case study of dell company

How Dell’s strategy transformed it from a doomed player to leading the data revolution

Table of contents, here’s what you’ll learn from dell's strategy study:.

• How to sustain your company’s growth beyond its initial success.
• How a sober bet for the future fuels your conviction to win.
• How to think long-term and not sacrifice your future for short-term benefits.

Dell Technologies is a multinational technology company that designs, develops, and sells a wide range of products and services, including personal computers (PCs), servers, data storage devices, network switches, software, and cloud solutions.

The general public owns 58% of Dell Technologies, while private equity firms and institutions own the rest. Michael Dell is the founder, chairman, and current CEO.

Dell's market share and key statistics:

• Brand value of $26,5 billion
• Net Worth of $28.7 billion as of Jan 13, 2023
• Annual revenue of $105.3 billion for 2022
• Total number of employees: 133.000
• Total assets worldwide: $93 billion in 2022

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Humble beginnings: How did Dell start?

The story of every company starts with the story of its founder.

Usually, a great company has a great founder story behind it. And Dell Technologies certainly has one. Michael Dell’s story goes hand in hand with the story of the company he founded. By understanding the story of Michael, we can understand the company’s initial advantages and opportunities it pursued.

And like every great tech company story, Dell’s story starts in a college dorm room.

From stamps to startups: Michael Dell's early years and the birth of Dell

Michael Dell founded the company in college, but his entrepreneurial journey started much earlier.

He had an early interest in technology and business, and by the age of 12, he was already buying and selling stamps and coins to make extra money. As a teenager, he worked summer jobs where he learned by trial and error how demand and supply worked, how to be efficient, how to segment the market, and determine the most profitable persona to sell.

By the time he graduated from high school, he had saved up enough money to buy his own BMW and his first personal computer, an Apple and later an IBM.

But he was curious about the inner workings of these machines and, to his parents' horror, he took them apart, learning about the different components and how they worked together. He soon made a crucial discovery. IBM DIDN’T manufacture its own parts. Instead, it sourced them from other companies. This sparked an idea in Michael's mind - he could build his own PCs using the same components but at a lower cost and higher quality.

That idea didn’t come out of the blue.

Michael Dell was constantly educating himself on computers, how to build them, how they worked, and how to code. He followed all computer magazines at the time and attended every event in his neighborhood to network and learn the latest about the industry. In high school, he was already an expert, modifying his own PC and, once the word spread, customizing the PCs of professionals.

His first customers were friends and acquaintances who were impressed by his knowledge and expertise. Michael quickly realized that there was a demand for customized computers that were not available in the market. He began assembling machines with increased storage capacity and memory at a fraction of the cost of buying from big brands like IBM.

Doctors and lawyers were among his early customers, and word-of-mouth about Michael's high-quality and affordable PCs spread quickly.

He eliminated the middleman by buying components directly and assembling the machines himself, which allowed him to offer lower prices and better performance. By the end of his first year in college, Michael had a vendor's license, he was winning bids against established companies in the industry, and he incorporated his first company, “ Dell Computer Corporation .”

Dell’s direct-to-consumer strategy & how its corporate culture was formed

The company was growing frightfully fast, forcing the team to constantly change and evolve its processes.

Before the company had its second birthday, they had moved to bigger offices three times to accommodate its increased inventory, growing telephone needs, and physical or electronic systems. However, the company was still a high-risk venture and had a small capacity for expensive mistakes.

In those early days, the challenges Dell faced formed its processes and the core traits of its culture that are present to this day:

• Practicality and reduced bureaucracy. They did some things unconventionally, like having salespeople set up their own computers. That way, they gained first-hand knowledge of the technology and the customer’s pain problems (customers and salespeople were uneducated on the technology, so they shared the same problems).
• A “can-do” and “I’ll-pitch-in” attitude. Employees took substantial liberties with their “responsibilities.” Engineers would help with the overloaded manufacturing line, everyone would answer phone calls, salespeople would fulfill orders while taking new ones, etc.
• A sense of making a difference. Money was tight, so Dell employees wouldn’t mind solving secondary “needs” with cheap solutions like using cardboard boxes to throw their trash because they didn’t have trash cans.
• Direct relationships with the customers. Maybe one of the most important aspects of Dell’s culture and strategy. The company was talking at the same time with prospects and current customers on the phone. That way, it got first-hand feedback on what the market was currently asking for and was enjoying or not enjoying. That gave birth to Dell’s  “Direct Model.”

The company went to great lengths to build and maintain the direct model because it was one of its most important sources of competitive advantage. Where other companies had to guess what to build next, Dell was already on it because their customers were telling them.

There were clear advantages to the Direct model:

• Closed feedback loop. Dell was talking directly to prospects – no dealer costs – and had no need for inventory. Lower costs = lower prices = more customers. And with every new customer, Dell had another finger on the pulse of the market.
• A single salesforce. Focused solely on the end customer. There was no need to have salespeople to sell to dealers and then additional salespeople to sell to the customer.
• Specialization in sales. Dell sold to large corporations, and smaller customers, like SMBs, educational institutions, and individual consumers. But selling to these two different buyers, large corporations and SMBs, was incomparable. So, the company had different salespeople for different customer segments and thus offering the best customer support and experience.

But the model wasn’t without its disadvantages:

• The model wasn’t irreplicable. Dell was making IBM-compatible PCs and selling them directly to customers. This model wasn’t hard to replicate, and the market’s conditions favored the birth of competitors with the same model.
• Lack of credibility. It’s hard to make a $5,000 sale when the customer has never heard of you and you lack a physical store.
• Incompatibility. Dell’s PC had to be compatible with IBM’s. But they had multiple suppliers for their components and sometimes those components were incompatible. Designing high-quality machines that were outperforming and compatible with IBM’s was a challenge.

But these disadvantages didn’t stop the team. The company doubled down on customer support and service and developed a strong reputation around them. It advertised a 30-day money-back guarantee and educated its suppliers to make components based on Dell designs. They even started their first R&D attempts that gave them a  12-MHz  that was faster than IBM’s latest model, cheaper, and got them on the cover of the most prestigious magazine in the industry, the  PC Week .

Dell’s strategy was so effective that phone calls started coming in, urging them to accept capital and go public.

Only three years after the company’s birth in a college dorm room, Dell went public, raising $30 million with a market valuation of $85 million.

Key Takeaway #1: Build a coherent strategy beyond your initial differentiator to sustain growth

Most companies enjoy initial success due to an untapped opportunity in the market, from addressing a niche market to exploiting the weaknesses of major players.

But no company succeeds at growing beyond the limits of the initial opportunity if it doesn’t evolve and expand its competitive advantage. So when evaluating your next move, ask yourself:

• What is our current competitive advantage?
• How easily can our competition replicate it?
• How can we make it harder (if we can)?
• How can we expand our capabilities to strengthen our current competitive advantage?
• How can we develop new competitive advantages?
• What are the market trends and how can we adapt/take advantage of them before others?

The occasional bold move doesn’t hurt, either.

Recommended reading:   6 Competitive Analysis Frameworks: How to Leave Your Competition In the Dust

How Dell’s privatization led to a strategic triumph

In the first decade of the new millennium, the PC business was growing rapidly.

Computing power followed  Moore’s Law  and innovation cycles in hardware were less than 12 months long. At the same time, a new generation of software was spreading and the World Wide Web was expanding globally. Being a part of a growing industry, like the PC business back then, was lucrative. So naturally, many companies did well.

Dell was one of them. In 2000, the company became the world’s largest seller of PCs, having enjoyed a decade of skyrocketing sales.

However, in 2011, things changed. The PC global sales reached their peak and the next year was the first of an 8-year streak of decline that lasted until the pandemic hit.

That decline impacted Dell severely.

Navigating decline: Dell's strategy for a shrinking market

Dell was in deep trouble at the start of the previous decade:

• It had lost its position as a top PC seller in the US to its main competitor, HP.
• It came third in the global PC market share, behind HP and ACER.

Many believed that it was a dying company that would perish like Kodak or Motorola.

The PC market was shrinking and some experts were saying it was the beginning of its end. Dell was expected to be among the first casualties. The truth was that the PC industry wasn’t dying, but it was evolving – it was losing some of its traits and gaining new ones. The difference is subtle but also key. In a competitive arena, every alert player is aware of the market changes: declining sales, emerging trends, and other important facts. But how each player interprets them determines whether they’ll  formulate a winning strategy  or not.

The more substantial the changes, the more important the interpretation.

In 2012, the fact was that the PC business was declining. Every major player could see it with a single glance at their balance sheet. In Dell's case, the decline was even direr since its PC sales were down by double digits. The company desperately needed to turn things around. And only a bold strategic move could do that.

The company tried to bounce back up with some obvious but desperate moves:

• The introduction of the Streak “phablet.” An embarrassing attempt at creating a new product category between tablets and smartphones. Its design was bulky and its Android software unsuitable for the device, while its purpose was unclear to the consumer.
• Making Windows 8 its default operating system. Dell and Microsoft have been longtime partners, to the benefit of both companies. Unfortunately, their growing interdependence meant that when one failed, it dragged the other one down. Windows 8 failure dragged down Dell and further decreased its PC market share.
• Attempts to enter the tablet and smartphone markets: the “Venue” debacle. Dell was always viewed as a PC company, not a technology company, making it harder to expand to new categories. Its first smartphone, the  Venue , ran on Windows Mobile and it never got any traction. As a result, the company abandoned the categories and, even today, it has less than negligible presence in these markets.

But where people saw a vulnerable company, Michael Dell saw an opportunity.

He had an assumption, a vision attached to it, and a plan to make it a reality. But he had no way to execute it with the company’s organizational structure at the time.

The obstacles to implementing Dell's competitive strategy

Dell’s strategy was to go on the offensive. He wanted the company to be highly aggressive by:

• Becoming competitive in the PC business again.
• Expanding its services and software solutions.
• Increasing its sales capacity.

Dell aimed to achieve these goals by investing heavily in R&D, gaining tighter control over its PC and server prices, and expanding its sales workforce. The idea was to fund new business capabilities in the software and services space from Dell's PC segment. That was a bold plan that involved a lot of changes and, thus, a lot of risks.

Dell’s strategy was essentially a  business transformation  proposal.

And although a lot of public companies have successfully gone through a transformation, none did it in such a short period of time without sacrificing the short-term faith of its shareholders. And that was exactly the problem.

The strategy was inherently risky – like every  good strategy  is – as it promised capital expenditure and an immediate decrease in profitability due to increased operating expenses. Things shareholders hate. And if shareholders aren’t happy with the company’s near-term returns, they start selling their shares, and the company loses its value and a good portion of its funding capabilities. 

Short-term risk = lower share prices = less funding for the company

Thus, the strategy was impossible to execute without the support of the shareholders. So the company had only two options: gain the support of the shareholders or go private.

Dell chose to go private.

Dell's game-changing decision was based on a strategic bet

For a gigantic public company with a market cap of nearly $20 billion, going private is a tough decision and a complicated process.

But it was an unavoidable preliminary for the successful execution of Michael Dell’s plan. And the first step was to convince the board of the necessity of the transformation. After announcing his idea, the board started discussions with experts to evaluate the move, i.e. top consulting agencies and other independent third parties.

JP Morgan , Boston Consulting Group, Evercore, and Debevoise were some of the names involved. And they all shared the same view:

• The PC is dying.
• Funding a business transformation from a declining business is a bad idea (despite such successful attempts from  IBM  and  BMW  in the past).

The experts had a lot of facts and strong arguments to support their case. However, all of them were based on a single assumption:  tablets and smartphones will replace the dying PC . The growth in those categories would entail a decline in the PC business. They believed the PC was about to be cannibalized.

Dell’s CEO disagreed. What was his assumption?

He believed that tablets and smartphones wouldn’t take away from PCs but rather add to it. He believed that the PC’s central role in productivity and business wasn’t going to be dethroned by the new shiny toys. People would buy and use tablets and smartphones, but PCs would remain their primary productivity tool.

And he would bet Dell’s future on it.

But he had to convince the board of directors first. At the start, conversations were happening in secret and things were moving slowly but steadily. But when the idea was leaked, two new problems presented themselves.

The first was Carl Icahn, who contested for the ownership of Dell.  Carl Icahn is a self-proclaimed “activist investor” but others call him a “corporate raider.” The closer the go-private initiative was to happen, the more Carl Icahn fought for it. And he used every improper tool and method he could muster. The battle that followed between Carl and Michael delayed the deal and almost derailed it.

The second was Dell’s customers’ hesitation in doing business with the company.  The rumors about the go-private initiative left the customers wondering about the future of Dell and doubted whether any kind of investment in it was worth it. They were suspending purchases and all Dell’s leadership could say was, “We don’t comment on rumors and speculations.”

The press had also concluded that the go-private initiative was a declaration of Michael Dell’s incompetence and a desperate attempt to keep Wall Street’s eyes away from its demise.

History would prove them wrong and crown Michael Dell victorious.

A new chapter: How Dell's go-private move set the stage for future success

The deal happened.

In February 2013, Michael Dell and the investment firm of Silver Lake took Dell private in a leveraged buyout of $24.4 billion, at $13.65 a share.

Despite all the time that passed until Dell could fully execute its strategy, the company didn’t remain idle. It had made several calculated moves to significantly reduce its dependence on the declining PC market before the deal conversations ever happened.

From 2007 to 2012, Dell spent north of $12.40 billion in key acquisitions to increase its enterprise software and hardware solutions, including cloud data storage and management. The acquisitions focused on areas like:

• Data storage
• Systems management
• Data management in healthcare
• Cutting edge software

The company had already started severing the connection between its financial health and its PC market share many years ahead of its privatization.

