Dell Case Study Essay example

3241 Words Jan 8th, 2009 13 Pages
CASE STUDY ANALYSIS

DELL INC.: TIME TO DISCARD DIRECT SELLING MODEL?

Contents

1. Abstract

2. Introduction

3. Methodology

4. Results / Findings

5. Strengths / Weaknesses / Analysis

6. Recommendations / Conclusion

Appendices:
Appendix A
Appendix B
Appendix C
Abstract

Dell is a multinational computer company which managed to stay in the first place of computer system sales for over a decade. Its strong and revolutionized strategy of direct selling computers to the customers increased its success in the computer companies’ field providing it with a competitive advantage. However, the last year the revenue trend shows a significant decrease while other competitors’ share of the market has become threatening.
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Methodology

The quantitative method, the qualitative method and SWOT analysis are applied to this process to analyze the problems of Dell. This information about PC market share, the public attitude towards Dell, sales, and profit figures was collected from the Internet, consumer research and Dell’s annual report documents. That will ensure to understand Dell’s performance in the market and to suggest more reasonable recommendations.

Findings

• Dell has lost its No.1 position in the worldwide PC market in the 4Q of 2006
In the third and fourth quarters of 2006, Dell’s worldwide market share percentage declined from 17.2% in 3Q to 13.9% in 4Q (1). As a result, HP with 17.4% in 4Q has become the biggest PC seller in the world and Dell has lost the position which it had maintained since 2003. However, for the whole sales of 2006, Dell managed to keep its No.1 position, which the percentage of market share of Dell and HP was 17.1% and 17% respectively (2). A number of analysts pointed out that the growth of Dell by the direct selling model seemed to have come to the limit (3). In addition, judging from the result of the fourth quarter of 2006, it is predicted that HP will replace Dell as the largest PC maker in the whole sales of 2007.

• Dell ignored different customer behaviour in emerging markets
In the American PC

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