12
May
08

Michael Dell’s Comeback

Michael Dell

Micheal Dell created the company that bears his name from his college dorm at age 19. He served as the company’s CEO for 20 years before distancing himself from his company and becoming chairman of the board. Three years later (early last year), Dell decided to step back in as CEO. Why? According to a recent interview with The Economist:

“When you start a company, it’s a very personal thing,” answers Dell, who is now 43. “I will care about what happens to the company even after I’m dead. I just can’t let it go.”

It seems as though Michael Dell’s passion, drive, and management brilliance is getting things done, as the firm is regaining market share that was lost under previous management. For years, Dell had been the leader in PC sales worldwide, but recent changes in the global economy resulted in the company being knocked down from its throne by Hewlett-Packard. The biggest factor was that PC sales by volume have been shifting from rich countries to developing nations, and consumers in developing nations are a lot less prone to shop on the online marketplace (where a majority of Dell’s computer sales take place). While Dell still dominates sales in the corporate sector, previous management did not pick up on this new developing world trend:

How does Mr Dell explain his firm’s sudden loss of poise? Its growth, from revenues of $6 billion to nearly $61 billion over the past ten years, was based on a “very monolithic model”, which no longer works as well, he says. But the management was too focused on the short term to see this: “We were only doing things that optimised the business we had.” Back in the driver’s seat, he is now doing precisely the opposite: trying out new approaches and diversifying Dell’s business model both geographically and commercially.

Michael Dell plans on breaking away from this “monolithic model” by implementing strategies that are very unconventional for a company known for selling its conservative black/gray box PCs. These strategies include selling stylish PCs, and emulating its rival HP by providing IT services for corporate clients. Most importantly, Micheal Dell plans on infiltrating the developing markets (think China and India) by creating laptops and personal computers that are cheap enough to be purchased by the masses. It seems as though the brains are back in the building, and we can expect great things from Dell (the company), as long as Dell (the person) is behind the wheel.


1 Response to “Michael Dell’s Comeback”


  1. 1 Jordan
    May 13, 2008 at 4:29 am

    This is a great article. Just recently HP announced that it would acquire Electronic Data Corp., a IT consulting services firm for approximately $13 billion. As HP gets more into IT consulting services, Michael Dell definitely needs to expand better business opportunities for Dell, whether that be in making cheaper computers or targeting developing nations.


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