Back to the Basics for Dell

In Computer industry Hardware is table stakes - what you do with it is what matters.

Back to the Basics for Dell

Disclaimer - I'm not sharing anything here that's original. Everything I write in this post is tribal knowledge within Dell, I'm just putting it in perspective.

Actions such as - one price, streamlining portfolio, reducing confusion on website are actions whose influence is long-term and indirect.

Question Dell has to ask is whether it wants to be a K-mart or a Wal-mart? K-mart believed in Blue light specials? Wal-mart in everyday low prices. K-mart offered Martha Stewart collections. Wal-mart stuck to generic brands and private-labels - in line with the needs of its core customers.

If there's one thing we can all agree upon is that, you can't be all things to all people. There's a graveyard full of companies that have died trying that.

Product-proliferation:
Entry-level Vostros

6 models - 18 configurations and each one can be customized in at least 500 thousand ways.

Mid-end Latitude

High-end Precision

We even market our next gen Precision laptops as something that can be configured 6 billion ways. Exactly what our customers asked for. Or does he?

In this age of infoglut, Customers are looking for easing their buying decision not complicating it while getting a reasonable level of customization. 64 configurations between .

Look at the most successful car company, Toyota. First there's watertight branding. You don't decide between a Scion, a Toyota or a Lexus. That decision has already been made for you. You pick the type you want (sedan, van, SUV etc) and there's a model in each category you can choose from and then pick features you want. Simple. And I'm talking about the second most expensive purchase you'll make in your life. For those who are more comfortable looking examples within PC industry - Apple. Again, Dell is trying hard to be all things to all people.

We started the mass customization trend and now we're taking it to a whole new level.

I haven't included Consumer systems here for our cross-shopping customers. We should encourage them not discourage them. We wean customers from other segments creating unnecessary cost and confusion. My answer to those SB customers who want consumer systems is - let them buy it. Only exception we should make is for gaps in our portfolio (e.g., netbooks) versus our competitors.

Right now Dell seems to be in a quandry, if we streamline our product portfolio we risk the additional revenue stream from those products. Business we lose.

One you make customers the focus of your actions then you'll realize all the choices and tradeoff are easy to make.

Solutions: In Computer industry Hardware IS table stakes - what you do with it is what matters. SB Customers buy PC, Servers, storage to do things. Among other things they use our systems to run their business, cut costs (automate), store and retrieve information and communicate. Beyond knowing that we offer systems that fit their needs and budget, and that it's a reliable product backed by good service, business customers aren't obsessed with design and coolness.

Solutions is what they want from us, solutions that makes their IT infrastructure very invisible from maintenance standpoint and yet very visible in helping them run their business better. We don't make money by taking it from customers, we make money by helping them make money.

If there's one company that Dell should emulate it's Amazon not even Wal-mart. Steady, focused and customer-obsessed.

These are easy fixes to implement but their influence is long-term and indirect not something that we'll be able to measure in the next quarter. For that reason alone these decisions are tough to implement more so given current environment. Choice, as always, is ours and so are the consequences.