Reorganizing Dell Inc.


Reorganizing Dell Inc.
Case Code: BSTR367
Case Length: 17 Pages
Period: 2000-09
Pub Date: 2010
Teaching Note: Not Available
 Price: Rs.300
Organization: Dell Inc.
Industry: IT, Hardware
Countries: US
Themes: Corporate Restructuring
Reorganizing Dell Inc.
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case examines the corporate restructuring program at Dell Inc. (Dell), the US based leading technology company which develops, manufactures and sells personal computers and other computer-related products. Founded in 1984, Dell went on to become the largest seller of PCs and servers in the 1990s. However, with rising competition by early 2000s, Dell's market share started falling and its profitability was affected. To counter the competition and in an effort to arrest the declining market share and profitability, Dell started a major corporate restructuring program.

The restructuring program was implemented under the leadership of Michael Dell (Michael), the founder, Chief Executive Officer (CEO) and Chairman of the company.

He initiated several changes including more focus on product design, selling PCs through retail stores, acquiring software, storage and technology service companies and implementing significant cost-cutting exercise. However, when the restructuring efforts were still underway, the global financial crisis of 2008-09 affected Dell's financial performance adversely. In January 2009, Dell started another major reorganization program in which its global business was restructured around four customer groups – Large Enterprise, Public Sector, SMB, and Consumer instead of the earlier geographical divisions. The company also initiated changes at the top management level. The case discusses the restructuring measures taken by Michael at Dell. It discusses the impact of global financial crisis on Dell's businesses. The case ends with examining some strategic measures taken by Dell to regain its market leadership position.

Issues

The case is structured to achieve the following teaching objectives

  • Understand the changing dynamics of the global PC industry
  • Examine the growth strategies of Dell over the years
  • Evaluate the efficacy of the measures adopted by Michael Dell to improve the financial performance of the company during his second term as the CEO of Dell
  • Analyze the impact of global financial crisis on Dell
  • Examine the future strategy of Dell

Contents

Keywords

Dell Inc., Corporate Restructuring, Organizational Restructuring, Product Design, Direct Business Model, Channel Partner Program, Value Added Retailers, Layoff Program, Global Financial Crisis, Global PC Market, Cost Competitiveness , Pricing, Business Groups, Product Portfolio, Mobile Internet Device

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