Dell Computer Essay, Research Paper

DELL COMPUTER

Company Summery

Dell Computer Corporation was established in 1984 and today ranks among the universe s largest computing machine systems companies. Dell pioneered the constructs of selling personal computing machine systems straight to clients ; offering build-to-order computing machine systems ; and supplying direct, toll-free proficient support and next-day, on-site service. The company designs and customizes merchandises and services to end-user demands, and offers an extended choice of peripherals and package.

Dell s complete scope of high-performance computing machine systems include: Dell Dimension and OptiPlex desktop computing machines, Latitude notebook computing machines, and PowerEdge web waiters. The company s merchandises and services are sold in more than 140 states and districts to clients widening from major corporations, authorities bureaus and medical and educational establishments to little concerns and persons. The company employs about 11,000 people. Headquarterss are located in Round Rock, Texas, with fabrication installations in Austin, Texas ; Limerick, Ireland ; and Penang, Malaysia.

Dell Computer & # 8217 ; s concern scheme is centered around its direct concern theoretical account and customer-focused enterprise aimed at presenting the best client experience through direct, client relationships, concerted research and development with engineering spouses, made-to-order computing machine systems and service and support plans tailored to client demands. Dell believes that this attack provides it with several competitory advantages. The attack eliminates the demand to back up an extended web of wholesale and retail traders, thereby avoiding typical trader mark-ups ; avoids the higher stock list costs associated with the wholesale/retail channel and the competition for retail shelf infinite ; and reduces the obsolescence hazard associated with merchandises in a quickly altering technological market. In add-on, direct client contact allows the Dell Computer to keep, proctor and update a database of information about clients and their current and future merchandises and service demands, which can be used to determine future merchandise offerings and post-sale service and support plans. This direct attack, combined with the company & # 8217 ; s efficient procurance, fabrication and distribution procedures, allows the company to convey relevant engineering to its clients faster and more competitively priced than many of its rivals.

Company History

The company was plagued by direction alterations during the mid-1980s. Renamed Dell Computer, it added international gross revenues offices in 1987. A twelvemonth later it started selling to authorities bureaus and added a sales-force to function larger clients. That twelvemonth Dell went public in a $ 34.2 million offering.

Dell tripped in 1990, describing a 64 % bead in net incomes. Gross saless were turning, but so were costs, largely because of Dell & # 8217 ; s attempts to plan a Personal computer utilizing proprietary constituents and RISC french friess. Besides, the company & # 8217 ; s warehouses were oversupplied. Within a twelvemonth Dell turned itself around by cutting stock lists and coming out with eight new merchandises.

Dell entered the retail sphere by allowing Soft Warehouse Superstores ( now CompUSA ) in 1990 and office supply concatenation Staples in 1991 sell its Personal computers at mail-order monetary values. Besides in 1991 Dell opened a works in Limerick, Ireland.

In 1992 Xerox agreed to sell Dell machines in 19 Latin American states. That twelvemonth Dell sold a new line of Personal computers through Price Club ( now Price/Costco ) . Dell opened subordinates in Japan and Austria in 1993 and began selling Personal computers through Best Buy shops in 16 US provinces.

The computing machine shaper abandoned retail shops in 1994 to refocus on its mail-order beginnings. The company took a $ 40 million charge to revise its troubled notebook computing machine line and later that twelvemonth released its Latitude notebook to general acclamation. The company besides introduced a line of waiters.

In 1995 the house offered Pentium-based notebooks, and hastened the involvement in its desktops by cutting monetary values and let go ofing a dual-processor Personal computer. The undermentioned twelvemonth Dell ramped up its attempts in the Asiatic computing machine market with new mail-order service in Hong Kong, Japan, and Singapore ; a new Asia/Pacific Customer Center in Malaysia ; and direct-sales operations in South Korea and Taiwan.

In 1997 Dell and Toronto-based Newcourt Credit Group formed Dell Financial Services, a joint venture that will supply funding for Dell clients. That twelvemonth Dell besides announced programs to come in the market for technology, analysis, and design computing machines called workstations. Dell built up its consumer concern in 1997 by dividing that operation from its small-business unit and get downing a leasing plan for persons.

The Dell Direct Model

Dell & # 8217 ; s award-winning client service, industry-leading growing and fiscal public presentation continue to distinguish the company from rivals. At the bosom of that public presentation is Dell & # 8217 ; s alone direct-to-customer concern theoretical account. & # 8220 ; Direct & # 8221 ; refers to the company & # 8217 ; s relationships with its clients, from home-PC users to the universe & # 8217 ; s largest corporations. There are no retail merchants or other resellers adding unneeded clip and cost, or decreasing Dell & # 8217 ; s apprehension of client outlooks. Why are computer-systems clients and investors progressively turning to Dell and its alone direct theoretical account? There are several grounds:

& # 183 ; Price for Performance. By extinguishing resellers, retail merchants and other dearly-won intermediary stairss together with the industry & # 8217 ; s most efficient procurance, fabrication and distribution procedure Dell offers its clients more powerful, more richly configured systems for the money than rivals.

& # 183 ; Customization. Every Dell system is built to order. Customers

acquire precisely, and merely, what they want.

& # 183 ; Service and Support. Dell uses cognition gained from direct contact before and after the sale to supply award-winning, tailored client service.

& # 183 ; Latest Technology. Dell & # 8217 ; s efficient theoretical account means the latest relevant engineering is introduced in its merchandise lines much more rapidly than through slow-moving indirect distribution channels. Inventory is turned over every 10 or fewer yearss, on norm, maintaining related costs low.

