Dell’s Potential Corporate and Operations Risks

Subject: Risk Management
Pages: 1
Words: 262
Reading time:
< 1 min

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.