Dell computer- A New Way

The innovation and changing business model is the necessity in current market, its proof by the way of Dell computer, Dell computer was famous for direct selling for computers, laptops, but in current market its change, Dell is selling his computer by the way of distribution, why they do that, the answer is simple consumer is king, consumers demand is always change, so company also want to change, but Dell were not did it in past so now its market capitalization is only $30 billion(october2009), those was $100 billion in 2005. But interesting thing that apple share in market is double compare to 2005, and HP also increase 10%, why only Dell decrease?
The reason is simple they not change themselves according to the consumer, apple and HP did this, they innovate in their products. But after 2006 Dell wake up and did change in Dell business model, now they are more focus on skill, innovation and flexibility those they were not in past. So according with time, things also change.
A perspective of Dell market capitalization (in billion $)
In 2005 their market capitalization was$100, in 2007 it was $59 and in 2009(January) it was $21 but by their move it’s increased and now in October 2009 it was $30.
“There’s been a pretty ignoramus shift in our business over last several years” says Dell.
The old Dell is history, we are not trying to become like our competitors he says “We are digging our own path” says by Dell CEO.
Dell market share have drop near 40% whereas Apple and HP increase, net income also dropped out by 28% to $2.6 billion in fiscal year end 2007.
Later in 2007 Dell broke his tradition to selling direct to the consumer, its announcement to sell its machine at Wall-Mart and by the way of distribution channels. They realize his mistake, so now they have become more risky, investing in R&D, Dell give the responsibility to change Dell computer old structure to Gladden, a 20 year veteran of GE. He changes process and culture, now they focus on consumer rather than product.
They decide to segment his business in four segments-
• Consumers
• Corporations
• Small and medium size business
• Government and education buyers
DELL – Past and Present, they make new strategies to capture market again, they are making new way to walk-
In past Dell distribution, innovation, acquisition, management, were different, they were not in distribution, they invest in innovation less than 1%of its renenue and they did not do any acquisition in past, and management only focus on sale laptops.
But in present everything have change, they doing acquisition, investing in innovation, selling software, and big thing that they are selling computers by the way of distribution.

This was the strategies, dell computer adopt for making trust again, and it’s also working but slow.
(Source- business week 26th October)

Pulkit Goial