This memo recommends Dell to focus on creating value activities to increase its competitive advantage. One possible way is to target the customer needs regarding the adherence to new digitalization standards, such as cloud-based services. This way, the company can digitally compete for new customers with its rivals, simultaneously increasing the retention of the existing customer base. Another possible functional strategy revolves around answering the replacement demand regarding smartphones or tablets. The ability to supply a variety of substitutional products has a great potential to attract new customers while increasing brand reputation and market share.
Background
Since its establishment, Dell has achieved great success as a company that specializes in the PC market. However, in 2013, Dell found itself struggling to maintain a competitive advantage (Investopedia 2021). To retaliate, Dell’s management decided to restructure the company, assuming the main weaknesses to be the poor attitude toward customers and stakeholders. The assumption was supported by the public scandal of 2013 and stakeholders’ unwillingness to allow the restructuring to occur privately, which was required due to instabilities in the U.S. economy (Investopedia 2021). In the past, Dell has had a public relations problem. They have not always maintained healthy relationships with customers and investors causing mistrust and ethical concerns.
Discussion
Dell’s poor attitude toward stakeholders and customers resulted in a reputation loss due to low business transparency and customer service outsourcing. In addition, the contemporary U.S. economy’s issues forced Dell to restructure privately, distancing from America-based operations. Consequently, global strategies following Dell’s return to the public should include promoting the company’s ethical and social responsibilities and orienting toward the global environment. In the former case, Dell’s reinforcement of the brand’s reputation can be done through the extensive marketing campaign of the ethical changes it implemented during reconstruction (Isabelle et al. 2020, 30). Regarding the latter, Dell already has factories worldwide. To avoid unfavorable circumstances in the U.S. market, it should continue to increase its market share in other countries. It will also help to improve the customer base, which will be in accord with the current industry phase.
Recommendations
Dell Should Adopt a Centralized Business Model Organizational Structure Approach Because It Would Benefit the Company. This Organizational Structure Has Numerous Positive Potential, With Mid-Level Management Not Having to Develop Financial Solutions. The Negative Drawbacks Are That Executives May Not Want to Share Power and Authority With Other Levels of the Company, or Mid-Level Management Decisions Will Not Be Effective or Efficient. The Consequence of Dell’s Lack of Strategy Change Is Developing a Poorly Managed Company That Has Lost Sight of Its Mission, Values, and Goals. The Company Can Adapt Its Model to Formulate Sales Channel Strategies That Optimize Sales’ Organizational Structure in Specific Multinational Markets. This Strategy Can Enable the Company to Increase Revenue and Optimize Products and Services’ Global Value to Customers.
Other Issues
In its functional strategies, Dell should focus on creating value activities to increase its competitive advantage. One possible way is to target the customer needs regarding the adherence to new digitalization standards, such as cloud-based services. This way, Dell can digitally compete for new customers with its rivals, simultaneously increasing the retention of the existing customer base (Neher 2021). Another possible functional strategy revolves around answering the replacement demand (smartphones or tablets). The ability to supply a variety of substitutional products has a great potential to attract new customers while increasing brand reputation and market share.
References
Investopedia. 2021. “How Dell Stock Ceased to Exist.” Investopedia. Web.
Isabelle, D., Horak, K., McKinnon, S., & Palumbo, C. 2020. “Is Porter’s five forces framework still relevant? A study of the capital/labour intensity continuum via mining and IT industries.” Technology Innovation Management Review, 10 (6): 28-41. doi:10.22215/timreview/1366
Neher, K. 2021. “Twelve Digital Marketing Trends For 2022 And How to Take Advantage of Them.” Forbes. Web.