As business becomes more complex, many companies may face a large number of potential & operational corporate risks. Thus, Dell is not exceptional in this case. Several problematic issues for the company are:
- By engaging in a hedging strategy for foreign currency that was much risky, Dell faced difficulties in quality with a number of PC lines that were made by the contract manufacturers, which results in the decline of profit margin & switch of laptop PC buyers in 1993.
- Because of excessive low-profit margin & reasonably higher cost of production, it could not gain the customers market entirely.
- In recent times, Dell’s 29 million shares are owned by TCW Groups portfolio manager.
- Difficulties in keeping higher growth rate as a larger company because of snowball effect.
- The slight low growth rate of 17.8% than Hewlett-Packard of 17.9% once in the past.
- Tendency on a one-tricking pony that focuses on merely less innovation & establishment of sufficient new business.
- Charging 300million to cover the entire costs of Optiplex Desktop computer models, it involved two faulty parts that caused a malfunction & down the quality of the product.
- Departure of talented personnel like chief information officer.
- 25% decrease in stock price.
To minimize such risks, Dell should do the following:
- Increasing the growth of unit shipment.
- Introduction of high-tech servers in a motherboard.
- Originating more sophisticated software.
- Reduce the higher cost of production, getting customer support & performance.
- It should come up with heavy new ideas like a framework of making swift headway in other markets like networking, consumer electronics, storage etc.