Dell Computers

Dell in its attempts to reduce costs decides to out sources its servicing call centers. They felt the outsourcing of such a small part of their business would go without notice and save them substantial costs. They moved their servicing call centers overseas. They also felt they led a competitive advantage that would last them for many years. Like many long-forgotten former champions, Dell succumbed to complacency in the belief that its business model would always keep it far ahead of the pack (Business Failure, p13-14). Dell failed to renew their business model to reflect economic changes and customer needs. Instead Dell concentrated on new product lines and reducing costs. The company is now dealing with unsatisfied customers and therefore, a loss of profits to HP products, which are readily available in retail stores. Based on the idea Dell had that merchandise sold directly by phone or the Internet would replace bricks-and-mortar stores, but was not prepared when they faced the idea that People like live shopping, even for technology, and bad service makes them angry (Where Dell Went Wrong, p62-63). This is what Global Communications is facing and will face in the future by out sourcing their call centers. In addition to unsatisfied customers Dell also faces unsatisfied employees. Industry sources say many of the recent management departures were not terminations but rather people burned out by an increasingly dismal turnaround effort (Business Failure, p13-14).

Dell decided to move back their call center from overseas. After receiving negative feed back from customers, Dell implemented other ideas in an effort to reduce costs as a long term solutions to regaining profit. Dell has chosen to concentrate on the reduction of costs instead of customer needs and a sustainable competitive strategy. Dell’s outcome has not been a positive experience, Dell had to recall more than 4 million notebooks last year that were sold with faulty batteries from Sony, and an investigation by the U.S. Securities and Exchange. Still, said one customer, it was Rollins' focus on containing costs at the expense of customer attention that drove the company's downward slide (Is Dell to Big for Michael Dell, p6). Dell’s product sales have dropped while Hewlett Packard and Apple have reported a gain. Currently, Michael Dell’s return to the company has allowed the renovation of the company's strategy to include its product