& # 183 ; Superior Shareholder Value. During the last financial twelvemonth, the value of Dell common stock more than doubled. In 1996 and 1997, Dell was the top-performing stock among the Standard & A ; Poor & # 8217 ; s 500 and Nasdaq 100, and represented the top-performing U.S. stock on the Dow Jones World Stock Index.

Rivals

Acer IBM* Tandy

Apple Computer Matsushita Toshiba

Canon Micro Warehouse Unisys

Compaq** Micron Technology Siemens

Digital Equipment NCR Sony

Fujitsu Oki Electric Sun Microsystems

Gateway 2000** Packard Bell Sharp

Hewlett-Packard Philips Electronics Hitachi

SWOT ANALYSIS

Strengths

& # 183 ; High public presentation and Low monetary value

& # 183 ; Direct selling

& # 183 ; High sensitiveness of the client demands ( because it sells direct and has direct contact with its clients )

& # 183 ; Custom Configured merchandise

& # 183 ; Catalog/mail out database of client

& # 183 ; Its committedness to sold comparative high quality, comparative low monetary value merchandises that are custom configured

& # 183 ; Have the best client satisfaction in the industry: guarantee bundles, installing, care, fix services, and user support

& # 183 ; Service Innovation & A ; Recognition

& # 183 ; Value added service

& # 183 ; The 2nd largest Personal computer industry in the U.S. market and the 3rd largest Personal computer in the universe, rank at 190 place in the Fortune 500

& # 183 ; Efficient distribution channel maintain the production cost low

& # 183 ; A significant cost advantage coming from the reseller s markup, the costs and hazards associated with transporting big stock lists of finished goods

Failings

& # 183 ; Stock Keeping Unit / Inventory

& # 183 ; Not hold so many merchandise lines ( 2 for desktop, 2 for laptop/notebook and 2 for workstation )

& # 183 ; Lacked of / neglected laptop computing machines / Notebook, which is the hottest spot of the Personal computer market

& # 183 ; Lack of diversifying distribution channel ( excessively much focal point on the direct channel )

& # 183 ; Its stock control and merchandise prediction systems could non maintain up with its growing

& # 183 ; Dependent excessively much on the Wintel architecture. Dell Computer is the lone industry who uses no other trade name processor except Intel and the lone industry who offers an operating system from Microsoft for all of its wide scope of merchandise.

Opportunities

& # 183 ; Fastest Turning market in the Notebook section

& # 183 ; International Growth chance ; Japan ( Dell is the 9th largest local seller in Japan ) , Korea, Europe, Asia, Africa

& # 183 ; To be the most prima computing machine industry in footings of efficiency, net income border, return on equity ( ROE ) and invention

& # 183 ; Personal computer s is a immense market ( Every individual buys about 3 Personal computers every 10 old ages, The U.S. statistics )

& # 183 ; Huge opportunities to come in the derivation of the Personal computer market, such as package, pressman, scanner, and peripherals.

& # 183 ; Develops and markets its ain operating systems that built based on the order of its client

Menaces

& # 183 ; Wintel Architecture

& # 183 ; Government Regulation, such as Recycling, EPA

& # 183 ; Because of its chief client is big company, it means they have a purchasing power and this could squash its net income border

& # 183 ; Gateway 2000 is the closest rival which has the same scheme ( direct selling, cut grade up cost, usage build computing machine and aim the same section client ; such as in-between size and large corporation clients ) . In add-on, Dell has to confront caput to head competition with Gateway 2000 in the same state ; because both of them have the workss in the same state: Ireland & A ; Malaysia.

& # 183 ; Short merchandise life rhythm of the semiconducting material from 5 old ages to 3 months ( Rapid engineering rhythms ) .

& # 183 ; Operating in one of the most competitory concern in the history.

& # 183 ; Product Transitions.

& # 183 ; Production Forecasts / high grade of uncertainness demand.

& # 183 ; Technology criterions and Key licences.

& # 183 ; Credit Risk

& # 183 ; Year 2000 Conformity

Bibliography

& # 8220 ; Imparting their energies & # 8221 ; ; by Paley, Norton ; Gross saless and Marketing Management magazines.

& # 8220 ; THE POWER OF VIRTUAL INTEGRATION: AN INTERVIEW WITH DELL COMPUTER S MICHAEL DELL & # 8221 ; ; by Magretta, Joan ; Harvard Business Review edition March-April 1998.

& # 8220 ; Dell shows that Web-based concern International Relations and Security Network T merely a dream & # 8221 ; ; by Tebbe, Mark ; Infoworld.

& # 8220 ; Dell hopes to up channel concern by traveling after regional resellers & # 8221 ; ; by Zarley, Craig ; Computer Reseller.

& # 8220 ; Dell Computer Corporation & # 8221 ; ; Hoover s Company Profiles ; WWW.HOOVERS.COM

& # 8220 ; Compaq Computer Corporation & # 8221 ; ; Hoover s Company Profiles ; WWW.HOOVERS.COM

& # 8220 ; IBM Corporation & # 8221 ; ; Hoover s Company Profiles ; WWW.HOOVERS.COM

& # 8220 ; Gateway 2000 Corporation & # 8221 ; ; Hoover s Company Profiles ; WWW.HOOVERS.COM

& # 8220 ; Making the right picks for the new consumer & # 8221 ; ; by Dell, Michael S ; Managing Service Quality.

& # 8220 ; 1997 Warp-Up and 1998 Predictions & # 8221 ; ; by Creative Consumer Selling

& # 8220 ; Service sells & # 8221 ; ; by Dell, Michael S ; Executive Excellence magazines