Dell's Founder Strikes Deal To Turn It Around
"What Michael Dell was all about was getting products to people faster and more directly and at a lower cost than anyone could," said Forrester Research analyst David Johnson.
While Dell PCs are still used in offices and homes around the world, the industry has proved unforgiving to those who don't evolve with it. With smartphones booming, PC sales falling 3.5 percent last year, and tablets expected to outsell laptop computers this year, Dell's old slogan is more likely to be phrased as a question, as in: "Dude, you're getting a Dell?"
Dell Inc. is now selling itself for a price that is about 80 percent below its peak market value of more than $150 billion in March 2000. The company is now the world's third-largest PC maker, having fallen behind Hewlett-Packard and Lenovo. Apple has a smaller share of the computer market but more than makes up for that with its sleek iPods, iPhones and iPads.
IBM managed to reinvent itself during the 1990s when its main business of selling mainframe computers began to suffer as desktop machines grew increasingly powerful. But it took nearly a decade.Michael Dell stepped down as CEO in 2004, staying on as chairman. But the Round Rock, Texas, company faltered under CEO Kevin Rollins and saw its first-ever profit decline. Customers complained of poor service, and sales slowed as Dell faced a market glut of cheap PCs from other makers. The company lost its No. 1 position to HP 2006 and never regained its standing. Michael Dell returned as CEO in 2007 and began carrying out a turnaround plan, dubbed "Dell 2.0," that included improving customer service, thinning the managerial ranks and expanding into new businesses. Moorhead said it will probably take Michael Dell at least another three to five years to transform his company. That's a timeframe that probably would have caused Wall Street to grow even more frustrated with Dell Inc.
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