Netizen

Friday, August 14, 2009

It's Not Dell, It's The PC

Dark Days at Dell BusinessWeek For company founder and Chairman Michael Dell and Chief Executive Kevin Rollins, this summer has been one mishap after another ....... its predicament may be intractable. Dell remained slavishly loyal to its core idea of ultra-efficient supply-chain management and direct sales to consumers, even as rivals have stepped up their game and markets have shifted to take away some of Dell's key advantages. Instead of adapting, critics say, Dell cut costs in ways that compromised customer service and, possibly, product quality. ........ "They're a one-trick pony. It was a great trick for over 10 years, but the rest of us have figured it out and Dell hasn't plowed any of its profits into creating a new trick." ....... [Dell's] culture only wants to talk about execution. ..... "Dell is not a fun place to work, and it's less fun now than it used to be." ....... Notebook PCs are becoming a far larger percentage of the market, but the Asian contract factories that make them for Dell also make them for other companies ...... a tightfisted approach to research and development stunts new-product innovation

Dell is not having a bad quarter or a bad year. Dell is a victim of a paradigm shift that is underway. The PC will stick around, but just like planet earth once, it will realize it is not the center of the universe. Dell was born and raised as a PC company. The chances of it doing well through the paradigm shift are slim at best.

Dell has been hit by a double whammy. One, the paradigm shift away from the PC that is underway. The netbook portends of things to come. Two, Dell has become the victim of its own success. It did well what it set out to do: churn out cheap PCs. But just like Microsoft is stuck with Windows, Dell is stuck with cheap PCs.

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Image via CrunchBase