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Dell announced to bow out of stock market in 29th Oct. 2013 with $24.4 billion buyout. After one year, without spending on shares,Dell’s cash flow increased from 30 to 50 hundred million dollar expected in January . 2015,which enables to reduce liability from 180 to 150 hundred million. This allows Dell’s market value increases which shows the success of this decision .
I agree with this act due to following analysis of Dell’s circumstances. Initially,Dell wants to take a qualitative change including service type.which was not supported by shareholders. The Macro economics in America allows little profit for PC industry, this increases rivalry and threat of substitutes. Unlike Apply also selling phones, Dell has weakness that the key activity is solely producing PC .In addition, the rapid growth of T from PEST and threat from tablets rivals causes the sales of Dell declines in past 3 years. This situation put the change into high importance-emergency level which forces Dell to bow out of stock market. However, in the initial phrases it continues cost leadership strategy but” gross profit decreases by 72%”.In my opinion, This is still accessible as Microsoft offered 20 hundred million dollar loan with 11% investment turnover rate. This inspires me to think that since PC is a industry faced with high macro technology advance, the PC companies should use its diverse strength to meet the opportunity of cooperating with other firms ,which they can identify customers’ need clearly and enhance CSV by building supportive industry clusters with shared communication about technology. “If a company has software, for example, but doesn’t understand how to get it to market, or how to market it to a niche of potential customers, we’ll hook them up with someone who can help them do it” said by Mr. Mullen . The success of Dell’s start-up program with Fouders club50 also verify my idea.
reference:
http://boss.blogs.nytimes.com/2014/07/03/dell-expands-a-program-for-tech-start-ups/?_r=0