What has been the state of Dell prior to and in 1993? Focus on financial situation, customer base, product quality, and development process. Prior to 1993, The Dell selling model was- direct mail order sales to customers. The Dell was short of efficient management. It was facing many problems like - Foray into retailing, incapable senior management who cannot guide the company toward maturity, lack of structure in Dell’s product development process etc. Dell had cancelled a new line of laptops deemed to be slow and expensive. Also In October 1993, Dell recalled 17,000 notebooks that were sold the year before. So overall these resulted in the declining performance of Dell. Financial status prior to 1993
The net sales in the year 1993 were $2,013,924, stock holders’ equity was $369,200. Operating income was $139,112, gross profit was $449,452. 72.5% sales are from U.S and 27.5% are from Europe.
In 1993, Dell Computer Corporation engineers found that a capacitor in the company's discontinued 320SLi and 325SLi notebook computers might crack under physical stress. So they recalled 17,000 notebooks. After the announcement, Dell shares fell 25 cents to close at $16.125 in Nasdaq trading. The company posted a $75.7 million second-quarter loss, its first red ink since Dell became a public company in 1988. Dell is now in the dilemma of deciding on strategic move, which affects the company performance. Product Development process prior to 1993
Upton 1993 product development was informal, run by autonomous teams centered on experienced developers. In early 1993, after cancelling a multibillion dollar [project, Dell recognized product development around core teams of development professionals from different functional areas. So prior to 1993, Dell operated very much in an entrepreneurial mode and with products being developed in a relatively ad-hoc fashion. By 1993 dell had grown to a corporation where formal and structured process were required.
The Old Development...
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