Dell recently suffered a number of setbacks across the world. Right before publishing its report on the second quarter of the 2007 fiscal year, Dell has changed its tough stance on negative events and has taken the positive, proactive measure of recalling all notebook batteries that might pose a danger to customers and are 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, the 8,999 yuan Dell computer was mistakenly advertised for 975.78 yuan, resulting in a frenzy of online orders. When the problem was discovered, Dell refused to sell the servers at the advertised price, causing 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 too that Dell's President and CEO Kevin B. Rollins will soon leave his post.

What's wrong with Dell? In the Chinese market, should Dell pay more attention to common customers, or remain focused on its relationship with the government and its corporate clients?

In the past few months, three or four fire accidents have been reported to Dell (no incidents have been reported in China) in relation to some of their notebooks. Dell claims that the cause of these accidents was the lithium batteries the notebooks run off. However, this cause has not been proved conclusively in all cases. Dell failed to take measures to prevent further problems following the reports of fires. They waited until August 15 to recall approximately 4.1 million Dell lithium batteries manufactured by Sony Corporation across the world. They have explained that the batteries may overheat resulting in a potential fire hazard.

Nevertheless, Dell was too slow to respond. According to reports from foreign media, Dell recalled some 22,000 notebook batteries on October 16, 2005. The company has had some experience in dealing with problems with notebook batteries. In the future, Dell should be equipped to address the problem in a more prompt manner.

So far there is no reason to think Dell laptops in China have been affected by this latest problem. However, in the era of global information technology, any negative incident affecting a global company may cause a chain reaction.

The processor mislabeling incident woke Chinese consumers to Dell's arrogant service attitude. It even ignited an ethnic complex in Chinese consumers who felt that Dell showed particular disdain to the rights of Chinese consumers. If Dell had offered to fully reimburse customers as soon as the problem emerged, it would not have faced a lawsuit. Now some Dell customers have hired lawyers to sue Dell for commercial fraud and are demanding they be refunded and compensated for their trouble. It is too late now for Dell to offer full reimbursement to these customers.

Dell also faces the problem of the quotation system error in China. However, they maintain the position 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 it could buy to five. 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 been mired into a crisis.

Dell's biggest problem is that all these incidents occurred within such a short period of time.

Due to its unique marketing system, Dell has focused on large clients in China such as the government and business rather than individual consumers, which may endanger its viability in the country.

By People's Daily Online