Dell Situation Analysis and SWOT
By: Nicole Saathoff
Dell was started in 1984 by a college student, Michael Dell. Dell started the company off out of his college dorm room. He bought IBM compatible computer parts at wholesale prices and built computers that resembled IBM models. He sold them to people looking for a PC but not wanting to pay the retailer prices. After making $80,000/mo, he dropped out of college and started Dell Computer Corp.(Free Encyclopedia of Ecommerce) He started advertising and selling computers through telephone orders, and because he used no middleman, he was allowed to sell machines lower than competition. It took no time for him to become the leader in mail order PC sales. Because of this growth, he put together a marketing team and hired a company president. Dell appointed himself CEO of the company, and started expanding his company by making his mark in international sales. He started manufacturing facilities, a national customer support center, offered on-site setup, maintenance, and repair for his products. Dell began targeting clients on a larger scale, such as corporations, schools, and government entities but also serve smaller businesses and home users. In 1988 they sold their first share for $8.50, and started working to upgrade its machines. (Free Encyclopedia of Ecommerce) They became one of the first to create file servers, and began working to incorporate Intel’s microprocessor. By 1990, 40% of their revenue came from corporations, but because of research and development costs and inventory surplus, profits plunged to 64%.(Free Encyclopedia of Ecommerce) Today, Dell continues to grow internationally and looks to move most of their product sales, service, and support to the Internet. Through the Internet and value-added services, Dell intends to continue to grow its business at a high-growth rate.
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