Friday, July 28, 2006

Is Refocusing the Remedy for Dell's Problems?

Laura Ries diagnoses Dell's problems as stemming from its expansion to the consumer market. She attributes expenses and customer satisfaction issues to an increase in volume of customer service calls by home users.

Her remedy? Refocus. This recommendation should come as no surprise to those familiar with Ries's philosophy. In this case, she suggests restoring Dell's focus on the business market.

Refocusing on a market segment is almost never an appealing or intuitive strategy. It seems like a deliberate effort to reduce the number of customers and your market share. But sometimes you have to bite the bullet. It's often better to have a strong brand in small market than a weak brand in a large market.

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