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Dell pushing hard for customer satisfaction

With the one possible exception of the move into Wal-Mart Stores (NYSE: WMT), I'm getting very strong messages of positive change from Dell Inc. (NASDAQ: DELL). What I'm seeing is a company that is pushing hard in multiple directions to find the strategies that will return it to good standing. If Dell can untangle some sluggish bookkeeping and get its corporate interior straightened out, it can then forge straight ahead, unrestrained by its attempts to heal its marketing weaknesses. There's a lot of upheaval going on at Dell right now, but it's certainly not all bad.

Dell's move into Wal-Mart has met with mixed response. At first I myself didn't like the move but that's probably mostly because I wanted Dell to align with Radio Shack Corp. (NYSE: RSH). Given the fact that computer prices have reached the level where a discount retail chain can sell them for profit, I guess there's no reason why Wal-Mart shouldn't be the one to do it. As long as Dell keeps its consumer direct options open so that folks like me can "custom" build one, I'll concede that the Dell/Wal-Mart alliance may become a good one.

A definite positive move that Dell has recently undertaken is its decision to preinstall the Ubuntu Linux operating system. Linux seems to be a preferred operating system in circles of web "professionals." I have the distinct pleasure to rub elbows with some of the internet's best writers, and the more I do that, the more I find that the busiest ones seem to prefer Linux. The Linux change and other customer focused moves seem to be driven by input that Dell receives via its own community forums. "We are responding directly to feedback from customers," Dell spokesperson Anne Camden said.

Latest in a series of moves by Dell to become more deeply consumer responsive is their decision to allow consumers to "opt out" of preinstalled programming, sort of like an operating system line-item veto. Based on the success of a "no software preinstalled" option that Dell promoted with its XPS systems a year ago, Dell has determined to take the favorable response to that scenario a step further and will extend it to Dell Inspiron and Dimension lines. Analysts are speculating that there's a remote possibility that this change will mean a revenue drop for Dell, but there's little credence to that assertion. Besides, the focus here is a realignment of Dell with the consumer, and if done successfully, that's where all the gold is hidden.

Dell's move into Wal-Mart: a change in strategy?

Everyone who's interested in the Dell to Wal-Mart retail scenario wants to get a better idea of just exactly what Dell intends to do over there. We all know that Wal-Mart (NYSE: WMT) is the "Low Price Leader", so how does this play out for Dell (NASDAQ: DELL)? Being that my Dell corporate headquarters spy drones are down for repairs and my Wal-Mart corporate spy cams have been taken off line, I can only speculate on the intended direction which Dell's move is going to take. Over at Engadget the response to this move has been tepid, or leaning towards not well received.

First, let me say that at its root this Dell move is an excellent idea. By that I mean Dell has needed a direct outlet to the consumer for quite some time. Some of the tech sector analysts where aghast when they heard of this move because they had quickly assumed that Dell was changing over their entire marketing strategy to volume by low price but I assure you that's not what's happening here. Dell will still be building the lion's share of its desktop computers to customer order and shipping them direct. Wal-Mart, for the time being at least, shall only be handling a couple exclusive Dimension desktop models and I expect a select few notebook and laptop models. I predict also that as Dell earns Wal-Mart shelf space, there will be other Dell branded consumer electronics moving in there, but probably never their full desktop line.

Wal-Mart is historically demanding in their requirements for wholesale purchasing. They set the prices, the volume and the time tables. It's very much a take it or leave it world when selling to Wal-Mart. To me, it's kind of a sign of desperation that Dell has opted to go this route. I honestly thought that a Radio Shack (NYSE: RSH) scenario would play out to a much greater advantage for Dell than this Wal-Mart strategy. Is this a sign that as consumers we're expected to cheapen our expectations when thinking of Dell? I assure you that is what will happen. I'm expecting to spend about $2000 on a new PC next year. Perhaps it will be a Hewlett-Packard (NYSE: HPQ) after all.

Now, if you'll excuse me, I have to get to work on these spy drones.

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Last updated: May 28, 2012: 09:15 AM

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