But after the buyout, it went all in. Speed and agility became its prominent advantages. Dell became, nearly overnight, a hungry, quick, and ready-to-attack-its-prey jackal. Whenever a new opportunity arose and people asked for resources to pursue it, leadership committed double the resources and said, "Go faster!"

For example, SMBs (small and medium businesses) presented a gigantic opportunity. So the company increased its sales workforce, retrained its existing salespeople, and hit endless SMB doors. They would enter a business selling their low-margin PCs and simultaneously become their trusted advisor on all things tech. Then they sold their whole portfolio of solutions.

And the morale of employees was off the charts. Leadership kept their promises on the changes and provided all the support their people needed to execute the plan.

In addition, people started viewing PC and smartphones as complementary, just as Dell expected.

Was Michael Dell’s bet a good one? Well…

45% of Dell’s revenue was generated from PC sales, but 80% or more of its profits were generated by its new solutions. Eight years after the privatization, the value of their equity had increased more than 625% and their enterprise value reached $100 billion.

We’re pretty confident that’s a yes.

Key Takeaway #2: Successful strategic bets require a sober conviction

Markets change and evolve all the time. The difference between players that emerge prosperous and those that struggle to fit in the new order of things isn’t the unique access to data.

No. Every alert player in your competitive zone has more or less the same access to market trends and changes. The difference lies in what you envision the future to be. That’s your bet.

That’s what a winning corporate strategy needs. And because bets are inherently risky, you require two things to place a successful bet:

• Sobriety to envision what the future of your industry will look like.
• Conviction to pursue that vision relentlessly.

Steering towards success: Dell's current strategy and the EMC merger

Michael Dell had foreseen the evolution of the technology industry since the 2000s.

Not the specifics, but the trend of PCs and hardware becoming less relevant – or at least less profitable – and software, the cloud, and back-end taking the front seat. He realized (from very early on) that servers and storage management would become a huge concern for large enterprises building (or upgrading) their IT infrastructure.

Dell anticipated the market’s needs by making a simple observation: the quantity of data in the world expanded exponentially and the traditional way of data management would require server performance that wasn’t physically possible to achieve. But he knew there was a solution underway: virtualization – software that mimics the computer, creating virtual mainframes within the physical mainframe.

That’s why the company had started investing in these technologies since 2001.

Achieving synergy: Dell's competitive strategy and the merger with EMC and VMware

Dell, EMC, and VMware are three major players in the technology industry with distinct but complementary offerings.

EMC  had a successful product in networked information storage systems, i.e. a database management system for enterprises.

VMware  was pioneering in virtualization, allowing users to run multiple operating systems on the same device.

Dell  had an established distribution network and a series of back-end solutions that could expand and fit well with the former technologies.

The relationship between these three companies started in 2001. Dell and EMC entered a strategic alliance to rule a market of $100 billion worth by 2005.

For EMC, the alliance was a one-stone-three-birds initiative.  First,  it offered a lucrative distribution channel to customers their competitors were already targeting.  Second,  it ensured Dell wouldn’t partner with a competitor.  And third,  it reduced its supply costs for components.

For Dell, it also had a threefold benefit.  First,  It added high-performing products to a rapidly growing business.  Second,  it gave it an important customer – EMC was using Dell’s servers.  And third,  it allowed Dell to infiltrate deeper into enterprise data centers.

A strategic alliance that gave both Dell and EMC a competitive edge.

Then EMC bought VMware. That gave the company massive capabilities around cloud infrastructure services ending up being a very lucrative move. Dell, which had invested in VMware back in 2002, saw a massive opportunity to acquire the new EMC.

So Dell and EMC first began discussions of a potential partnership back in 2008, but the idea was ultimately shelved due to the financial crisis. However, in 2014, Dell revisited the idea as both companies had grown and become leaders in their respective industries.

Dell saw the potential for a merger as the two companies' services would bring significant value to their customers when combined. EMC's CEO, Joe Tucci, agreed with this assessment, but they still had to convince EMC's board. EMC was publicly held while Dell was private, and as soon as the idea was on the table, Dell found itself competing with two other interested parties, Cisco Systems and HP. In fact, HP nearly succeeded in acquiring EMC.

It failed due to a financial disagreement. So Dell jumped on the opportunity.

By then, EMC had grown tremendously and had eliminated any short- to mid-term potential start-up disruptors by acquiring them. EMC’s three businesses were uniquely complementary to Dell’s solutions:

• EMC Information structure , a leader in the data storage system market.
• VMware , the undisputed leader in virtualization.
• Pivotal , a start-up with a platform to develop cloud software.

However, the acquisition was a tough process. EMC had grown to a market cap of over $60 billion. It was impossible for Dell to fund an acquisition. Instead, the two companies merged.

The merger happened through a complex but effective financial plan, and the synergies created by the combined company increased revenue significantly. A year after the merger was initiated, the added revenue was well above expectations. This allowed Dell to pay down a significant portion of its debt and improve its financial standing and investment rating. The success of the merger led the company to simplify its structure and align the interests of the stakeholders of the three companies.

In 2018, Dell went public again as a very different entity than its first IPO, uniquely equipped to lead the 5-S sectors:  services, software, storage, servers, and security.

What is Dell’s business strategy’s primary focus today?

Dell aspires to become a leading player in the data era by providing a wide range of solutions, products, and services.

Excluding VMware, Dell is divided into two main business segments supported by its financial subsidiary:

• The Infrastructure Solutions Group ISG helps customers with their  digital transformation  by providing multi-cloud and big data solutions that are built on modern data center infrastructure. These solutions are designed to work in multi-cloud environments and can handle workloads in public and private clouds as well as on-premise.
• The Client Solutions Group CSG focuses on providing solutions for clients such as laptops, desktops, and other end-user devices. ‍
• Dell Financial Services DFS supports Dell businesses by providing financial options and services to customers according to the company’s flexible consumption models. Through DFS, the company tries to tailor its financial options to each customer’s way of consuming Dell’s solutions.

Dell's core offerings include servers, storage solutions, virtualization software, and networking solutions. The company is constantly investing in research and development, sales and other key areas to improve its products and solutions and to drive long-term growth.

Its primary strategic priorities are:

• Improving and modernizing its current offerings in the markets it operates in.
• Expanding into new growth areas such as Edge computing, telecommunications, data management, and as-a-service consumption models.

And its plan involves several key  initiatives :

• Developing its flexible consumption models and as-a-Service options to customers to meet their financial needs and expectations.
• Building momentum in recurring revenue streams through multi-year agreements.
• Investing in R&D to develop scalable technology solutions and incorporating AI and machine-learning technology. Since its Fiscal year 2020, the R&D budget is consistently at least $2.5 billion. Most of it goes towards developing the software that powers its solutions.
• Collaborating with a global network of technology companies for product development and integration of new technologies.
• Investing in early-stage, privately-held companies through Dell Technologies Capital.

Although Dell has a coherent strategy to achieve its objectives, competition isn’t idle nor trivial in the core competitive arenas. The company faces a significant risk that includes:

• Failure to achieve intended benefits regarding the VMware spin-off.
• Competition providing products and services that are cheaper and perform better.
• Delays in products, components, or software deliveries from single-source or limited-source suppliers.
• Inability to effectively execute its  business strategy  (transitioning sales capabilities, expanding solutions capabilities through acquisitions, etc.) and implement its cost efficiency measures.

The technological advances are rapid, and players are in a constant race to innovate not only on the technologies they provide but on their business models and all of their services and solutions. Emerging players and strategic relationships between competitors could easily shift the competitive landscape before the company finds a way to react.

Key Takeaway #3: When making transformational decisions, prioritize thinking long-term

A major acquisition, or a merger, between industry leaders is a bet on the industry’s future.

If you believe in the bet long-term, don’t sacrifice a good move for short-term returns, as HP did with EMC. Instead, do your due diligence in the consideration phase:

• Consider real alternatives.
• Understand deeply how the capabilities of both companies will be improved.
• Validate your assumptions with current market needs and trends.
• Move faster than the competition.

Why is Dell so successful?

One of the key reasons Dell has been so successful is Michael Dell’s intuition and strategic instinct.

He demonstrated a consistent ability to take an accurate pulse of the market, make a winning bet and chase it relentlessly by performing a business transformation. Additionally, Dell never lost one of its core strategic strengths: building strong relationships with its customers by providing excellent customer support and tailored solutions to meet their unique needs. The company has also been successful in streamlining its  operations  and supply chain, which has allowed it to offer competitive prices and high-quality products.

Dell puts the customer first and makes strategic pivots with perfect timing.

How Dell’s vision guides its steps

According to Dell’s annual report, its vision is:

“To become the most essential technology company for the data era. We seek to address our customers’ evolving needs and their broader digital

transformation objectives as they embrace today’s hybrid multi-cloud environment.”

And their two strategic priorities, growing core offerings and pursuing new opportunities, are their roadmap to achieving it.

Growth by numbers

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24 Dell: The Business Case for a Sustainable Supply Chain

• Published: March 2021
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The computer manufacturer Dell runs the world’s largest electronics take-back programme. It has recovered more than 800,000 tonnes of electronics since 2008. In the case of individual consumers it partners with freight companies in retrieving equipment from consumers’ homes and partners with Goodwill, a not-for-profit organization that seeks to make people independent through education and training, in running 2,000 locations across the United States where consumers can drop off any brand of used electronics. The article points to the commercial as well as the environmental savings resulting from the recycling programme and describes the process by which Dell has been able to achieve this.

Introduction

Dell is one of the world’s largest computer manufacturers and technology companies. The company sells a wide range of IT hardware, software products, and services for enterprise, government, small business, and consumer markets. 1 As a privately held company, Dell has the freedom to pursue a longer time horizon and to commit to changing how it uses its resources. The principle of efficiency is central to the Dell business model and informs the company’s approach to resources, sourcing, and waste management.

Pain Points in the Ecosystem

Dell’s commitment to efficiency has prompted the company to take on the timely challenge of improving e-waste disposal throughout its business.

E-waste, that is, discarded electrical and electronic equipment, is the world’s fastest-growing waste stream. 2 Rapid technology innovation and ever-shortening product lifespans are contributing to the increase of e-waste. 3 According to a United Nations’ University report, the amount of global e-waste reached 41.8 million tonnes in 2014. 4 To compound matters, e-waste has a low overall recycling rate, which means that unwanted equipment remains unused.

Responsible e-waste disposal is not only important from an environmental perspective, but also makes good economic sense. 5 Vast amounts of gold, for example, exit the economy due to low recycling rates, but increasingly there is an opportunity to recapture that value, as a tonne of computer motherboards contains more gold in it than a tonne of gold ore. In terms of scale, the material value of global e-waste was estimated to be €48 billion in 2014 alone. 6 This underutilized resource has a vast ‘untapped potential to create a more sustainable, efficient product ecosystem’. 7

The circular economy takes the traditional, linear model of ‘take, make, and dispose’—which moves products from design to factory to consumer to landfill—and bends it into a more efficient closed-loop ecosystem. Unwanted used electronics can be taken back for refurbishment and then resold on the secondary market. Products beyond repair, or those that are no longer economical to repair, are recycled to allow for precious and scarce materials to be recovered. Recycled content can either be incorporated into the design and manufacturing of new products or sold for others to use.

Research shows that approximately 30 per cent of consumers have technology products lying around the house unused, and half of consumers are unsure about what to do with their old electronics. 8 According to Dell, similar situations exist with businesses warehousing old equipment. Take-back options make it easy for a wide variety of customers to dispose of their old electronic products in a responsible manner. This measure ensures that unwanted electronics get reused or, if at the end of life, properly recycled.

Plastic is one of the most useful and important materials in modern society. It is popular in computers due to its durability, ease of fabrication into complex shapes, and electrical insulation qualities. 9 However, plastic recycling remains challenging and, as a result, the material constitutes a major contributor to landfills and to nonpoint source pollution—pollution from many different sources. The production of traditional plastics also uses a substantial amount of fossil fuels. Manufacturing plastics from fuel is resource intensive, requires large amounts of energy, and releases relatively high levels of CO 2 emissions in the process. Recent research has shown that our current use of plastics will become unsustainable if we do not take steps to improve recycling and reduce plastics’ usage.

Using secondary, recycled plastic as feedstock for new computers presents one possible solution. With the fast pace of innovation and product upgrades in the ICT sector, recycled content can reduce the environmental toll of manufacturing with virgin materials. The circular economy and the development of secondary raw material markets are high on the European agenda. Nevertheless, it remains challenging to find a sufficient supply of high-quality post-consumer recycled plastics that meets the technical, economic, and aesthetic requirements of ICT products manufacturers. 10

In response, Dell is taking steps towards creating a ‘circular’ supply chain (see also Interface, Chapter 25 ). In addition to environmental concerns, the increased volatility in commodities and growing pressure on resources have alerted Dell to the business necessity of rethinking materials and energy use. 11 In 2013, Dell committed to putting a total of 50 million pounds weight of recycled materials back into its products by 2020. The company reached this goal at the beginning of 2017 and is continuing to scale its efforts.

