According to an article in the recent issue of Forbes, Dell is not making the turnaround that Michael Dell had hoped that it would. Chief Executive Michael Dell told analysts in a conference call that "it's very clear we have significant work to do on our cost structure."
The PC market has been a sprint to the bottom for a few years now. Trying to compete in a commodity market based on price is a loosing proposition for everyone involved. There is only so much cost that can be taken out of a product. Dell's goal is to have levels of profitability comparable to its competitors in the consumer market. Unfortunately, they have a long way to go.
I contend that Dell's primary problem, other than selling $400 computers at Wal-Mart, is their deplorable customer service. It has become legendary according to the Wall Street Journal. How much customer service is build into the price of a $400 computer? Not much! Think about it. Do you actually know anyone that has not had a bad customer service experience with Dell?
Unfortunately, there is not one PC maker that can compete with Apple on customer service. Why is that? The PC manufacturers are focused only on costs. Long ago Apple decoupled the price of customer service from its actual hardware. Apple's customer service is not cheap but it is second to none in terms of customer satisfaction. The PC manufacturers could learn a lot from that business model.
Personally, I would like nothing more than to see Dell return to its days of glory. One way to do that is move up market and focus on great customer service!
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