Dell Inc.

Part I: Introduction/Background Summary

In 1984, Michael Dell invested $1,000 in start-up capital to register his business as Dell Computer Corporation, which was known as PC's Limited. The company becomes the first in the industry to sell directly to end-users by passing the dominant system of using computers resellers to sell mass-produced computers. Dell Computer also pioneers the industry first thirty-day money back guarantee. It became the cornerstone of Dell's commitment to expand its service offerings, superior customer satisfaction, and the industries first on site service program. It also established its first international subsidiary in the United Kingdom, and raised $30 million in its initial public offering.

Part II: Problem Identification

The problem with Dell Inc. was the rapid growth within the company in their beginning stages.

Part III: Researching Internal and External Factors

Dell's strengths were oriented around listening to the customers, responding to the customers, and delivering what the customer wanted. The direct relationship was first through telephone calls, then through face-to-face interactions, and now through the internet. It has enabled them to benefit from real-time input from real customers regarding products and future products they would like to see developed. The company also doesn't use reseller or retail channels because every computer is built-to-order, which allows less inventory. The direct model allows them to take the pulse of whatever market and provide the right technology for the right customers.

Dell Inc. weakness was cell manufacturing because their assembled computers were being shipped five to six days after the order was placed. It is an inconvenience for the customers to always send their computer away to have it repaired. First, they are left without internet access. Second, the time it reaches Austin, Texas, have it repaired, and shipped back can take days. The company opportunities were the Dell U.K. that open business in 1987 and in that country it was a lot of companies selling cheap computers. Dell Inc. strides on loyalty among customers and employees, and that could only be derived from having the highest level of service and performing products. Segmentation within the company enables them to measure the efficiency of the business in terms of assets use. Dell Inc. evaluates their return on invested capital in each segment, compare it with other segments, and target what the performance of each should be.

It became a great way to identify what needed to happen for them to reach their full potential in each business. The threat within the company started with selling indirect to retail channels like Comp USA, Price Club, and Sam's. Dell Inc.

didn't have an idea as to whether or not they actually were making money on those companies. Inventory was also a threat because it depressed their earnings.

Part III: SWOT Analysis

Strengths

• Direct Sales

• Built-to-order

• Designing own products

• Target large companies

• Efficient and flexible manufacturing operations

• Great customer service and tech support

• High quality computers

• Low prices

• Long term partnership

• Complete Care Accidental Damage Service

• Id tags in new computers

Weakness

• Sending your computer back to Dell Inc in Austin, Texas

• Cell manufacturing

• Unopened products from partnerships

• Handle tech support over the phone

Opportunities

• Global expansion

• Direct store kiosks

• R&D organizations

• Speaking directly to customers

• Expansion in difficult products

• External storage devices

• E-commerce technology

• White-box segment (unbranded)

• Segmentation

• Server business

• Printer market

• Adverting

• Website

• Premier pages

Threats