For Dell, sourcing post-consumer recycled plastics from the market and building a new, stable closed-loop supply chain for plastics from used electronics collected through take-back programmes present viable and affordable alternatives to using virgin materials. Rather than focusing exclusively on individual challenges, Dell has taken steps to approach their supply chain from a broader, systemic perspective. Most recently, this has included expanding its efforts to also address precious metals, such as gold. Jennifer Allison, director of supply chain sustainability at Dell, summarizes the company’s current business strategy:

We’re talking about systems—not just products, programmes, or initiatives. Looking at the whole system is when change begins to make a significant difference. Technology is a great tool for measuring and analysing systems, understanding processes, and identifying inefficiencies. 12

In this way, Dell takes a whole ecosystem view of its product life cycles. This approach is transforming the design of products and services. Dell’s life-cycle approach aims to keep viable products and parts in circulation for longer periods of time. It also harnesses global efforts to reuse, refurbish, and resell products and parts to extend their lifetimes and to recycle them at the end of life.

Product design emphasizes ease of repair and recyclability from the beginning. Dell also looks continuously for ways to incorporate sustainable materials, such as recycled plastic and reclaimed carbon fibre, into products and packaging. 13

The Take-Back Programme

Dell has the world’s largest electronics take-back programme, which spans more than seventy-five countries and territories. The programme has recovered approximately 800,000 tonnes of electronics since 2008. For commercial customers, Dell offers a full-spectrum of logistics and disposal capabilities via the Asset Resale and Recycling Service. Current capabilities include data security, on-site shredding, recycling, and full traceability reporting. Dell also makes it easy for individual consumers to recycle by partnering with freight companies to provide free mail-back recycling of Dell-branded equipment. In many countries, the programme will even pick up used equipment from a customer’s home. 14

Another programme designed to make the recovery of obsolete electronics easier and more accessible is the Dell Reconnect Partnership with Goodwill, a not-for-profit organization committed to helping people become independent through education and training. The Reconnect Programme allows people to drop off any brand of used electronics to more than two thousand participating Goodwill locations across the United States. Dell Reconnect accepts any brand of computer equipment in any condition from consumers and provides free recycling services.

Dell returns all proceeds to Goodwill in order to help support Goodwill’s mission of putting people to work. 15 By participating in this initiative, customers simultaneously help protect the environment, benefit the community, and receive a receipt for tax purposes. In this way, the programme helps both the customers and the business.

The donated equipment has value as a whole system, as parts, and sometimes as raw materials such as metals, plastics, and glass. 16 If the equipment can be refurbished, Goodwill sells it. If not, the end-of-life product is sent to Wistron, one of Dell’s recycling partners, for asset recovery in the United States. Metals such as tin, gold, 17 and tungsten are re-sold in the commodities market. To complete the closed loop, plastics are sorted and shipped to China, turned into pellets, and mixed with virgin plastics for use in new Dell products. 18

Closed-Loop Recycled Plastic Supply Chain

Dell’s 2020 ‘Legacy of Good’ sustainability plan set the goal of incorporating 50 million pounds weight of post-consumer recycled-content plastics and other sustainable materials into Dell products by 2020. 19 Dell met this target ahead of schedule in early 2017.

It started with the launch of Dell’s closed-loop recycled plastics supply chain in 2014. Since then, the company has used more than 9,750 tonnes of closed-loop plastics in over 125 products. These products include flat-panel monitors, desktops, and all-in-one computers.

Run in conjunction with various supply chain partners, the programme consists of collecting, recycling, and using e-waste to make new Dell products. 20 It begins with sorting plastics out of the various take-back streams, further processing them, and then sending them to a manufacturing partner in Asia. The plastics are then melted down and moulded into new parts and computer components, thereby creating a closed-loop system. The whole process—from the time the equipment is received for recycling to the time the plastics are back in a customer’s hands as part of a new product—takes just under six months. The closed-loop system also provides businesses with a price more stable than the cost of virgin materials, which fluctuates with the price of oil. It also reduces the company’s dependence on those environmentally costly virgin materials. Furthermore, by reusing plastics already in circulation, Dell cuts down on e-waste, reduces carbon emissions, and helps drive a circular economy for IT. The closed-loop process yields an 11 per cent lower carbon footprint than a process using virgin materials, 21 and creates products that are better for the environment, which is increasingly what Dell customers demand. 22 Dell was also the first PC manufacturer (January 2018) to use recycled gold from e-waste in its products. Working with the data analyst TruCost, it found that this closed-loop process can cause 99 per cent less environmental damage and avoid $1.6 million in natural capital costs per kilogram processed (US$3.68 million for the pilot project alone) when compared to gold mining. The same study showed closed-loop process can avoid 41 times the social impacts of gold mining.

Dell’s leadership in recovering and reusing plastic from used computers constitutes an important step in moving the larger electronics industry towards a circular economy. Louise Koch, corporate sustainability director in EMEA for Dell, describes the impetus for initiating a closed-loop system:

Dell’s programme is driven by both an effort to improve efficiency—a principle that goes back to its founding ethos and business model—as well as a commitment to reducing environmental impact. 23

The use of closed-loop plastics may create a demand for plastic from used computers and thereby increase the level of plastic recycling from electronics. This, in turn, generates new jobs and opportunities for those in the nascent industry, all while staying true to Dell’s founding principles.

Challenges in Moving to a Closed-Loop Recycling System

In moving from the traditional take–make–dispose linear supply chain to a circular supply chain, Dell has had to overcome a number of hurdles.

One of the biggest challenges that Dell faced with the closed-loop recycling was identifying which types of plastic can be incorporated back into new products. As Scott O’Connell, director of environmental affairs for Dell, puts it, ‘When dealing with plastics, getting the properties equivalent or better to virgin materials isn’t easy…But this is a challenge we’ve been able to overcome with engineering know-how.’ 24 Dell worked with partners to test different approaches. Testing revealed that, due to mechanical and aesthetic considerations, a blend of recycled-content with virgin plastic produces the best outcomes.

Another challenge involves establishing a reliable closed-loop supply chain. As O’Connell describes, ‘We had to make sure that we had sufficient volume of product coming in to be able to yield enough plastics to put into a mainstream Dell product.’ 25 Supply of products and plastic derives from Dell’s own sources, which adds a greater degree of insight and security. However, for the closed-loop recycling to work and scale, Dell needs security of supply, which can be difficult to attain with fluctuating numbers of products collected through take-back. Shrinking form factors—the fact that there is less plastic per item recycled as electronics become smaller—further complicate the situation. Hence Dell needs to continue to drive increasing participation in take-back programmes, while at the same time exploring other means of acquiring recycled-content materials.

Transporting materials poses an additional challenge. Dell customers are all over the world, which means that take-back initiatives must accommodate the global scale. While Dell has a small closed-loop plastics supply chain in Europe already and is exploring ways to scale in other geographies, materials need to be collected in sufficiently large amounts to make shipping to a centralized processor worth the economic and environmental costs. This involves logistics, regulations, and other considerations. In some cases, even the definition of the material being moved can affect the viability of closed-loop efforts: is recycled plastic labelled as waste or a raw material, for example?

The final challenge for Dell is to demonstrate the benefits of closed-loop recycling to customers. Ultimately, the products look and perform exactly the same as those made from virgin materials. Dell must communicate the value proposition to customers by highlighting the amount of recycled content in the final product, the closed-loop nature of the materials, and the benefits to the customers’ own sustainability goals.

Performance

Since 2008, Dell has taken back more than 1.76 billion pounds (nearly 800,000 tonnes) of used electronics and since mid-2014, when Dell launched the closed-loop plastic recycling programme, it has created nearly 5,000 tonnes of plastics from recycled computer parts. Dell has saved more than $1.8 million from this process, and the carbon footprint of circular plastics is 11 per cent smaller than that associated with the manufacture of virgin plastics. Dell now uses circular plastics in approximately 125 products across millions of units globally.

Together with TruCost, Dell has completed an evaluation to understand the gains from moving away from virgin plastics. One of the most useful ways for companies to assess the risks associated with new initiatives is to quantify the environmental impacts generated by their activities—internal operations, upstream supply chain, and downstream product use and disposal—and then convert those impacts into monetary values. 26 The monetary value helps identify the value not captured in traditional financial markets and incorporates these considerations into decision-making. 27

Findings showed that Dell’s closed-loop plastic has a 44 per cent ($1.3 million annually) greater environmental benefit than virgin ABS plastic. 28 In particular, increased computer recycling lessened environmental impacts. The research found that recovering and recycling the used plastics from computers minimized ‘human health and ecotoxicity impacts’ and reduced the overall emission of hazardous substances. 29

Dell has also begun to incorporate social impact metrics into its valuation framework. 30 Emergent strategies such as analysing activities for their use of social and human capital are likely to be an area for further refinement and application in the future. 31 At present, Dell is combining both environmental and social impact metrics into its process in order to help tackle the challenge of responsible e-waste disposal.

On a global scale, there is still huge potential to scale up circular resource streams in the IT sector and beyond. Only 10 per cent of the plastics produced today are recovered—and more than 50 per cent end up in landfills.

Dell has increased the use of recycled materials (both closed-loop and traditional post-consumer recycled materials) in new products and plans to continue to scale the programme.

As Dell continues to scale the current programme, it will look to expand into reclaiming and reusing other materials. Dell has already had success with using reclaimed carbon fibre for products and is currently using recycled ocean plastics ink made from captured diesel emissions for packaging.

Dell will also look at how ocean plastics or other solutions can be used with products.

Dell will continue to measure social impact using the same methodology, updating models for collection totals to follow form-factor trends. It will report progress annually, building on this total toward a cumulative 2 billion pounds by 2020. 32

Dell continues to lead conversations with governments and industry partners about recycling and circular loops on a global scale. Dell is open to innovative collaborations with even more customers, partners, and governments in the coming years. Dell sees particular opportunities in creating partnerships in developing countries to strengthen this ecosystem.

Dell’s take-back programme presents a compelling example of the potential of circular economy and closed-loop systems to contribute to responsible, mutual business practices. Looking towards the future, creating closed-loop recycling programmes in developing countries represents a new frontier. Recycling products in the countries from which they are recovered brings skilled jobs, creates industry, and strengthens the local economy. 33 Using its proven abilities to leverage partnerships and government relationships to create the infrastructure needed for new programmes, Dell can continue driving a culture of recycling in communities around the world. 34 As Dell’s programme example highlights, collaborative approaches have the potential to create both financial and environmental savings for corporations and customers on a global scale.

‘Dell Inc. at a Glance,’ Company Profile, Vault.com, http://www.vault.com/company-profiles/computer-hardware/dell-inc/company-overview .

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‘Best Practices in Recycled Plastic,’ DigitalEurope , August 2016, http://www.digitaleurope.org/DesktopModules/Bring2mind/DMX/Download.aspx?Command=CoreDownload&EntryId=2276&language=en-US&PortalId=0&TabId=353 .

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‘Dell on the Circular Economy’, March 2016, http://i.dell.com/sites/content/corporate/corp-comm/en/Documents/circular-economy-0316.pdf .

‘Dell Recycling,’ Dell Inc., http://www.dell.com/learn/us/en/uscorp1/dell-environment-recycling .

‘About Us,’ Goodwill Industries International, Inc., http://www.goodwill.org/about-us/ .

‘Dell Reconnect—How It Works’, Dell Inc., http://www.dell.com/learn/us/en/uscorp1/corp-comm/how-it-works-reconnect .

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Louise Koch (Corporate Sustainability Lead for Europe, Middle East and Africa), personal communication.

Scott O’Connell (Dell, Director of Environmental Affairs), interviewed by Mike Hower (Hower 2015)

Dell, Dell Inc., http://www.dell.com/en-us/ .

‘Valuing the Net Benefit of Dell’s More Sustainable Plastic Use at an Industry-Wide Scale’, Trucost, September 2015, http://i.dell.com/sites/content/corporate/corp-comm/en/Documents/circular-economy-net-benefits.pdf .

‘Dell 2020 Legacy of Good Plan,’ Dell Inc., http://i.dell.com/sites/doccontent/corporate/corp-comm/en/Documents/2020-plan.pdf

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Case study: Dell—Distribution and supply chain innovation

Read the highlights

• Cutting out the middleman can work very well.
• Forgoing the retail route can increase customer value.
• Re-examine & improve efficiency for process/operations.
• Use sales data and customer feedback to get ahead of the curve.

In 1983, 18-year-old Michael Dell left college to work full-time for the company he founded as a freshman, providing hard-drive upgrades to corporate customers. In a year’s time, Dell’s venture had $6 million in annual sales. In 1985, Dell changed his strategy to begin offering built-to-order computers. That year, the company generated $70 million in sales. Five years later, revenues had climbed to $500 million, and by the end of 2000, Dell’s revenues had topped an astounding $25 billion. The meteoric rise of Dell Computers was largely due to innovations in supply chain and manufacturing, but also due to the implementation of a novel distribution strategy. By carefully analyzing and making strategic changes in the personal computer value chain, and by seizing on emerging market trends, Dell Inc. grew to dominate the PC market in less time than it takes many companies to launch their first product.

No more middleman: Dell started out as a direct seller, first using a mail-order system, and then taking advantage of the Internet to develop an online sales platform. Well before use of the Internet went mainstream, Dell had begun integrating online order status updates and technical support into their customer-facing operations. By 1997, Dell’s Internet sales had reached an average of $4 million per day . While most other PCs were sold preconfigured and pre-assembled in retail stores, Dell offered superior customer choice in system configuration at a deeply discounted price, due to the cost-savings associated with cutting out the retail middleman. This move away from the traditional distribution model for PC sales played a large role in Dell’s formidable early growth. Additionally, an important side-benefit of the Internet-based direct sales model was that it generated a wealth of market data the company used to efficiently forecast demand trends and carry out effective segmentation strategies. This data drove the company’s product development efforts and allowed Dell to profit from information on the value drivers in each of its key customer segments.

