In this report, we are going to analyse one of the fastest growing computer companies of our times - Dell Computer Corporation.
Dell is a premier provider of products and services required for customers worldwide to build their information-technology and Internet infrastructures. Dell, through its direct business model, designs, manufactures and customizes products and services to customer requirements, and offers an extensive selection of software and peripherals.
Dell is the first to design its own computer system. In 1991, Dell introduces its first Latitude notebook computer. In 1992, it was included among Fortune 500 roster of world’s largest companies.
Dell is able to achieve its success due to their motto:
Dell was founded in 1984 by Michael Dell, the longest-tenured executive to lead a company in the computer industry. The company is based on a simple concept: by selling computer systems directly to customers. Within the 1990s, Dell ranked of the top-five computer system maker worldwide and for the fist time Dell has been included among Fortune 500 roster of the world’s largest companies.
Dell's climb to market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling standards-based computing products and services.
In the year 2000, Dell became the number one in the worldwide workstation shipments and their sales via Internet reach $50 million per day. In the following year, dell is no. 1 in United States for the standard architecture server shipment and also ranked top in the global market share.
Dell's success is built on a foundation of personal and professional integrity. They hold themselves to standards of ethical behaviour that go well beyond legal minimums. They never compromise these standards and will never ask any member of the Dell team to do so either. Dell believes that the success without integrity is essentially meaningless.
Dell’s success in the computer industry is due to its business model - to provide ease of navigation, usability and affordability to its end user, as well as the advantage of a more powerful information technology for its customers to improve on their businesses and personal lives. It’s formulae for success comes with the revolution of the IT industry, which aims to make computing accessible to its end user globally, regardless of where the location is.
Dell’s business model focuses on understanding its customer’s needs and providing the most effective computing solution at a lower cost to meet those needs. The Business to Consumer (B2C) model they had adopted is cost effective, saves time and allows them to understand the consumer expectation with the elimination of retailers.
Being an e-tailer allows Dell to customize computers according to the expectations of the customers. On top of this, with its introduction of the latest relevant technology, they have a higher turnover rate of inventory (less than five days) as compared to their competitors. As a result, this will lead to a higher profit earning.
Dell began with the unique value proposition that it would custom build a computer, exactly as and when a customer orders it, and deliver it at a very competitive price. As all products are made to order, Dell currently maintains only three days of inventory for most parts and equipment, which keeps the environmental impact of warehousing to a minimum. Components and parts are only ordered and shipped to Dell when they are ready to be assembled into the final computer product, thereby saving energy and operational costs associated with storing inventory.
Dell's cost advantage is driven by a lack of mark-ups from the reseller channel, their close relationship with suppliers, inventory management and operational efficiency. The...
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