AMERICAN INTERNATIONAL UNIVERSITY – BANGLADESH
* Course Name
* Introduction to Business
* Course Code
* Prepared For
* Tasnuva Farin
Prepared By ID No. *
Sarkar Shila 13-23378-1
| Case Name
| Page No.
| Dell Computer Corporation : An Example of Free Enterprise
| 03 - 08
| Esprit is No Longer ‘Little Utopia’
| 09 - 15
DELL COMPUTER CORPORATION
AN EXAMPLE OF FREE ENTERPRISE
Questions for Discussion
* Question 1: How does an entrepreneur like Michael Dell view profit? From the point of view of an economist or from a business perspective? Explain.
Dell Computer Corporation is the world’s largest direct computer system company, with revenues of $25.3 billion for the fiscal year ended January 28, 2000. Dell Computer Corporation, originally known as PC’s Limited, an international computer firm headquartered in Austin, Texas, designs, manufactures, sells, and services IBM-compatible personal computers.
Michael Dell profit view was about logical theory. One day Dell asked himself. Did the owner add any equipment to the value? And he found the answer negative. So he came up with a new idea.
He sold computers directly to the customers. He used direct advertising, telemarketing, salespeople. By selling product directly to customers, any Company could efficiently understand and satisfy the exact needs of customers. If an entrepreneur thinks like Michael Dell he will be able to get profit from his business.
Economic profit is a measure of cost beyond accounting profit. What remain after the expenses and opportunity costs are subtracted from income and all costs of making and selling a product, including taxes is called economic profit. As an example, I’m earning 10,000/= by working in X company but I can earn 15,000/= by working in Y company. So my opportunity cost is 5,000/=.
A businessman wants to get more profit from his business. If a businessman sells his product in an actual rate then he won’t be able to get any profit from that. So he adds more rates with the actual rate to get profit. Profit is the major perspective of business. As an example if I buy a car of 12, 00,000/= & then I sell it to a customer about 16, 00,000/=. So my profit is 4, 00,000/=.
* Question 2: How can competition alter the plans of successful business leaders such as Michael Dell?
Dell was founded by Michael Dell in 1984 with a capital of just $1000. Four years later, Dell shares were sold for $8.50, and the IPO raised $30 million. In this journey he faced a lot troubles. His goal was simple and he was stick with his goals.
* Selling computer components and kits internationally and directly to the customers.
* Reducing the costs and risk associated with carrying large volumes of both and finished goods. * Taking care of customer taste so that customer won’t look for another choice.
* Innovating product with unique design for elders in PC market, Elder PC would definitely become a great assistant for elders to improve their living quality.
Michael Dell has been absolutely brilliant at getting the industry to compete on his best basis for competition price, delivery, and the ability to configure to order.
* Question 3: What characteristics of the free enterprise system permitted Michael Dell to start and operate his business?
Private businesses are able to conduct business activities competitively with minimal government regulation is called Free Enterprise. Michael Dell permitted two characteristics...
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