Virtual integration: On the manufacturing side, the company pursued an aggressive strategy of “virtual integration.” Dell required a highly reliable supply of top-quality PC components, but management did not want to integrate backward to become its own parts manufacturer. Instead, the company sought to develop long-term relationships with select, name-brand PC component manufacturers. Dell also required its key suppliers to establish inventory hubs near its own assembly plants. This allowed the company to communicate with supplier inventory hubs in real time for the delivery of a precise number of required components on short notice. This “just-in-time,” low-inventory strategy reduced the time it took for Dell to bring new PC models to market and resulted in significant cost advantages over the traditional stored-inventory method. This was particularly powerful in a market where old inventory quickly fell into obsolescence. Dell openly shared its production schedules, sales forecasts and plans for new products with its suppliers. This strategic closeness with supplier partners allowed Dell to reap the benefits of vertical integration, without requiring the company to invest billions setting up its own manufacturing operations in-house.

Innovation on the assembly floor: In 1997, Dell reorganized its assembly processes. Rather than having long assembly lines with each worker repeatedly performing a single task, Dell instituted “manufacturing cells.” These “cells” grouped workers together around a workstation where they assembled entire PCs according to customer specifications. Cell manufacturing doubled the company’s manufacturing productivity per square foot of assembly space, and reduced assembly times by 75%. Dell combined operational and process innovation with a revolutionary distribution model to generate tremendous cost-savings and unprecedented customer value in the PC market. The following are some key lessons from the story of Dell’s incredible rise:

1. Disintermediation (cutting out the middleman): Deleting a player in the distribution chain is a risky move, but can result in a substantial reduction in operating costs and dramatically improved margins. Some companies that have surged ahead after they eliminated an element in the traditional industry distribution chain include:

• Expedia (the online travel site that can beat the rates of almost any travel agency, while giving customers more choice and more detailed information on their vacation destination)
• ModCloth (a trendy virtual boutique with no bricks-and-mortar retail outlets to drive up costs)
• PropertyGuys.com (offers a DIY kit for homeowners who want to sell their houses themselves)
• iTunes (an online music purchasing platform that won’t have you sifting through a jumble of jewel cases at your local HMV)
• Amazon.com (an online sales platform that allows small-scale buyers and sellers to access a broad audience without the need for an expensive storefront or a custom website)
• Netflix (the no-late-fees online video rental company that will ship your chosen video rentals right to your door)

2. Enhancing customer value: Forgoing the retail route allowed Dell to simultaneously improve margins while offering consumers a better price on their PCs. This move also gave customers a chance to configure PCs according to their specific computing needs. The dramatic improvement in customer value that resulted from Dell’s unique distribution strategy propelled the company to a leading market position.

3. Process and operations innovation: Michael Dell recognized that “the way things had always been done” wasn’t the best or most efficient way to run things at his company. There are countless examples where someone took a new look at a company process and realized that there was a much better way to get things done. It is always worth re-examining process-based work to see if a change could improve efficiency. This is equally true whether you’re a company of five or 500.

4. Let data do the driving: Harnessing the easily accessible sales and customer feedback data that resulted from online sales allowed Dell to stay ahead of the demand curve in the rapidly evolving PC market. Similarly, sales and feedback data were helpful in discovering new ways to enhance customer value in each of Dell’s key customer segments. Whether your company is large or small, it is essential to keep tabs on metrics that could reveal emerging trends, changing attitudes, and other important opportunities for your company.

See additional learning materials for distribution .

Summary: Dell combined operational and process innovation with a revolutionary distribution model to generate tremendous cost-savings and unprecedented customer value in the PC market.

Read next: customer discovery: identifying effective distribution channels for your startup.

Strickland, T. (1999). Strategic Management, Concepts and Cases . McGraw Hill College Division: New York.

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Case Study - Dell

Dell is an American privately owned multinational technology company based in Round Rock, Texas offering technology solutions for every person at every age and in every profession. Dell’s Principal Environmental Strategist, John Pflueger, tells us more about their science-based targets here.

For more than 30 years, Dell has played a critical role in transforming computing, enabling more affordable and more pervasive access to technology around the world. Named after its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 100,000 people worldwide. In 2015, Dell was the third largest PC vendor in the world.

We spoke to Dell’s Principal Environmental Strategist, John Pflueger, about the company’s journey to setting a science-based target.

Why did you set a science-based target?

Back in 2011 we were reviewing our approach to sustainability and we realised that we had been being more reactive than proactive in terms of what we chose to tackle and why. We decided to change this: to become more proactive, and expand our field of view, with customers at the centre of our decisions.

We had had goals in the past, but they had been in silos, on different time frames, and not related to each other or informed by an underlying framework. We realised that while what happened within our walls was important, our footprint extended up and down our supply chain and we needed to address that.

A decision was made at the highest levels to set long-term sustainability goals for the whole company, which addressed the full implications of what we make and sell, including the energy customers need to use our products. We called this our 2020 Legacy of Good Plan. Grounding the energy target in science made sense because it means we know this is what we have to do to help keep temperatures from rising above 2°C.

What was the process?

Having taken the decision to set new ambitious targets in 2011, we then spent much of 2012 and 2013 developing them. Setting a goal for our operations, packing and logistics was not so hard: we had had goals in these areas in the past. What was more challenging was looking downstream at how our products were used. We decided to focus on energy as opposed to emissions, on the basis that the former can be a proxy for the latter. Essentially we decided we needed to reduce the energy our products consumed – as the biggest part of our carbon footprint.

We started off by working with all the different product sets – including laptops, desktops, servers, networking equipment etc. We asked the same questions and had the same sorts of conversations: what can we realistically achieve in terms of efficiency savings; what technology is coming down the line? We had a lot of help from our Chief Technology Officer.

By October 2013 we had got consensus in the different product groups, had socialised the target and got approval from executives. Later, in 2015, as part of a review of our strategy on climate change, we took what we’d done and presented it to CDP and WWF for approval, to see if our goals met the science-based targets criteria, which they did. So in that sense we kind of ‘backed into’ an official science-based target.

What are the benefits of having a science-based target?

We are seeing increasingly the direct consequences of climate change in the form of more extreme and more regular weather events. It’s clear that all businesses have to act, to pull their weight to help tackle this serious long-term challenge.

This is about how we want to be seen as a company, about what it means to be a responsible corporate citizen; it is also what our customers expect from us. By setting science-based targets we are ensuring our own sustainability, as well as supporting the needs of businesses in the future. Our customers need to know we have their back and can help them reduce energy use in the long term.

It has been an extremely useful process to go through: to understand the challenges and the potential technical solutions, to invest in the capability to measure progress. We are learning things that will fundamentally alter our thinking about our products and what we plan for in the future. And of course there are cost savings: if we can reduce the energy our products use we benefit from that.

It also helps us to attract and retain the right staff. Millennials in particular care how responsible a company is and will use that as the basis of a decision around who to work for.

To what extent has this driven innovation in the company?

Engineers love data! Give them the data and they will respond. They can now go in and work out where the biggest energy footprints are in the company. They have a licence to innovate in order to meet the business strategy goals. The fact is if you want to solve a problem, you need to know the scale and nature of the problem you are trying to solve. When you have this information and these insights, then you know what you need to do.

Did you encounter any challenges?

We were surprised by how material the footprint of our monitors was in comparison to the overall company footprint. We didn’t initially think about having to address this. We had to go back and revisit internal assumptions. This was a bit embarrassing, in a way, but ultimately it’s a good thing. It’s empowering. We would never have challenged these assumptions if we hadn’t had the metric and the target to aim for.

Part of the challenge is that customers are demanding increasingly high-quality performance monitors. We had to ask ourselves: ‘how do we meet customer demand while continuing to reduce emissions?’ Before we had a science-based target these questions would have just been for the water cooler – but now they receive proper attention.

The other potential challenge is that there is a lot of sensitive information and data behind our targets. We need to be careful about this, while balancing the need to communicate the benefits of a target and demonstrate our leadership and innovation in a granular way.

Do you anticipate this improving your relationship with regulators or government?

I think the American Business Acts on Climate Pledge was a real watershed moment. It was a big signal from the Federal government that companies needed to start looking seriously at these issues. The government doesn’t just set rules and a culture, but it is also a potential customer. It can indicate its support for low-carbon innovation by purchasing those products, so in that sense, having a science-based target should stand us in good stead.

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Dell: The Business Case for a Sustainable Supply Chain

Executive Summary > Introduction > The World’s Largest Electronics Takeback Programme > Closed-Loop Recycled Plastic Supply Chain > Challenges in Transitioning to a Closed-Loop Recycling System > Natural Capital Accounting > Prognosis >

Executive Summary

Business Background

Dell is one of the world’s largest computer manufacturers and technology companies. It became a private company in 2013 through an acquisition by Silver Lake Partners, a private equity firm, and Michael Dell, the founder and CEO of Dell. Dell offers a wide range of IT hardware, software products and services. [1] Its clients include numerous governments, large enterprises, small businesses and consumer markets. Dell also markets third-party software and hardware. In particular, Dell is known for its direct sales and customisation model, as well as for its innovative supply chain management.

Ecosystem Pain Point

E-waste is the world’s fastest-growing waste stream, with a relatively low recycling rate overall (approximately 15% globally). [2] Rapid technology innovation and ever-shortening product lifespans contribute to the increase of e- waste. Of the components that comprise e-waste, gold, copper and plastic content dominate the material value of e-waste material. [3] Plastic, in particular, is overabundant in landfills.

Responsible e-waste disposal is important from an environmental perspective, but it also makes good business sense. It harnesses “untapped potential to create a more efficient and sustainable product ecosystem” and reduces dependence on fossil fuels, which have fluctuating prices. [4]

One of the solutions to e-waste disposal is to gather and use recycled plastic in products. Although recyclers have made technical progress in recent years, it remains challenging for companies to source a sufficient supply of high-quality postconsumer recycled plastic that meets the technical, economic and aesthetic requirements of ICT product manufacturers

Business Strategy

Dell has taken a full lifecycle approach to change its production, use and disposal of plastic. The company’s product design, in particular, emphasises the ease of repair and recyclability from the start. Dell also continuously looks for ways to incorporate sustainable materials, such as recycled plastic, into products and packaging. Dell’s Global Takeback programme makes it easier for customers to dispose of old electronics. For products beyond repair or reuse, Dell offers free recycling for consumers, as well as convenient, secure and compliant solutions for larger customers.

Performance

The Dell Recycling programme has recovered 1.76 billion pounds of electronics since 2007. Since mid-2014, the programme’s closed-loop recycled plastic supply chain has used plastics recovered from recycled computers to create nearly 5,000 tonnes of new parts for more than 90 products across millions of units. Through collaboration with TruCost, Dell has taken a multi-capital approach to quantify the natural capital benefits of the closed-loop model. It has also explored the possibility of measuring the social impact associated with this approach. This collaborative work identified financial and environmental savings.

The next step for Dell is to scale the programme and to recycle a larger number of different materials through the programme. As Dell looks to the future, expanding collection capacity in developing countries represents a new front.

____________

[1] “Dell Inc. at a Glance,” Company Profile, Vault.com. Link . [2] GreenBiz, GreenBiz Group Inc . Link . [3] C.P. Baldé et al., “The global e-waste monitor,” United Nations University , 2015. Link . [4] Anya Khalamayzer, “How Samsung, Dell are reinventing IT products,” GreenBiz , 9 December 2016. Link .

Introduction

About the Company

Dell is one of the world’s largest computer manufacturers and technology companies. The company sells a wide range of IT hardware, software products and services for enterprise, government, small business and consumer markets. [5]

As a privately held company, Dell has the freedom to pursue a longer time horizon and to commit to changing its company resource use. The principle of efficiency is central to the Dell business model and informs the company’s approach to resources, sourcing and waste management. In particular, Dell is also known for its innovative supply chain management.

Dell’s commitment to efficiency has prompted the company to take on the timely challenge of disposing of e-waste. This case study outlines Dell’s contribution to responsible e-waste disposal through the use of circular economy and closed-loop ecosystems. Attempts to develop a sustainable supply chain represents one key initiative, among others, to maximise efficiency for Dell and its customers.

E-waste, discarded electrical and electronic equipment, is the world’s fastest-growing waste stream. [6] Rapid technology innovation and ever-shortening product lifespans contribute to the increase of e-waste. [7] If e-waste continues to proliferate at current rates, experts caution that the problem will worsen in the future. According to a United Nations University report, the amount of global e-waste reached 41.8 million tonnes in 2014, and the total amount of global e-waste may hit 50 million tonnes in 2017, the report warns. [8] To compound matters, e-waste has a low overall recycling rate, which means that unwanted equipment remains unused.

Responsible e-waste disposal is not only important from an environmental perspective, but also makes good economic sense. [9] As an example, the material value of global e-waste was estimated to be 48 billion Euros in 2014 alone. [10] Leveraging this underutilised resource opens up vast “untapped potential to create a more sustainable, efficient product ecosystem.” [11]

The circular economy takes the traditional, linear model of “take, make and dispose” — which moves products from design to factory to consumer to landfill — and bends it into a more efficient closed-loop ecosystem. [12] Unwanted, used electronics can be taken back for refurbishment and then resold on the secondary market. Products beyond repair, or those that are no longer economical to repair, are recycled to allow for precious and scarce materials to be recovered. Recycled content can either be incorporated into the design and manufacturing of new products or sold out to the market for others to use.

Research shows that approximately 30% of consumers have technology products lying around the house unused, and half of consumers are unsure of what to do with their old electronics. [13] According to Dell, similar situations exist with businesses warehousing old equipment.

