Dell, a major world computer company, has been exposed to a
number of significant setbacks across the world recently.
Immediately before publishing its report on the second quarter of
the 2007 fiscal year, Dell changed its tough stance on negative
events and has taken the positive, proactive measure of recalling
all notebook batteries that could pose a danger to customers, and
they're fully refunding all Chinese customers affected by processor
mislabeling.
However, even before these recent dramas surfaced Dell was
experiencing problems. Due to a quotation system error their 8,999
yuan (US$1,128) computer was mistakenly advertised at 975.78 yuan
(US$122), resulting in a frenzy of online orders.
When the problem was discovered Dell refused to sell the
computers at the advertised price, which caused a credibility
crisis. Consumer confidence has fallen even further as securities
analysts and investors remain pessimistic about Dell's future on
the market. Rumor has it that Dell's President and CEO Kevin B.
Rollins will soon leave his post.
So what's wrong with Dell? In the Chinese market should Dell pay
more attention to their ordinary customers or remain focused on
their relationship with the government and its corporate
clients?
In the past few months a number of fire incidents have been
reported to Dell -- none have been reported in China -- in relation
to their notebooks. Dell says the cause of the fires was the
lithium batteries that power the notebooks. However, this hasn't
been proved conclusively.?
It seems Dell failed to take measures to prevent further
problems following the initial fire reports. In August they
recalled approximately 4.1 million lithium batteries from all over
the world, which had been manufactured by Sony Corporation. They've
explained that the batteries could overheat resulting in a
potential fire hazard.
Nevertheless, Dell was slow to respond. According to reports
from foreign media they recalled some 22,000 notebook batteries in
October 2005. The company has had some experience in dealing with
problems with notebook batteries but in the future they'll need to
be better equipped to handle problems in a more prompt fashion if
they wish to hold onto their already tarnished
image.??
So far there is nothing to suggest the Dell laptops in China are
affected by this latest problem. However, in an era of global
information technology negative incidents of this kind have the
potential to cause something of a chain reaction.?
The processor mislabeling incident woke Chinese consumers up to
Dell's offhand attitude to service. It even ignited an ethnic
complex in Chinese consumers who felt that Dell showed particular
disdain to their rights as consumers.
If Dell had offered to fully reimburse customers as soon as the
problem emerged it would not be facing potential lawsuits. Some
customers have hired lawyers to sue Dell for commercial fraud and
are demanding they be refunded and compensated for their trouble.
It's too late now for Dell to offer full reimbursement to these
customers.
They also face the problem of the quotation system error in
China. However, they maintain the stance they took at the time.
Even if the customers had deliberately created a shopping frenzy, a
case like this would be a test of the company's credibility.
Currently Dell is still unwilling to fulfill its commitment to its
online quotation.
It did, however, give customers who had submitted an order a
discount of 25 percent although it limited the number of machines
available. However, customers involved in the incident are still
insisting they receive the goods at the original purchasing price.
Lawyers for the customers argue that if they made the online
payment and received a confirmation e-mail from Dell, a sale
contract exists between the two parties. If either party changes
their mind the contract is broken. Will the customers involved in
this incident sue Dell? No matter how things develop Dell has found
itself mired in a real crisis.
One of Dell's biggest problems is that all these incidents
occurred within a very short space of time. Due to its marketing
system Dell has focused on large clients in China such as the
government and businesses rather than individual consumers, which
could very well endanger its viability in the country.
(People's Daily Online August 18, 2006)