The author must mean forgetable not forgetful. This is only the first of the many writing errors in the otherwise informative article. They seem to have forgotten, if they ever learned, basic English.
12-13-2006 @ 12:04PM
frank murphy said...
I have a small business and purchased 3 to 4 dell computer systems a year until I had so much trouble with the service that they switched to India. At that point, I switched to HP and will continue with them for the time being. I am sure HP is using India as well but wonder if these companies ever factor into their decisions the loss of skilled people here that will take time to retrain plus the loss of small customers such as myself.
12-13-2006 @ 12:05PM
Brian said...
Actually, I did mean "forgetful", as in "likely to forget" in relation to Dell's execs probably not wanting to remember 2006 at all.
http://www.webster.com/cgi-bin/dictionary?sourceid=Mozilla-search&va=forgetful