Takeback options make it easy for a wide variety of customers to dispose of their old electronic products in a responsible manner. This measure ensures that unwanted electronics get reused or, if at the end of life, properly recycled.

Plastic is one of the most useful and important materials in modern society. It is popular in computers due to its durability, ease of fabrication into complex shapes and electrical insulation qualities. [14] However, plastic recycling remains challenging and, as a result, the material constitutes a major contributor to landfills. The production of plastic also uses a substantial amount of fossil fuels. Manufacturing plastics from fuel is resource intensive, requires large amounts of energy and releases relatively high levels of CO2 emissions in the process. Recent research has shown that our current use of plastics will become unsustainable if we do not take steps to improve recycling and reduce plastics’ usage.

Using secondary, recycled plastic as feedstock for new computers presents one possible solution. With the fast pace of innovation and product upgrades in the ICT sector, recycled content can reduce the environmental toll of manufacturing with virgin materials. The circular economy and the development of secondary raw material markets are high on the European agenda. Nevertheless, it remains challenging to find a sufficient supply of high-quality postconsumer recycled plastics that meets the technical, economic and aesthetic requirements of ICT products manufacturers. [15]

In response, Dell is taking steps towards creating a “circular” supply chain. Increased volatility in commodities and growing pressure on resources have alerted Dell to the necessity of rethinking materials and energy use. [16] In 2013, Dell committed to putting a total of 50 million pounds of recycled materials back into its products by 2020. The company reached this goal in the beginning of 2017 and is continuing to scale its efforts.

For Dell, sourcing postconsumer recycled plastics from the market and building a new, stable closed-loop supply chain for plastics from used electronics collected through takeback programmes present viable and affordable alternatives to using virgin materials. Rather than focusing exclusively on individual challenges, Dell has taken steps to approach their supply chain from a broader, systemic perspective. Jennifer Allison, Director of Supply Chain Sustainability at Dell, summarises the company’s current business strategy:

We’re talking about systems — not just products, programmes or initiatives. Looking at the whole system is when change begins to make a significant difference. Technology is a great tool for measuring and analysing systems, understanding processes and identifying inefficiencies.[17]

In this way, Dell takes a whole ecosystem view of its product lifecycles. This approach is transforming the design of products and services. Dell’s lifecycle approach aims to keep viable products and parts in circulation for longer periods of time. It also harnesses global efforts to reuse, refurbish and resell products and parts to extend their lifetimes and to recycle them at end of life.

Product design emphasises ease of repair and recyclability from the beginning. Dell also looks continuously for ways to incorporate sustainable materials, such as recycled plastic and reclaimed carbon fiber, into products and packaging. [18]

[5] “Dell Inc. at a Glance,” Company Profile, Vault.com.   Link . [6] Center for Security Studies. Link . [7] C.P. Baldé et al. [8] James Rubin. “E-Waste: The circular economy’s achilles heel,” edie newsroom , 26 June 2015. Link . [9] Irene Kitsara, “E-Waste and Innovation: Unlocking Hidden Value,” Wipo Magazine , June 2014. Link . [10] C.P. Baldé et al. [11] Anya Khalamayzer. [12] GreenBiz, GreenBiz Group Inc. [13] “Switched on to Value,” WRAP Report , November 2014. Link . [14] “Plastics: Key Materials for Innovation and Productivity in Major Appliances,” American Plastics Council. Link . [15] “Best Practices in Recycled Plastic,” DigitalEurope , August 2016. Link . [16] “Best Practices in Recycled Plastic,” DigitalEurope. [17] Lisa Arnseth, “Full Circle,” Institute for Supply Management , October 2016. Link . [18] “Dell on the Circular Economy,” March 2016. Link .

The World’s Largest Electronics Takeback Programme

Dell has the world’s largest electronics takeback programme, which spans across 83 countries and territories. The programme has recovered approximately 800,000 tonnes of electronics since 2008. For commercial customers, Dell offers a full-spectrum of logistics and disposal capabilities via the Asset Resale and Recycling Service. Current capabilities include data security, on-site shredding, recycling and full traceability reporting. Dell also makes it easy for individual consumers to recycle by partnering with freight companies to provide free mail-back recycling of Dell-branded equipment. In many countries, the programme will even pick up used equipment from a customer’s home. [19]

Another programme designed to make the recovery of obsolete electronics easier and more accessible is the Dell Reconnect Partnership with Goodwill, a not-for-profit organisation committed to helping people become independent through education and training. The Reconnect Programme allows people to drop off any brand of used electronics to more than 2,000 Goodwill locations across the United States. Dell Reconnect accepts any brand of computer equipment in any condition from consumers and provides free recycling services. [20]

Dell returns all proceeds to Goodwill in order to help support Goodwill’s mission of putting people to work. [21] By participating in this initiative, customers simultaneously help protect the environment, benefit the community and receive a receipt for tax purposes. In this way, the programme helps both the costumers and the business.

The donated equipment has value as a whole system, as parts and sometimes as raw materials such as metals, plastics and glass. [22] If the equipment can be refurbished, Goodwill sells it. If not, the end-of-life product is sent to Wistron, one of Dell’s recycling partners, for asset recovery in the United States. Metals such as tin, gold and tungsten are re-sold in the commodities market. To complete the closed loop, plastics are sorted and shipped to China, turned into pellets and mixed with virgin plastics for use in new Dell products. [23]

[19] “Dell Recycling,” Dell Inc. . Link . [20] GreenBiz, GreenBiz Group Inc. [21] ‘About Us,” Goodwill Industries International, Inc. . Link . [22] Dell Reconnect – How It Works,” Dell Inc. . Link . [23] Mike Hower, “Dell cuts e-waste with recycled carbon fiber,” GreenBiz , 23 October 2015. Link .

Closed-Loop Recycled Plastic Supply Chain

Dell’s 2020 “Legacy of Good” sustainability plan set the goal of incorporating 50 million pounds of post-consumer recycled-content plastics and other sustainable materials into Dell products by 2020. [24] Dell met this target ahead of schedule in early 2017.

In 2014, Dell launched its closed-loop recycled plastics supply chain to accelerate progress against their goal of using 50 million pounds of sustainable materials. Since then, the company has used more than 10.5 million pounds of closed-loop plastics in new products. As a result, Dell now offers over 90 products made with closed-loop recycled plastics. These products include flat panel monitors, desktops and all-in-one computers.

Run in conjunction with various supply chain partners, the programme consists of collecting, recycling and using e- waste to make new Dell products. [25] It begins with sorting plastics out of the various takeback streams, further processing them and then sending them to a manufacturing partner in Asia. The plastics are then melted down and moulded into new parts and computer components, thereby creating a closed-loop system. [26] The whole process – from the time the equipment is received for recycling to the time the plastics are back in a customer’s hands as part of a new product – takes just under six months.

The closed-loop system also provides businesses with a price more stable than the cost of virgin materials, which fluctuates with the price of oil. It also reduces the company’s dependence on environmentally costly virgin materials. Furthermore, by reusing plastics already in circulation, Dell cuts down on e-waste, reduces carbon emissions and helps drive a circular economy for IT. The closed-loop process yields an 11% lower carbon footprint as compared to using virgin materials. [27] The closed-loop plastics supply chain delivers products that are better for the environment, which is increasingly what Dell customers demand. [28]

Dell’s leadership in recovering and reusing plastic from used computers constitutes an integral step in transitioning the larger electronics industry toward a circular economy. Louise Koch, Corporate Sustainability Lead in EMEA for Dell, describes the impetus for initiating a closed-loop system:

Dell’s programme is driven by both an effort to improve efficiency – a principle that goes back to its founding ethos and business model – as well as a commitment to reducing environmental impact. [29]

The use of closed-loop plastics may create a demand for plastic from used computers and thereby increase the level of plastic recycling from electronics. This, in turn, generates new jobs and opportunities for those in the nascent industry, all while staying true to Dell’s founding principles.

[24] “Best Practices in Recycled Plastic,” DigitalEurope . [25] Mike Hower. [26] Lisa Arnseth. [27] “Dell 2020 Legacy of Good Plan,” Dell Inc. , Link . [28] “Dell’s Closed- loop recycling process,” Dell Inc . Link . [29] Louise Koch (Corporate Sustainability Lead for Europe, Middle East and Africa), personal communication.

Challenges in Transitioning to a Closed-Loop Recycling System

In transitioning from a “take-make-dispose” linear supply chain to a circular supply chain, Dell has had to overcome a number of hurdles. It continues to experience four key challenges in the following areas:

Supply-side

Regulation and geographic

Demonstrating benefits to costumers

Technical Challenges

One of the biggest challenges that Dell faced with the closed-loop recycling was identifying which types of plastic can be incorporated back into new products. As Scott O’Connell, Director of Environmental Affairs for Dell, puts it, “When dealing with plastics, getting the properties equivalent or better to virgin materials isn’t easy…But this is a challenge we’ve been able to overcome with engineering know-how.” [30] Dell worked with partners to test different approaches. Testing revealed that, due to mechanical and aesthetic considerations, the blend of recycled-content with virgin plastic produces the best outcomes.

Supply-side Challenges

Another challenge involves establishing a reliable closed-loop supply chain. As O’Connell describes, “We had to make sure that we had sufficient volume of product coming in to be able to yield enough plastics to put into a mainstream Dell product.” [31] Supply of products and plastic derives from Dell’s own sources, which adds a greater degree of insight and security. However, for the closed-loop recycling to work and scale, Dell needs a security of supply, which can be difficult to attain with fluctuating numbers of products collected through takeback. Shrinking form factors—the fact that there is less plastic per item recycled as electronics become smaller—further complicates the situation. Hence, Dell needs to continue to drive increasing participation in takeback programmes, while at the same time exploring other means of acquiring recycled-content materials.

Regulation and Geographical Challenges

Transporting materials poses an additional challenge. Dell customers are all over the world, which means takeback initiatives must accommodate the global scale. Materials need to be collected in sufficiently dense amounts to make shipping to a centralised processor worth the economic and environmental costs. This involves logistics, regulations and other considerations. In Europe, for example, closed-border regulation inhibits transportation of electronic waste and, at present, makes it unfeasible for Dell to set up a branch of their closed-loop supply chain there.

Demonstrating the Benefits to Customers

The final challenge for Dell is to demonstrate the benefits of closed-loop recycling to customers. Ultimately, these products look and perform identically to those made from virgin materials. Dell must communicate the value proposition to customers by highlighting the amount of recycled content in the final product, the closed-loop nature of the materials and the benefits to the customers’ own sustainability goals.

Performance Global Takeback and Closed-Loop Recycling Programme

Since 2008, Dell has taken back more than 1.76 billion pounds (nearly 800 million kg) of used electronics and, since mid-2014, when Dell launched the closed-loop plastic recycling programme, it has created nearly 5,000 tonnes of plastics from recycled computer parts. Dell has saved more than USD 1 million from this process, and the carbon footprint of circular plastics is 11% smaller as compared to the manufacture of virgin plastics. Dell now uses circular plastics in approximately 90 products across millions of units globally.

[30] Scott O’Connell (Dell, Director of Environmental Affairs), interviewed by Mike Hower, “Dell cuts e-waste with recycled carbon fiber,” GreenBiz , 23 October 2015. Link . [31] Ibid.

Natural Capital Accounting

Together with TruCost, Dell has done an evaluation to understand the gains from moving away from virgin plastics. One of the most useful ways for companies to account for these risks is to quantify the environmental impacts generated by their activities—internal operations, upstream supply chain and downstream product use and disposal—and then convert those impacts into monetary values. [32] The monetary value helps identify the value not captured in traditional financial markets and incorporates these considerations into decision-making. [33]

Dell quantified the greenhouse gas emissions savings derived from using closed-loop plastic and expanded it in the following ways:

Measured the net benefit for environmental impacts of the closed-loop plastic, compared to traditional plastic.

Valued the environmental net benefit in terms of natural capital—the stock of natural resources that makes human life possible and upon which businesses rely to produce goods and services.

Scaled these benefits to larger applications, including utilising closed-loop plastic across many of Dell’s product lines.

Prepared a framework for incorporating social and financial impacts into the net benefit valuation in the future. [34]

The evaluation demonstrated the environmental benefits of closed-loop recycled plastic usage. Findings showed that “Dell’s closed-loop plastic has a 44% (USD 1.3 million annually) greater environmental benefit compared to virgin ABS plastic.” [35] In particular, increased computer recycling lessened environmental impacts. The research found that recovering and recycling the used plastics from computers minimised “human health and ecotoxicity impacts” and reduced the overall “emission of hazardous substances.” [36]

In addition to quantifying the environmental benefits of closed-loop recycling systems, Dell has also begun to incorporate social impact metrics into its valuation framework. [37] Emergent strategies such as analysing activities for their use of social and human capital, will likely present an area for further refinement and application in the future. [38] At present, Dell is combining both environmental and social impact metrics into its process in order to help tackle the challenge of responsible e-waste disposal.

[32] Dell, Dell Inc. . Link . [33] Ibid. [34] Ibid. [35] “Valuing the net benefit of Dell’s more sustainable plastic use at an industry-wide scale,” Trucost , September 2015. Link . [36] “Valuing the net benefit of Dell’s more sustainable plastic use at an industry-wide scale,” Trucost , September 2015. Link . [37] Ibid. [38] Ibid.

On a global scale, there is still huge potential to scale up circular resource streams in the IT sector and beyond. Only 10% of the plastics produced today are recovered – and more than 50% end up in landfills.

