Dell Featured in Business Week; Questions About Long-Term Success

Dell is featured in this week’s Business Week magazine . Don’t want to bore you with too many details when you can read the full article yourself.

Although it a bit of a ‘puff piece’ (PR teams – good work!), Dell gets its message out there that Michael Dell has been in control for a couple years now and while difficult, he has done a lot to reconfigure the company into what is now Dell 2.0 (or is it Dell Version 2.1 with service pack 3?). 

What to look for in the article:

• New Management & Customer Alignment: 
  What’s said: Dell hired a number of new Senior Execs with deep experience and organized the company into Global groups organized by the type of customer.
  What was left out:  In the process, the company has slashed headcount and morale is very low. And by the way, the company has always been organized around type of customer (SMB, Consumer, etc…), its just now that the company has big global groups coordinating across these customer types rather than letting each region team manage this.
• Product:
  What’s said: Hired in designers from Nike and spending more than he used to on product design. The new Lattitude Z and Dell Adamo show that Dell can definately make a sexy system rivaling Apple and others.
  What’s Left Out: Yes, sexy products are good for PR and competing with Apple. Thing is that Dell has always focused too much on US and Europe and not the emerging market countries where all the growth is happening. In order to succeed, Dell (and any other computer manufacturer for that matter) needs to develop better low-cost, high feature products to compete China and the emerging markets.
• Enevitable Industry Consolidation
  The article did a great job in the wrap up to talk about hurdles for the company. Publicly traded, cash rich and no growth = Dell is a major acquisition target. The PC Industry already has too many players and is ripe for consolidation. Will Dell be the aquirer of a company like Acer and vault to #1 in world-wide shipments? Will someone with deep pockets acquire Dell and kick Michael to the curb? Or worst of all, will Dell not find a dance partner and find its share and influence slip as other companies merge?