IIPM: TWO YEAR

Dell’s refashioning is largely to be better able to compete with HP, which under CEO Mark Hurd, has become a menacing threat. HP has been continuously leveraging its relationships

with retailers to better target consumers, which has helped considerably in increased PC sales. According to market research firm IDC, Dell increased its market share to 16.4% (as compared to 15.5% in the previous quarter) as against HP’s dominant 18.9%. Dell recorded a 21.4% y-o-y much ahead of industry growth rate of 15.3%, but the growth has been at the cost of a substantial 17% drop in Q2 profit, which drastically resulted in plunging of shares. Brian Gladden, CFO, Dell, said in a statement, “Strategic actions to accelerate growth in certain areas of our business have affected gross margins this quarter.” However, Michael Dell said he is pleased with his broad-based growth, though he accepted that there are areas where Dell’s price cutting was “a bit too aggressive.”...Continue

Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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