Dell has increased the use of recycled materials (both closed-loop and traditional postconsumer recycled plastics) in new products and Dell plans to continue to scale the programme.

As Dell continues to scale the current programme, it will look to expand into reclaiming and reusing other materials. Dell has already had success with using reclaimed carbon fiber for products and are currently using recycled ocean plastics for packaging.

Dell will also look at how ocean plastics or other solutions can be used with products.

Dell will continue to measure social impact using the same methodology, updating models for collection totals to follow form-factor trends. It will report progress annually, building on this total toward a cumulative 2 billion pounds by 2020. [39]

Dell continues to lead conversations with governments and industry partners about recycling and circular loops on a global scale. Dell is open to innovative collaborations with even more customers, partners and governments in the coming years. Dell sees particular opportunities in creating partnerships in developing countries to strengthen this ecosystem.

Dell’s takeback programme presents a compelling example of the potential of circular economy and closed-loop systems to contribute to responsible, mutual business practices. Looking towards the future, creating closed-loop recycling programmes in developing countries represents a new frontier. Recycling products in the countries from which they are recovered brings skilled jobs, creates industry and strengthens the local economy. [40] Using its proven abilities to leverage partnerships and government relationships to create the infrastructure needed for new programmes, Dell can continue driving a culture of recycling in communities around the world. [41] As Dell’s programme example highlights, collaborative approaches have the potential to create both financial and environmental savings for corporations and costumers on the global scale.

[39] “Dell 2020 Legacy of Good Plan,” Dell Inc. , Link . [40] Ibid. [41] Ibid.

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About This Case Study

First developed for the 2017 Forum by the Mutuality in Business Research Team. The web text is based on the case study written by researchers at Saïd Business School, University of Oxford . The views of the authors and/or the University are distinct from other content on this website.

Based on research by the Mutuality in Business Research Team, Saïd Business School. With contributions from Louise Koch, Dell and Stephen Roberts, Dell. Edited by Justine Esta Ellis.

Authors’ Note

This is a descriptive case study, based on publicly available materials as well as on the information shared by the company described. This case study is not meant to provide critical analysis of the literature or information used to develop it. All errors and omissions are the authors’ own.

About This Series

The businesses featured in these case studies share a commitment to objectives beyond purely financial performance, as well as a serious intent to implement mutual practices through new forms of ownership, governance, leadership, measurement and management.

Please note: The header photograph is illustrative and does not directly portray the subject matter. Some editorial changes have occurred during the process of converting the paper from the PDF version above into this web page version.

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Home » Management Case Studies » Case Study of Dell: Business Innovation and Success

Case Study of Dell: Business Innovation and Success

Dell Inc. is an American multinational information technology corporation which is based in Round Rock, Texas, United States. The corporation being the largest technological corporations in the world develops, sells and supports computers and related products and services which employs more than 96000 people. The company bears the name of its founder, Michael Dell. The company sells personal computers, servers, data storage devices, network switches, software, and computer peripherals. The company is also popular for its HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers.

The company is well known for its innovations in supply chain management and electronic commerce. Dell’s tagline is ‘Yours is Here’. Their Business/Corporate class represent brand where the company advertises emphasizes long life-cycles, reliability, and serviceability. Such brands include Optiplex, Vostro, N Series, Latitude, Precision, Power Edge; Power vault etc. Their Home Office/Consumer class emphasizes value, performance, and expandability. These brands include Inspiron, Studio, XPS, Studio XPS, Alienware Adamo. Their Peripherals class is popular in market which includes USB keydrives, LCD televisions, and printers. Dell monitors includes LCD TVs, plasma TVs and projectors for HDTV and monitors. Their service and support brands include the Dell Solution Station, Dell Support Center, Dell Business Support, Dell Everdream Desktop Management and Your Tech Team.

The general policy of the company to manufacture its products close to its customers so as to minimize the delay between purchase and delivery has been really beneficial for the company in terms of goodwill. This is done by implementing a just-in-time (JIT) manufacturing approach , which minimizes inventory costs .

Another signature of the Dell business model which is a critical consideration in an industry where components depreciate very rapidly is low inventory. The manufacturing process of the company covers assembly, software installation, functional testing, quality control and many more. Dell has proved be a great manufacturing company. It manufactures desktop machines in-house and then contracted out manufacturing of base notebooks for configuration in-house. Various innovation processes takes place in the company which proves to be efficient for the company.

Dell Inc. brands its service agreements at five levels for their business customers. The first one being the Basic support which provides business-hours telephone support and next business-day on-site support/ Return-to-Base or Collect and Return Services which are based on contracts purchased at point of sale. Then is the Silver support which provides 24×7 telephone support and 4-hour on-site support after telephone-based troubleshooting. The next being the Gold support which provides additional benefits over and above Silver support. The Platinum Plus support provides additional benefits to Gold Support. And the last but not the least is the two-hour on-site support. Another important is the Dell’s Consumer division which offers 24×7 phones based and online troubleshooting rather than only during business hours in certain markets. Dell has put together packages of options for each category of its customers be it small and medium-sized businesses, large businesses, government, education, and health-care- and life-sciences.

There are various marketing strategies of the company which helps it to achieve its desired goals. Its marketing strategies include lowering prices at all times of the year and offering free bonus products. Another important strategy is offering free shipping in order to encourage more sales and to stave off competitors. The company has planned to expand its program to value-added resellers (VARs), giving it the official name of “Dell Partner Direct” and a new Website. This innovative idea would help the company to go a long way. Dell used to sell its products through Best Buy, Costco and Sam’s Club stores in the United States but then it stopped this practice because it cited low profit-margins on the business. The major competitors of the company are Apple, Hewlett-Packard (HP), Acer, Toshiba, Gateway, Sony, Asus, Lenovo, IBM, Samsung, and Sun Microsystems.

Dell is a company that has pioneered the art of offering exactly the kind of machine needed and demanded. As a company that revolutionized the PC industry, Dell helps drive industry innovation through a time-tested process that puts the customer first. It is aimed at producing easy-to-use products, services and solutions that address needs. Innovation is central to Dell’s recently-announced ‘Simplify IT’ strategy. Committed to reducing complexity and costs for its customers, Dell looks to turn their IT investment into a significant business driver. In a typical IT spends, about 70 per cent goes into maintenance, and only 30 per cent is for innovation . Dell is committed to reversing this ratio not just driving innovation within Dell’s own products and services, but also facilitating innovation for customers with Dell solutions. Some of the other innovations include The H2C thermal transfer unit, the solid-state disk drive, The Blu ray optical disk drive, Display port cables and connectors.

Dell based his strategy on obtaining high growth with integrity and achieving market share the old-fashioned way: one customer at a time. By selling customized products directly to end customers, Dell has empowered businesses and consumers to choose the best solutions for their computing needs. Now, direct from Dell comes Dell Insight, the new industry quarterly that addresses real-world business issues and provides real world solutions. Dell’s research and development (R&D) efforts now span the globe, driven by some of the industry’s foremost product designers and engineers. At the core of Dell’s innovation approach, however, remains an unwavering commitment to deliver new and better solutions that directly address customer needs. Many innovations begin in-house, led by a global team of top engineers, product designers and technical experts. Others begin as a team effort with Dell’s strategic partners . The mission is to deliver innovative and cost-effective solutions that meet today’s real-life customer challenges and work seamlessly in existing environments and with other products. Innovation is not only found in the products and services we deliver, it’s what Dell brings out in our customers.

Dell is a disciplined, process-oriented company that packages technology like no one else. Dell provided guidance and best practices to consolidate the fast-growing IT infrastructure. IT staff has more time to further business objectives. Planned use of virtualization tools within the business continuity strategy reduces disaster recovery time from days to hours .

Dell showed the industry a new way to do business in personal computers. It was revolutionary at the time and created a very large, very profitable franchise in computing. The market has also been changing while Dell has been catching up. The market has been moving increasingly toward mobile computing as the new locus of innovation and activity. Apple is the only computer company that saw this locus coming and it exploited it fully by introducing the iPhone. But Dell is not found exploiting this new innovation although they have made some noises about having their own branded device. It doesn’t appear that they are investing heavily in it which should be done in oder to gain more for their status in the market. It is not that there is no innovation at Dell its just that there is not nearly enough. The company has generated practical online communities which has leveraged social networks like Twitter . A one-trick pony is plenty when the trick is good enough. The trick is no longer unique in the business world. There is just no point in rehashing the misfortunes of Dell customer service and the legendary “Dell Hell” that was created for customers and users. Dell has made two fairly large acquisitions which has proved to be kind of loss for the company. First is the purchase of Perot which recognizes one clear fact in the enterprise market that is the professional services are required. IBM led the way here with IBM Global Services many years ago and even exited the PC business. Dell professional services were so bad once that the customers didn’t even use them when they were included at no additional charges. Perot addresses this weakness but merely follows market reality and is a somewhat lesser solution than what is already offered by the competition. Secondly, Dell also acquired EqualLogic. It doesn’t bring unique capabilities or a change in positioning for Dell although a very strong player in storage area networking. Most of the systems vendors like HP, IBM, and Microsystems have storage solutions. It has built a fairly good all-in-one computer to try and match the iMac. It has also designed a cool laptop called the Adamo. But these are all changes at the margin rather than being at the level of corporate identity and positioning.

Dell has to do something deep, daring, daunting and potentially delightful in order to retain its position in the market. Dell being a hardware manufacturer is narrower than HP, IBM and Sony and Hitachi. HP and IBM have software expertise and knows to build its own OS and software application suites for business use. Sony makes consumer electronics and owns entertainment media. Hitachi makes consumer electronics and appliances. Dell has tightly concentrated itself on making PC before branching out into services but purchasing other firms.

Conclusion:

The company must rely heavily on others for software before it can develop software prowess to add value to its hardware. Dell was never a technology innovator. Dell was just a PC maker that hit on a business model that worked for a time. It never adapted, never looked forward and became complacent. Dell has tightly focused itself on making PC before branching out into services but purchasing other firms. Dell had a brilliant business model to build computers at the time of order to avoid stockpiling inventory . The company worked well until other manufacturing companies discovered cheaper and more innovative methods to cut costs . There is little to differentiate these companies besides price, quality, style, service and technology. Dell unfortunately lags behind all in all of these areas. Dell’s new innovation strategy is not just standards but to attract business customers . The company is unveiling a new Latitude business notebook computer but it’s a bit different from what Dell used to represent. Dell made a name for itself by focusing on standardized technology and the business model that allowed customers to pick and choose the extras for their own computer. Innovation was not an important word seen in Dell. Companies like HP and Sony were selling innovation back then when Dell was selling affordable PCs to the masses. Dell spurs innovation in this way which surely needs changes so as to deliver the best to their customers.

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Home / Case Studies / Dell Technologies

Dell Technologies unlocks new connections and streamlines work with Microsoft Viva Topics

Published on March 1, 2023

Dell Technologies

Among one of the world’s leading technology companies, Dell Technologies is committed to transforming business, shaping the future of innovation, and driving human progress. With more than 158,000 employees, the organization has a vast amount of organizational knowledge and content that its tens of thousands of salespeople around the world consider vital. Dell Technologies turned to Microsoft Viva Topics, a knowledge platform that uses AI to bring knowledge and content directly to employees in the Microsoft 365 apps where they already work.

When Sandra Murtagh, Vice President of Global Sales Learning and Development at Dell Technologies, and Karen Butcher, Head of the Global Sales Learning and Development Transformation Office at Dell Technologies, launched a transformation office within the Dell learning and development organization, the goal was to orient the sales function toward the future. “We’re always thinking about what’s next,” says Butcher. “How can we make the learning experience better? How can we make life easier for our sellers?”

They focused on delivering great experiences and integrating their learning platform with Microsoft Teams, where sellers will be able to access training content at the moment of need. Viva Topics emerged as the next logical step. “Moving forward, we want to integrate more and more information in convenient places for sellers,” says Butcher. “That’s exactly what we’ve started to do with Viva Topics.”

The sales learning and development organization at Dell recognized AI as the most effective way to gather and present large amounts of information. “We’re using Viva Topics because it’s an AI-driven curation engine that pulls together both content and people associated with topics,” says Bruce Sánchez, Global Lead for Sales Learning and Development Technology at Dell Technologies. And because Viva Topics will extend to partner apps, employees will gain a full picture of information gathered from Microsoft sources and beyond. “We’re always on the lookout for partner integrations,” adds Srikanth Ramaswamy, Global Lead for Modern Content and Collaboration Services, Dell Digital Team Member Experience at Dell Technologies. After the success of the pilot testing phase, Dell has recently expanded the use of Viva Topics and embraced a full-scale rollout across its global sales force.

Turning to Viva Topics to uncover knowledge from within the apps they use every day leads Dell sales employees to forge new connections with colleagues. “That’s probably one of the biggest benefits we’re experiencing,” says Murtagh. “Historically, we relied on legacy relationships, but with the combination of Microsoft Teams and Viva Topics, we’re opening up collaboration and relationships across all our functions.” 

The ability to effortlessly create connections is a boon for a global, highly dispersed sales force. “Dell has championed working from home for many years,” says Butcher. “And today, a hybrid approach is at the forefront of our organization.” Creating a flexible, highly mobile experience for sellers is one way the sales learning and development organization supports the hybrid approach for Dell’s sales team. “The ability to easily search for and uncover content natively in Teams and other applications was a big hit,” Butcher continues. “Especially because people have the same experience on mobile devices and desktops, no matter where they work from.” 

“We’ve made Viva Topics a big part of our reimagination of what work looks like for our sellers.”

