What is a Contingency Plan?
Also known as “Scenario Planning”, a contingency plan is the creation of alternative hypothetical but equally likely future conditions. It's about preparing for events such as the loss of Top Management, Customers, Suppliers and Market Share due to competition. Contingency planning is a normal part of everyday business. The need for a contingency plan, or a plan “B”, is extremely important and requires a thorough analysis of risks that a business may face.
Dell originated in 1984 when Michael Dell started selling custom built IBM computers out of his University of Texas at Austin dorm room. In 1985, he dropped out of college and formed the company Turbo PC which grossed more than $73 million in the first year of operation. In 1988, the newly named Dell Computer Corporation went public and in 1992, Michael Dell became the youngest CEO to run a fortune 500 company. Dell quickly became the #1 rated PC Company in reliability and customer service and maintained that position through 2001. In 2002, many of the Dell call centers were outsourced overseas which largely damaged Dells customer service reputation. In 2003 the company rebranded itself as Dell, Inc. During this time, the Desktop PC and Laptop market was huge and Dell found itself having to compete with the High Volume / Low Margin products of HP and Compaq. Dell, unlike the competition, did not have a large retail presence and instead of investing in Innovation, Research and Development, like Apple and Samsung, Dell remained an on-line only presence. By 2005, the PC and Notebook sales had slowed and the company had lost 25% of its value. By 2006 the company was down 40%. It was clear, Dell needed to make inroads into non-PC segments and though they ultimately did, it was too little, too late. On February 5th, 2013, Dell Inc. announced it had signed a definitive merger agreement under which Michael Dell, in partnership with the investment firm...
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