Why did Dell fail in its first entry in laptops?
What will be an ideal response?
There are several reasons that students will point out.
• At the time Dell originally entered this market, customers were still not comfortable with its usage and required hand-holding to a much greater extent than what Dell could provide.
• Dell made the mistake of approaching product design with a desktop manufacturing mentality, leading to a poor design that could not handle tougher operating conditions. This led to more failures.
• Dell’s laptop was a “me-too” product with little or no differentiation from other products.
• Strong market leaders were already significantly ahead.
Overall, as is mentioned in the case on page 574, the laptop market was different from the desktop market in more ways than one. There will be several students who will point out that the situation in 1995 is very different from that in the early 1990s. Customers are more sophisticated, the technology is more advanced, and Dell has the requisite skills to develop a better laptop product in 1995. All these are reasons to suggest that Dell was unsuccessful the first time because of wrong timing, wrong product, and wrong market. However, this time all these issues are taken care of and Dell could be successful in this market. Add to this the fact that the laptop market is taking off in a big way and is expected to increase fivefold by 1998, and there are compelling reasons for getting back into this market.
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A) accrued revenues B) deferred expenses C) deferred revenues D) accrued expenses
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A) Value engineering occurs only after the product is selected and designed. B) Value engineering creates fragile design. C) Value engineering is oriented toward improvement of design. D) Value engineering occurs during production when it is clear the product is a success. E) Value engineering can save substantial amounts of product cost, but quality suffers.
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A. marginal tax B. operating cash flows C. current intrinsic value D. average cost of invested capital E. total capital invested