As the sales learning and development organization expands its use of Viva Topics, it’s also exploring other Microsoft Viva modules, including Microsoft Viva Connections, Microsoft Viva Sales, and Microsoft Viva Insights. It’s an exciting moment. “I’ve been with Dell for 26 years,” says Murtagh. “Where we are now in terms of knowledge management and learning is a massive flip from where we were in the past. We’ve made Viva Topics a big part of our reimagination of what work looks like for our sellers.”

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Dell Case Study – Analysis – Internal Challenges

This post analyzes a Dell case study. The analysis explores several challenges that Dell is facing introduces a number of solutions.

Introduction

Dell is a multinational company based in Texas. Dell offers computers and related products together with repairs and support.

Dell’s products adapt to many market sectors including students, gamers, programmers, businesses, etc. Dell positions itself firmly in both hardware and software industries by using its core competencies. Dell offers reliable, cost-effective and customizable computer products to all its customers worldwide.

Dell transformed consumers’ shopping experience with its mass customization strategy. Dell has continued the same strategy for years and left a door of opportunity open for HP. In 2006 Dell faced many unfortunate incidents: some rechargeable battery packs had the potential to self-ignite, very low earning reports and analysts gave Dell a very negative outlook for coming years. Recently Hewlett Packard (HP) has taken a big market share from Dell. HP as well as Sony, Lenexa, Apple, and other competitors are continuously evolving and becoming a bigger threat to Dell. Competitors can take more market share over time. They can also try to beat Dell’s core competencies and take it out of the market.

Internally Dell is also facing some challenges. The employees at Dell are not completely satisfied, turnover seems to be a growing problem. Other companies are recruiting talented employees from Dell. If all these employees are quitting, then Dell will have to look for new talents. Recruiting new employees is not only time consuming, but also very costly. The fact that employees are not satisfied with the company is a result of other internal problems: company culture issues. There is no deep connection between Dell and its employees.

Main Challenge

Dell is losing market share in its industry. Strong competitors are becoming bigger threats. Competitors are an external challenge that could be overcome by enforcing Dell’s core competencies. Dell has many competitors and some of them have very attractive value propositions. Dell has lost its attractiveness toward clients and may continue to do so due to the decay in the company’s values and objectives. The core problem is that Dell has failed to demonstrate stakeholders its desire for innovation and continuous improvement. The employees are working toward making processes cheaper and not towards new technologies. In general, the culture in the workplace is in decline. Employees do not find the workplace suited for a technology company.

Other stakeholders have also seen a similar picture in these past years. Dell has continued with the same strategy, without getting major advancements in the market. Dell has released products that fail the minimum requirements and that are also a potential hazard to the users. It has also reduced revenue significantly, reducing shareholder’s interest. Dell has not been keeping up with competition and has not been improving over time. All the issues in the problem are completely or in part due to the core problem inside the company.

Several solution paths can be taken to solve the core problem, some of these are the following:

1-Dell could come up with another marketing strategy only focusing on a specific aspect of their company. They could focus more on software or customer service for example.

2-Dell could continue with their high customization strategy, but increase the desire for innovation. They can continue evolving their core competencies and add new ones along the way, focusing on continuous improvements. They need to focus on the stakeholders working in the company too, spread the company’s culture and objective.

3-They could also adopt their competitor’s new strengths and try to implement them. They would have to figure out how to adapt them in their own way and be creative.

Solution Analysis

If Dell decides to go for solution 1, it will have to become more competent in the specific competency. Even though Dell is part of the hardware and software industry, if it inclines more, either way, it will need to develop new skills. These skills will be gain over time but could cost time and money. If Dell focuses on a specific part of its business, it will be so much easier to manage and promote. The biggest problem in this solution is the timeline. Competitors will continue taking away market share if Dell does not act quickly.

Solution 3 is also a fair solution. Competitors are definitely doing something right, and possibly better than Dell. Dell could focus on researching those aspects and learning from competitors. Some of their strategies may be public information, but most of them will be confidential. This could be an issue because Dell won’t be able to get the whole picture without all the information.

Expanding on Solution 2

Solution 2 can solve the core problem more efficiently. The company should continue developing its core competency since for years its competency has to lead them to success. The difficulty is that Dell has to accelerate the creative process and focus more on developing its core competency. 

Dell has to start from the core of the company: the employees. Talented workers are hard to find. Dell needs committed employees that will discover new technologies and processes. Having a high commitment to the company is usually a product of great company culture and outstanding work environment.

Following this solution, Dell won’t have to reduce the services and products they provide. Earnings are distributed among all the offered services and products. Dell’s customers are interested in specific ones that adapt to their needs, taking products or services out can be a big risk.

Following solution number 2 customers and communities will definitely get benefits; they will be able to have access to more reliable services and products. Technology is evolving, businesses need to be on top of the game with their tools, computer equipment is nowadays a must-have and Dell can offer them high-quality products. Environmentally, this strategy won’t produce many changes, but definitely Dell cannot increase environmental impact or pollutants trying to develop better products, because the communities will get affected.

The competition was tough in the past and will continue to be. It will be expected that competitors will bring new strategies and new products to the market. Dell has been at the top of the market share for years and hopefully enforcing its competencies and following solution 2 will help it defend its position.

Implementation

To execute the solution Dell should have the core problem clear and start by making a program with employees. Dell has to be aware of the challenges it is facing and why does it need to focus on improving the competencies and innovations. The best start will be a program for employees to clarify the company’s culture, objectives and also threats. At the same time, Dell will offer employees a more dynamic and open work environment to incentivize creativity and growth. Once the company is working towards the improvement of services/ products they can start advertising to the public and showing their improvements. Using its core competency (custom-built computer services) will help attack customers since many of the customers have been loyal to the company for years. Also, among its competitors, Dell is experienced and still owns a big percent of the market share.

The part involving employees and inside the company training has to be implemented now. Employees may take some time to be able to assimilate the changes and start working towards the new objectives. On the other hand innovation and custom build, computer improvement can take some more time.

The optimal outcome is that Dell will win back the market share it lost and continue growing. Dell will then become more profitable and also be able to keep stakeholders satisfied with the company. Turnover among employees should be reduced and motivation increased.

To measure the success of the solution, some factors can be measured directly:  net income, market share, and sales. These parameters should increase; it won’t be difficult to measure since it is quantitative information. Employee satisfaction is measurable in opinion surveys and turnover rates.

Contingency Plan

In the case there is no difference after the solution has been executed, Dell could implement solution 3 as a contingency plan. The other companies will be more experienced in the matter, but Dell could possibly still get some benefit from inspiring some of their work in other competitors. Competition is very hard, and sometimes it can lead to ethically questionable practices. Companies can go into battles to prove their products are superior. Even Dell could follow one of these practices because they are very strong in the market and the may get external support. On the other hand, following any unethical practice could lead to long-lasting mistrust.

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Post Office executives played a leading role in publicly defending their organisation over the hundreds of prosecutions it brought against the sub-postmasters who ran its branches, based on the flawed Horizon accounting system.

But, behind the scenes, it was in-house lawyers who took on the task of briefing senior executives on the robustness of its Horizon software. They were also responsible for commissioning relevant audits and setting out the UK state-owned organisation’s approach to litigation. 

More than 900 people were convicted of a range of offences, including theft and false accounting, in cases involving data from Fujitsu’s flawed Horizon system, which was introduced in 1999. More than 700 prosecutions were brought by the Post Office itself.

However, it was another lawyer — James Hartley, partner and head of dispute resolution at law firm Freeths — who represented 555 of the sub-postmasters in a landmark 2019 High Court case in which the extent of the IT scandal emerged. The judge ruled that several “bugs, errors and defects” meant there was a “material risk” that the Horizon system was to blame for faulty data used in the Post Office prosecutions.

“It’s quite a complex web of obligation, responsibility and culpability,” says Hartley, reflecting on the reach of the affair into the legal profession. “Somewhere along the way, lawyers have stepped over the red line.”

Now, a public inquiry into the scandal is gaining momentum as it takes evidence from senior Post Office executives, government ministers and figures from Fujitsu, ahead of its conclusion this summer.

In the coming months, the inquiry will hear testimony from several former general counsel at the Post Office, each of whom will give evidence against the backdrop of a debate about whether the role of an in-house lawyer needs to be more strictly regulated.

Susan Crichton, the Post Office’s general counsel between 2010 and 2013, will appear today at Aldwych House in London to respond to claims that, under her watch, the business brought prosecutions against sub-postmasters despite concerns surrounding Horizon.

Audio recordings shared with the inquiry, of conversations between Crichton and forensic accountants Second Sight in 2013, suggest she briefed the company’s chief executive that claims made by accused sub-postmasters about the Horizon system were, in fact, true.

Their discussions include the detail, long denied by the Post Office, that third parties could access systems remotely and alter transaction data. Sub-postmasters successfully argued in court that they could not be held solely responsible for any shortfalls because of this third-party access.

Crichton’s evidence is also expected to spell out some of the difficulties that existed for general counsel in raising concerns, particularly when executives fail to act in response.

Chris Aujard, Crichton’s successor, is scheduled to appear at the inquiry tomorrow. Jane MacLeod, who succeeded Aujard, is due to appear in June, shortly after current counsel Ben Foat takes the stand.

Somewhere along the way, lawyers have stepped over the red line James Hartley, Freeths

Contemporaneous documents suggest that there may have been opportunities for the Post Office to prevent litigation.

The Post Office’s general counsel were involved in commissioning half a dozen reports and reviews by external auditors and consultants, including BAE Systems, Deloitte, EY, and Second Sight, in the decade leading up to the 2019 High Court case.

Some of these reports found faults with internal systems and how they were managed. External lawyers in 2013 warned the Post Office that the business was at risk of breaching its obligations as a prosecutor over improper practices, if any decision were made to shred documents, which prevented disclosure.

Richard Moorhead, a professor of law and professional ethics at the University of Exeter, says matters should be reported “up the ladder” and that general counsel need to act as a “moral compass” within an organisation. “They need to speak up if they think things are being done which are improper and ensure the client hears those things,” he says.

Moorhead, who sits on the government-appointed Horizon Compensation Advisory Board, is a vocal critic of the lawyers involved in the Post Office Horizon scandal.

He adds that there were occasions when in-house lawyers at the Post Office should have sought to “blow the whistle” once it became obvious that errors in the Horizon system could account for shortfalls.

General counsel play a prominent role in shaping the legal strategy of a company or organisation and advising executives on the best approach to compliance and handling legal risk. But there is sometimes tension between serving the business and acting in the public’s interest. 

In the aftermath of the Enron and WorldCom fraud scandals in the early 2000s, US regulators introduced new security laws that required general counsel to report adverse information to audit committees, directors and other officials when senior leadership was unresponsive.

[GCs] need to speak up if they think things are being done which are improper and ensure the client hears those things Richard Moorhead, University of Exeter

Brian Cheffins, a professor of corporate law at the University of Cambridge, says the new rules produced a playbook for in-house lawyers who had been “stonewalled internally”, particularly as these individuals could find themselves in “deep water” when misgovernance became evident.

But Cheffins is opposed to plans to set out general counsel’s obligations formally, and warns that doing so risks duplicating duties that already exist elsewhere.

General counsel in the UK operate under the same rules as any solicitor or barrister advising a client, which stipulate acting with integrity in ensuring that senior figures are briefed on unpalatable information. The Horizon affair has reminded lawyers of their duties when advising executives.

Hartley says: “In-house lawyers need to recalibrate their thinking on where that red line is so they know when to turn around to the person they’re advising and say, ‘No, we cannot do that’.”

Post Office general counsel: in the spotlight

Susan Crichton In 2012-2013 she was involved in instructing Second Sight to conduct an independent investigation into Horizon. The forensic accountants raised concerns but these were not actioned by the business despite executives being briefed. Crichton left the Post Office to take on a similar role at TSB Bank in 2013; she retired in 2018.

Chris Aujard After becoming general counsel in 2013, he was tasked with winding down a mediation scheme set up for affected sub-postmasters and removing Second Sight from its role investigating the Post Office. Meeting minutes from 2014 showed he was present when executives discussed setting aside £1mn in “token payments” to mitigate any reputational damage.

Jane MacLeod In position as general counsel when 555 sub-postmasters brought a suit against the Post Office, MacLeod was responsible for overseeing the business’s initial response. The public inquiry will explore her handling of disclosure and response to litigation when she gives evidence in June. She resigned from the Post Office in 2019.

Ben Foat Appointed to general counsel in 2019, Foat previously served as the business’s legal director. He appeared at the inquiry in the middle of last year after widespread disclosure failures resulted in weeks of delays to evidence. Sir Wyn Williams, chair of the inquiry, has since threatened officials with criminal penalties if such problems recur.

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National news | senate passes bill forcing tiktok’s parent company to sell or face ban, sends to biden for signature.

A TikTok content creator, speaks to reporters outside the U.S. Capitol, Tuesday, April 23, 2024, in Washington, as Senators prepare to consider legislation that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers. (AP Photo/Mariam Zuhaib)

Jennifer Gay, a TikTok content creator, sits outside the U.S. Capitol, Tuesday, April 23, 2024, in Washington as Senators prepare to consider legislation that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers. (AP Photo/Mariam Zuhaib)

A TikTok content creator, sits outside the U.S. Capitol, Tuesday, April 23, 2024, in Washington as Senators prepare to consider legislation that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers. (AP Photo/Mariam Zuhaib)

By HALELUYA HADERO (AP Business Writer)

WASHINGTON (AP) — The Senate passed legislation Tuesday that would force TikTok’s China-based parent company to sell the social media platform under the threat of a ban, a contentious move by U.S. lawmakers that’s expected to face legal challenges and disrupt the lives of content creators who rely on the short-form video app for income.

