Case ID: HKU575
Solution ID: 2838

Dell Overcoming Roadblocks to Growth

Case Solution

In the spring of 2005, Dell, Inc., the world's largest personal computer maker, announced a new goal: to reach $80 billion in annual sales by 2009. The goal was fairly ambitious for Dell, which at the time had revenues of about $49 billion. In the second quarter of 2005, Dell significantly missed revenue expectations and lowered its outlook. Dell shares were down by about 28% from the end of 2004 to late December 2005, whereas those of its major competitor, Hewlett-Packard Co., had soared more than 36%. Given the dip in revenues, investors began to question whether Dell was still the high-flying growth company it once was. Could Dell get its revenue growth back on track to realize its bullish vision? Could the company capture the opportunities available outside the United States, where its presence was younger and its share smaller? As Dell expanded into new product markets, could it replicate past success with the direct model and find new drivers for growth?

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