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Current Directions in Dell Inc.
Transcript of Current Directions in Dell Inc.
Julian Young-Valdovinos Core Competencies
Supply chain management
build customer value
close relationships with supply chain
"Configure to Order" Buyout Proposed by Michael Dell and the private equity firm Silver Lake.
Buying out all public shares.
Doing so would save Dell $4-5 billion in taxes. Company Decline 2005: Dell stock decreases by 25%
Lack of innovation
Inefficient production strategy
Poor customer service
Lack of research and development
Global Recession Stock Growth Comparisons Over the last year Dell has had below 0% growth rate Recommendations 1. Reassess core competencies
supply chain management
2. Scale down product lines
focus on few top quality products
3. Long-term research and development plan
new innovation/products Alternatives? Involvement of billionaire Carl C Icahn has complicated matters.
Currently, a committee is proposing alternative plans to a buyout.
They have until March 22 to make their cases, before Michael Dell and Silver Lake make the case for a buyout. The Market Tablet sales continue to grow.
PC sales are forecasted to fall.
What can Dell do to combat this? What is Dell's biggest problem? SWOT Analysis Strengths Weaknesses Opportunities Threats Brand name
Relationships with supply chain
Information on customers and trends from operations Growth in services and proprietary products
Partnerships with other retailers/manufacturers
Improvements to supply chain
Re-establishing secure disposal to customers
e-cycling and discounts for recycled products Lack of physical locations
Long lead time with globally sourced components
Single sourcing for certain products
Service criticized as poor Customizations from other companies
Price competition intensifying
Increasing shipping costs
Potential for backlash from suppliers due to power imbalances Global Recession The global market crisis of 2008 hit Dell along with other tech companies.
Between 2008 and 2009, earnings fell 63%, from $784 million to $290 million.
Between 2009 and 2010, Dell recovered steadily.
Throughout 2012, stock prices plummeted again. then rose dramatically when talks began of a buyout. Recommendations 4. Focus their effort on biggest margins
spread too thin
5. Take better advantage of Windows
6. Windows 8
Make PC's preferable to tablets R&D Comparisons R & D Expenses HTC spends 3.83%
down 5.23% from LY
Microsoft spent 13% (2011)
down 14% (2010)
IBM consistently spends 6%
HP spends 2.5%
DELL Spent 1% for fiscal 2011 Source: ychart.com Enough R&D? Given its size? Questions?