The TikTok legislation was included as part of a larger $95 billion package that provides foreign aid to Ukraine and Israel and was passed 79-18. It now goes to President Joe Biden, who said in a statement immediately after passage that he will sign it Wednesday.

A decision made by House Republicans last week to attach the TikTok bill to the high-priority package helped expedite its passage in Congress and came after negotiations with the Senate, where an earlier version of the bill had stalled. That version had given TikTok’s parent company, ByteDance, six months to divest its stakes in the platform. But it drew skepticism from some key lawmakers concerned it was too short of a window for a complex deal that could be worth tens of billions of dollars.

The revised legislation extends the deadline, giving ByteDance nine months to sell TikTok, and a possible three-month extension if a sale is in progress. The bill would also bar the company from controlling TikTok’s secret sauce: the algorithm that feeds users videos based on their interests and has made the platform a trendsetting phenomenon.

TikTok did not immediately return a request for comment Tuesday night.

The passage of the legislation is a culmination of long-held bipartisan fears in Washington over Chinese threats and the ownership of TikTok, which is used by 170 million Americans. For years, lawmakers and administration officials have expressed concerns that Chinese authorities could force ByteDance to hand over U.S. user data, or influence Americans by suppressing or promoting certain content on TikTok.

“Congress is not acting to punish ByteDance, TikTok or any other individual company,” Senate Commerce Committee Chairwoman Maria Cantwell said. “Congress is acting to prevent foreign adversaries from conducting espionage, surveillance, maligned operations, harming vulnerable Americans, our servicemen and women, and our U.S. government personnel.”

Opponents of the bill say the Chinese government could easily get information on Americans in other ways, including through commercial data brokers that traffic in personal information. The foreign aid package includes a provision that makes it illegal for data brokers to sell or rent “personally identifiable sensitive data” to North Korea, China, Russia, Iran or entities in those countries. But it has encountered some pushback, including from the American Civil Liberties Union, which says the language is written too broadly and could sweep in journalists and others who publish personal information.

Many opponents of the TikTok measure argue the best way to protect U.S. consumers is through implementing a comprehensive federal data privacy law that targets all companies regardless of their origin. They also note the U.S. has not provided public evidence that shows TikTok sharing U.S. user information with Chinese authorities, or that Chinese officials have ever tinkered with its algorithm.

“Banning TikTok would be an extraordinary step that requires extraordinary justification,” said Becca Branum, a deputy director at the Washington-based Center for Democracy & Technology, which advocates for digital rights. “Extending the divestiture deadline neither justifies the urgency of the threat to the public nor addresses the legislation’s fundamental constitutional flaws.”

Sen. Ron Wyden, a Democrat who voted for the legislation, said he has concerns about TikTok, but he’s also worried the bill could have negative effects on free speech, doesn’t do enough to protect consumer privacy and could potentially be abused by a future administration to violate First Amendment rights.

“I plan to watchdog how this legislation is implemented,” Wyden said in a statement.

China has previously said it would oppose a forced sale of TikTok, and has signaled its opposition this time around. TikTok, which has long denied it’s a security threat, is also preparing a lawsuit to block the legislation.

“At the stage that the bill is signed, we will move to the courts for a legal challenge,” Michael Beckerman, TikTok’s head of public policy for the Americas, wrote in a memo sent to employees on Saturday and obtained by The Associated Press.

“This is the beginning, not the end of this long process,” Beckerman wrote.

The company has seen some success with court challenges in the past, but it has never sought to prevent federal legislation from going into effect.

In November, a federal judge blocked a Montana law that would ban TikTok use across the state after the company and five content creators who use the platform sued. Three years before that, federal courts blocked an executive order issued by then-President Donald Trump to ban TikTok after the company sued on the grounds that the order violated free speech and due process rights.

The Trump administration then brokered a deal that had U.S. corporations Oracle and Walmart take a large stake in TikTok. But the sale never went through.

Trump, who is running for president again this year, now says he opposes the potential ban.

Since then, TikTok has been in negotiations about its future with the secretive Committee on Foreign Investment in the United States, a little-known government agency tasked with investigating corporate deals for national security concerns.

On Sunday, Erich Andersen, a top attorney for ByteDance who led talks with the U.S. government for years, told his team that he was stepping down from his role.

“As I started to reflect some months ago on the stresses of the last few years and the new generation of challenges that lie ahead, I decided that the time was right to pass the baton to a new leader,” Andersen wrote in an internal memo that was obtained by the AP. He said the decision to step down was entirely his and was decided months ago in a discussion with the company’s senior leaders.

Meanwhile, TikTok content creators who rely on the app have been trying to make their voices heard . Earlier Tuesday, some creators congregated in front the Capitol building to speak out against the bill and carry signs that read “I’m 1 of the 170 million Americans on TikTok,” among other things.

Tiffany Cianci, a content creator who has more than 140,000 followers on the platform and had encouraged people to show up, said she spent Monday night picking up creators from airports in the D.C. area. Some came from as far as Nevada and California. Others drove overnight from South Carolina or took a bus from upstate New York.

Cianci says she believes TikTok is the safest platform for users right now because of Project Texas, TikTok’s $1.5 billion mitigation plan to store U.S. user data on servers owned and maintained by the tech giant Oracle.

“If our data is not safe on TikTok,” she said. “I would ask why the president is on TikTok .”

Associated Press writers Mary Clare Jalonick and Matt O’Brien contributed to this report.

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Lessons from Beyoncé on Navigating Exclusion

• Ella F. Washington,
• Hildana Haileyesus,
• Laura Morgan Roberts

The star’s path from CMA Awards backlash to Cowboy Carter is a case study in strategic response.

In 2016, Beyoncé’s performance at the CMA Awards sparked backlash from fans complaining about everything from her attire to her lack of connection to the genre. This year, she released her first country album, which debuted at number one on the Billboard 200. Her actions over the past eight years have been a case study in how to navigate workplace exclusion. As a first step, it often makes sense to exit the conversation and wait for a better moment to respond. Then, work behind the scenes, ideally with collaborators, to push for change. Finally, consider focusing on your own authenticity and strengths to create your own lane within your organization or outside it.

Beyoncé, the globally revered singer, songwriter, and entrepreneur, last month released her new album Cowboy Carter.   However, this project is much more than another musical release from a leading star. It offers a case study in how to navigate workplace exclusion.

• Ella F. Washington  is an organizational psychologist; the founder and CEO of Ellavate Solutions, a DEI strategy firm; and a professor of practice at Georgetown University’s McDonough School of Business. She is the author of  The Necessary Journey: Making Real Progress on Equity and Inclusion  (HBR Press, November 2022) and  Unspoken: A Guide to Cracking the Hidden Corporate Code  (Forbes Books, May 2024). 
• Hildana Haileyesus  is a DEI consultant at  Ellavate Solutions with a background in training and facilitation, client strategy, and research. She has worked across higher education and business and applies a sociological lens to equity-driven change efforts.
• Laura Morgan Roberts is a Frank M. Sands Sr. Associate Professor of Business Administration at the University of Virginia’s Darden School of Business. She is an organizational psychologist and the coeditor of Race, Work and Leadership: New Perspectives on the Black Experience (Harvard Business Review Press, 2019).

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A popular YouTuber's negative video of Humane's AI Pin raises questions about critical reviews in the age of innovation

• This post originally appeared in the Insider Today newsletter.
• You can sign up for Business Insider's daily newsletter here .

Hello there! If you're struggling to decide the foods worth buying organic, best-selling author Michael Pollan has some suggestions for the ones worth splurging on to avoid harmful chemicals .  

In today's big story, we're looking at a critical tech review that caused a bit of a stir on social media .

What's on deck:

Markets: Goldman Sachs quiets the haters with a monster earnings report .

Tech: Leaked docs show one of Prime Video's biggest issues, forcing customers to abandon shows .

Business: The best bet in business these days? Targeting young men who like to gamble .

But first, the review is in!

If this was forwarded to you, sign up here.

The big story

Up for review.

"The Worst Product I've Ever Reviewed… For Now"

Marques Brownlee, the YouTuber better known as MKBHD, didn't mince words with the title of his review of Humane's AI Pin .

In a 25-minute video , Brownlee details all the issues he encountered using the AI device. (Spoiler alert: There were a lot.)

Brownlee's review aligns with other criticisms of the device . But not all of those came from someone with as much sway. His YouTube channel has more than 18 million subscribers.

One user on X pointed that out , calling the review "almost unethical" for "potentially killing someone else's nascent project" in a post reposted over 2,000 times. 

Most of the internet disagreed, and a Humane exec even thanked Brownlee on X for the "fair and valid critiques." 

But it highlights the power of Brownlee's reviews. Earlier this year, a negative video of Fisker's Ocean SUV by Brownlee also made waves on social media . 

Critical reviews in the age of innovation raise some interesting questions.

To be clear, there was nothing wrong with Brownlee's review. Humane's AI Pin costs $700. Watering down his review to ease the blow would be a disservice to the millions of fans relying on his perspective before making such a significant purchase.

Too often, companies view potential customers as an extension of their research and development. They are happy to sell a product that is still a work in progress on the promise they'll fix it on the fly. ("Updates are coming!")

But in a world of instant gratification, it can be hard to appreciate that innovation takes time. 

Even Apple can run into this conundrum. Take the Apple Vision Pro. Reviewers are impressed with the technology behind the much-anticipated gadget — but are still struggling to figure out what they can do with it . Maybe, over time, that will get sorted out. It's also worth remembering how cool tech can be, as Business Insider's Peter Kafka wrote following a bunch of trips in Waymo's software-powered taxis in San Francisco . Sure, robotaxis have their issues, Peter said, but they also elicit that "golly-gee-can-you-believe-it" sense.

As for Humane, America loves a comeback story. Just look at "Cyberpunk 2077." The highly anticipated video game had a disastrous launch in 2020 , but redeemed itself three years later, ultimately winning a major award .

Still, Humane shouldn't get a pass for releasing a product that didn't seem ready for primetime, according to the reviews. 

And its issue could be bigger than glitchy tech. Humane's broader thesis about reducing screen time might not be as applicable. As BI's Katie Notopolous put it: " I love staring at my iPhone ."

3 things in markets

1. Goldman finally strikes gold. After a rough stretch, the vaunted investment bank crushed earnings expectations , sending its stock soaring. A big tailwind, according to CEO David Solomon, is AI spawning " enormous opportunities " for the bank. 

2. Buy the dip, Wedbush says. Last week's drop among tech stocks shouldn't scare away investors , according to Wedbush. A strong earnings report, buoyed by the ongoing AI craze, should keep them soaring, strategists said. But JPMorgan doesn't see it that way, saying prices are already stretched .   

3. China's economy beat analysts' expectations. The country's GDP grew 5.3% in the first quarter of 2024, according to data published by the National Bureau of Statistics on Tuesday. It's a welcome return to form for the world's second-largest economy, although below-par new home and retail sales remain a cause for concern .

3 things in tech

1. Amazon Prime Video viewers are giving up on its shows. Leaked documents show viewers are fed up with the streamer's error-ridden catalog system , which often has incomplete titles and missing episodes. In 2021, 60% of all content-related complaints were about Prime Video's catalog.

2. Eric Newcomer is bringing his Cerebral Valley AI Summit to New York. The conference, originally held in San Francisco, is famous for producing one of the largest generative AI acquisitions ever. Now, it's coming to New York in June .

3. OpenAI is plotting an expansion to NYC. Two people familiar with the plans told BI that the ChatGPT developer is looking to open a New York office next year. That would be the company's fifth office, alongside its current headquarters in San Francisco, a just-opened site in Tokyo, and spots in London and Dublin.

3 things in business

1. America's young men are spending their money like never before. From sports betting to meme coins, young men are more willing than ever to blow money in the hopes of making a fortune .

2. Investors are getting into women's sports. With women like Caitlin Clark dominating March Madness headlines, investors see a big opportunity. BI compiled a list of 13 investors and fund managers pouring money into the next big thing in sports.

3. Bad news for Live Nation. The Wall Street Journal reports that the Justice Department could hit the concert giant with an antitrust lawsuit as soon as next month. Live Nation, which owns Ticketmaster, has long faced criticism over its high fees.

In other news

Blackstone hires Walmart AI whiz to supercharge its portfolio companies .

Taylor Swift, Rihanna, Blackpink's Lisa: Celebrities spotted at Coachella 2024 . 

NYC's rat czar says stop feeding the pigeons if you want the vermin gone .

A major Tesla executive left after 18 years at the company amid mass layoffs .

Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say .

New York is in, San Francisco is very much out for tech workers relocating .

AI could split workers into 2: The ones whose jobs get better and the ones who lose them completely .

Oh look at that! Now Google is using AI to answer search queries .

A longtime banker gives a rare inside look at how he is thinking about his next career move, from compensation to WFH .

Clarence Thomas didn't show up for work today .

What's happening today

Today's earnings: United Airlines, Bank of America, Morgan Stanley, and others are reporting . 

It's Free Cone Day at participating Ben & Jerry's stores. 

The Insider Today team: Dan DeFrancesco , deputy editor and anchor, in New York. Jordan Parker Erb , editor, in New York. Hallam Bullock , senior editor, in London. George Glover , reporter, in London.

Watch: Nearly 50,000 tech workers have been laid off — but there's a hack to avoid layoffs

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