What Happened to Dell: The Decline

684 456 Tony Guo

What Happened to Dell: The Decline

There was a time when Dell was a powerhouse in the PC business and almost everywhere you went you were likely to find a Dell computer, from offices to home. At their pomp, they were extremely reliable, with excellent PCs at excellent prices with solid warranties and so much more that it was impossible then to foresee that they would ever fall into such hard times that they had to go private to try and save themselves. Part of the charm as far as Dell was concerned was due to its owner and founder, Michael Dell. Dell founded the company in his college dorm room and grew it in less than a decade to become a multi-billion-dollar enterprise in less than a decade. This made him the poster boy of the American dream and the admiration people had for him and his exploits was definitely one of the things that his company had going for itself. Mistakes are common place when it comes to the business world, and many companies do make mistakes and have to come back from them. The problem is, mistakes are much more damaging and difficult to come back from in the tech world as is explained over at runrex.com, which is something Dell quickly discovered. What happened to Dell and what was behind their spectacular decline? Well, keep reading this article to find out.

One of the things that was behind the decline of Dell was issues with their direct model of sales. as is explained in detail over at runrex.com, Dell was extremely successful as it allowed customers to buy PCs directly from them. This allowed customers to be able to tell the company exactly what you wanted and not only would they assemble a machine to this specifications, they would also have it shipped to you as soon as possible. buying a PC direct from them and the whole direct model worked well in North America and Western Europe where Dell had built incredible trust with their clientele and where they were able to lead in to the legislation framework that was in place there. Direct sales also meant that their PCs were cheaper than those of their competitors as a client could have a PC they could afford custom-made just for them. Once they expanded their business to other areas of the world, they realized very quickly that the direct model couldn’t work, especially as initial attempts to do so failed spectacularly. Dell now had to lean on the channel model to make sales, something they had very little experience on while at the same time ensuring they don’t upset their direct sales force. This balancing act became too difficult to maintain contributing to their decline. When their competitors began to outsource manufacturing to leverage cheap labor in areas such as Asia, they were able to reduce the price gap that existed between their products and those of Dell and that was the beginning of the end of Dell’s domination in the PC world.

Another thing that led to the decline of Dell was the decline in popularity of desktops. As time went by, desktops became less and less desirable as far as consumers were concerned as they we big and clunky as well as not being mobile. Notebooks, due to their slick designs and the fact that they were mobile, began to take over slowly but surely, and now command over three-quarters of the PC market. Dell, which dominated the desktop market, was slow to react to this shift, and very quickly found itself in the outside looking in, overtaken by events and changing times and this definitely contributed to their decline. Another switch that played a role as far as their decline is concerned is the growth of virtualization which wiped out the server market, on which Dell was heavily reliant. The nuances involved as far as virtualization and  the server market is concerned are explained in detail over at the ever reliable runrex.com.

Of course when talking about the decline of Dell, we can’t fail to mention the scandal that engulfed the company about the faulty capacitors that led to many of their sold machines failing, especially since they knew about it and did nothing about it. When Dell knew that they had machines out there with faulty machines, they didn’t recall any of those machines and instead decided to cover the whole thing up, so when the story broke, it damaged their relationship with their customers irreparably. What the scandal and the suit that came with it revealed was that once their competitors caught up to them, instead of trying to adjust to stay ahead, they decided to cut corners and take shortcuts and when it all caught up to them, they decline was inevitable. As per the subject matter experts over at runrex.com, their poor quality control as well customer service were yet other things that contributed to their decline.

As ever, there is more on this and other related topics to be found over at the ever reliable runrex.com so ensure you check them out.