Magazine

Dell: Then and Now


A look at Michael Dell's shifts in strategy

Distribution

Dell used to undercut rivals on price by selling PCs directly to businesses and consumers. Now Dell is broadening its distribution, selling through retailers such as Best Buy and Wal-Mart and wireless companies like AT&T to appeal to a wider audience.

Innovation

Dell used to rely on Microsoft and Intel for most innovations, investing less than 1% of revenues in research and development so it could offer the best-priced PCs around. Now it's ramping up R&D to make its products stand out with innovative features and designs.

Acquisitions

In the past, Dell almost never did acquisitions, relying on growth in PC demand to boost its revenues. But with the PC market maturing, Dell is stepping up its dealmaking to push into tech services, storage, and other promising markets.

Management

As long as Dell focused on selling hardware, it could concentrate on the one objective of making those products as efficiently as possible. Now the CEO wants to sell software, services, and hardware, so he restructured the company around four customer groups to give each division head more autonomy.


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