Dell Case Study

The company that I chose to do my case analysis on is Dell computers. Many companies start out as very aggressive but get crashed either by its competitor or by poor strategic management. Dell Computer's entered the market with strong strategic vision and stronger strategic management. One of the biggest strengths that Dell has is its simple business concept which is building personal computers built to order and selling it directly to its customers. This simple notion gives Dell several competitive advantages over its competitor. One it is bypassing distributors and retail dealers which eliminated the markups of resellers, and two building or order greatly reduced the costs and risks associated with carry large stocks of unneeded inventory. As a major competitor in the personal computer market, Dell's focus on efficiency of manufacturing, and a direct marketing approach, that allows the company to continue gaining ground on the competition.

Dell was established in 1984 by Michael Dell, a college student pursuing a degree in medicine who also happened to have a hobby of building computers. He decided to sell the product of his hobby, and began the business in his dorm room. Business quickly took off, and today ranks among the world's largest computer systems companies. As the CEO of Dell Computer Corp. he started the company with a mere 1000 and has turned it into a multi-billion dollar computer giant. Dell Computer was first known as PCs Limited in 1984, selling PC components and PCs under the brand name PCs Limited. Dell's strategy was to sell directly to end users; by do away with the retail markup, Dell was able to sell IBM clones below IBM PC price. Michael Dell sought to refine the company's business model, add needed production capacity, and build a bigger, deeper management staff and corporate communications while at same time keeping costs low. It first international offices were opened in 1987 and was renamed Dell Computer and eleven years later it became a public company. In 1997, Dell created an internal sales and marketing group dedicated to serving the individual consumer segment and introduced a product line designed specially for individual users. By late 1997, it became the industry leader in keeping costs low and compresses efficiency out of direct sales and build-to-order business model

Mission statement:

Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of:

* Highest quality

* Leading technology

* Competitive pricing

* Individual and company accountability

* Best-in-class service and support

* Financial stability

Dell's target market consists of large corporate accounts, medium and small businesses, and the consumer business. Dell has set out to satisfy each different customer segment through its Direct Model. In order to continue being successful, Dell has to make sure that it produces the right PCs that would be satisfying to customers, and take advantage of the opportunities that are available their goal is to be the most successful computer company in the world at delivering the best customer experience in markets we serve.

"Dell develops manufactures, sells and supports a wide range of personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, computer peripherals, and more. As of 2006 Dell employs more than 63,700 people worldwide and manufactures more computers than any other organization in the world. According to the Fortune 500 2006 list, Dell ranks as the 25th-largest company in the United States by revenue. (Wikipedia)"

Dell's complete range of high-performance computer systems include: Dell Dimension and OptiPlex desktop computers, Latitude and Inspiron notebook computers, Dell monitors, LCD/plasma TVs and projectors for HDTV and monitor, and Power Edge network servers along with other products. The companies' products and services are sold in more than 140 countries and territories to customers extending from major corporations, government agencies and medical and educational institutions to small businesses and individuals. Headquarters are located in Round Rock, Texas, Dell plants in Nashville, Tennessee in Austin, Texas and in Winston-Salem, North Carolina, with servers built in Austin, Texas. Dell, Inc. assembles computers for Europe in Limerick in the Republic of Ireland and is in current talks with building anther plant in China (Dell).

The top six competitors to Dell are IBM, Hewlett-Packard, Apple Computer Inc., Cisco Systems, Xerox Corp., Gateway Computers, etc...

Dell's Financial Status

1. Enterprise Value: 51.53 Billion

2. Revenue: 57.88 Billion

3. Gross Profit Margin: 9.95 Billion

4. Operating Margin: 6.85%

5. Profit Margin: 5.10%

Strategic Goals

* Continue to offer first class customer service and tech support.

* Continue to expand into other IT products and services.

* Continue expansion of server and storage products to capture a greater share of the market.

* Continued expansion of Printer and multifunction units to capture a lager share of the market.

* Continue refining and reform the direct approach to manufacturing, selling and servicing personal-computing systems.

* Market new products to existing customer base.

* Produce products with better profit margins.

* Analyze the benefits of strategic partnerships and outsourcing non-core functions.

* Continued commitment of resources to Research & Development to stay on the cutting edge of Information Technology