Dell Computer Case Questions Please provide a detailed answer to each of the following six questions for the Dell Computer case. 1. What has made Dell Succeed to date? 2. What is Dell’s position in the industry to date? 3. An August 12, 2002 Business Week article, indicated that by 2007 Dell intended to double revenues to $60 billion. How should Dell go about building the nearly $6 billion annual sales growth needed to achieve that target? 4. What are the implications of your recommendation?
How will it affect Dell as a company? 5. If you disagree with Michael Dell’s growth target from Question #3 above, what would your alternative recommendation be? Why? 6. Dell has the following Code of Conduct ? "How We Win," Dell's Code of Conduct, provides general guidance to all team members on how to behave legally and ethically, and in compliance with the letter and spirit of applicable legal requirements, Dell policies and our ethical principles. It serves as a guidebook for living our value of winning with integrity. Our Code of Conduct, a fundamental component of our culture of integrity here at Dell, has been extensively revised and updated to bring it into alignment with our purpose and values, as well as with our business, brand and people strategies. ? Our reputation as an ethical company and trustworthy business partner is one of our most valuable assets and critical to our success. To safeguard our reputation and our brand, we hold ourselves to standards of ethical behavior that go well beyond legal minimums. Our ethical principles are: ? We are honest.
What we say is true and forthcoming — not just technically correct. We are open and transparent in our communications with each other and about our business performance. ? We are trustworthy. Our word is good. We keep our commitments to each other and to our stakeholders. We do the right thing without compromise. We avoid even the appearance of impropriety. ? We treat others with respect. We value their contributions and listen to their point of view. We maintain fairness in all relationships. ? We are courageous. We speak up for what is right. We report wrongdoing when we see it. We use good judgment. We think before we act. We use our purpose, values and ethical principles as decision filters to guide our behavior. ? We are responsible. We accept the consequences of our actions. We admit our mistakes and quickly correct them. We don’t retaliate against those who try to do the right thing by asking questions or raising concerns. However, the reality of Dell's business conduct does not match up with its rhetoric. As happens all too often, Dell, a large corporation allegedly provided unfair or misleading contractual agreements.
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Despite this code of conduct the company has faced the following during the time of the case: A California law firm has slapped Dell with a class action lawsuit charging the computer giant with "systematically deceiving" its customers. The New York Attorney General also filed a suit for the same issues. ? The case centers on the allegation that Dell advertises low prices for its computers, but people who try to purchase a machine at the advertised price find it's no longer available for that price. Often those customers wind up with another computer, the suit said.
One plaintiff is a San Francisco nurse who said she bought a Dell notebook computer listed at $599 along with an $89 printer, but was billed $1,352 for her order. ? Another plaintiff said Dell shipped him products of lower quality than the ones he had ordered from the company's Web site. The Round Rock, Texas-based PC maker then resisted his efforts to resolve the problem, he said. ? The suit also said that Dell and its lending partner CIT Bank change without notice financing packages promoted as "easy" and "preferred," to include much higher interest rates and hidden charges.
The class action challenged the financing practices of Dell, Inc. , Dell Financial Services, L. P. , and CIT Bank for imposing excess finance charges and late fees on consumers. ? The suit alleges that Dell has violated numerous California laws and codes of conduct, including the California Consumer Legal Remedies Act, the California Business and Professions Code and the Unruh Act. ? The New York complaint alleges Dell repeatedly failed to provide timely on-site repair as promised in service contracts and discouraged customers from seeking technical support.
The lawsuit claims Dell's New York customers calling the company's toll free support number were subjected to long wait times, frequent transfers and disconnections. Question 6. Dell has settled both cases with the two states. If you were Michael Dell, how would you resolve the differences between the Code of Conduct and the actions of Dell? Should Dell stop advertising low priced computers and then try to step up customers to pricier models or additional features dramatically increasing price to the consumer?
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