Dell Case Study

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a disadvantage to its competitors. Dell’s competitors were focusing on servers, software, and consulting which are all higher margins than desktop computers.

In order for Dell to catch up to its competitors it needs to branch out to other sources of income that will bring them a higher profit margin. Dell should be taking advantage of other outlets such as servers, software, and consulting. This is where Dell’s competitors are way ahead of the game. Dell to take needs to take advantage of these outlets they have already started looking into mergers that would help them gain expertise in the previous mentioned areas. By purchasing Perot Systems (an IT services company) it allowed Dell to expand into higher-margin computing services but it still was not enough.

My recommendation for Dell would be to start really pushing their other products with higher margins through marketing and also even bundling. In order to make sure that both of these things are successful Dell needs to make sure that the product they are selling is high quality. In order to ensure high quality product I suggest that they re-think how much they are spending on R&D. This could help them exponentially in the market if they just spend some time finding out what works, what doesn’t work, who has a need for it, etc.

Since Dell originally focused their time and money on supply chain management and process engineering, they have now perfected this area. Now that Dell no longer needs to spend money in this area I propose that they look into their financials and see what kind of money they can invest in R&D. Research and development are one of the many reasons Apple and HP have surpassed Dell. By allocating funds towards R&D when it comes to the higher margin products previously mentioned it could give Dell the competitive edge it has needed in regards to servers, software, and consulting. This solution may not be ideal at first due to having to spend money but in the long run it could give off double the reward.

Here is a breakdown of what needs to be implemented

1. Research what funds can be allocated to R&D

2. Perform more R&D on servers, software, and consulting (higher margin products)

3. Create a high quality product from utilizing R&D for all business channels (large, public, small/medium, and consumer)

4. Find creative ways to market, such as bundling, free trials, BOGO (limited time offer) etc.

In conclusion, if Dell were to spend more time and money on R&D I believe that they could overcome their shortcomings when it comes to servers, software, and consulting. Spending more time and money on R&D is a smarter decision long-term for Dell in my opinion.