Case Study: Dell Inc.-2005
Submitted to: Dr. Ali Askari
Submitted by: Group 10
Asadullah Fahad Umar M. Umaid Khan
• Dell started from Michael Dell’s dorm room at University of Texas in 1983. • He used to assemble computer systems on order and within a year his sales reached approximately $80’000 a month. • He founded the company in 1984 with the name PCs Ltd, which was changed to ‘Dell Computer Corporation’ in 1988. • The company adopted the built-to-order concept in order to improve the profit margins and to reduce the costs and risks of holding inventories. • From 1990 to 1994, due to large scale operations, the company started retailing as well but discontinued the practice in 1994 due to reduced profit margins associated with retailing their products. • Initially, Dell used to sell through mail and phone orders. In 1988, they added a sales force to enhance their partnerships with corporate and government customers. In 1994, they started selling through their website and by 1999 they were the largest internet retailer. • Due to cost implications, Dell focused more on the corporate and government customers and ignored household consumers. • Within 20 years, Dell had grown to be the largest PC supplier in the World with a global market share of 18%.
It’s the way we do business. It's the way we interact with the community. It's the way we interpret the world around us-- our customers needs, the future of technology, and the global business climate. Whatever changes the future may bring our vision -- Dell Vision -- will be our guiding force.
Dell's mission is to be the most successful Computer Company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: • Highest quality
• Leading technology
• Competitive pricing
• Individual and company accountability
• Best-in-class service and support
• Flexible customization capability
• Superior corporate citizenship
• Financial stability
• Michael Dell assumed the position of the chairman of the board of directors and Kevin Rollins was the president and the C.E.O. • Dell’s operations are divided into three Geographic regions; the Americas, Europe, Africa and Middle East, and Asia Pacific. • The Americas segment included North America, Central America, and South America. The segment was based in Round Rock, Texas and accounted for 67% of the total revenue and 70% of the total operating income. Dell was the market leader in Americas with 29% market share. • The European segment accounted for 19% of total operating income and Dell had captured 11.7% market share. • The Asia-pacific segment accounted for 11% of the total operating income and Dell enjoyed 8.3% market share in the region.
• Dell had 6 manufacturing facilities worldwide; 3 in the Americas region, 2 in the Asia-Pacific region, and 1 in the European region. • These facilities are used for assembly, testing, and quality control of the computer systems.
• Dell used varying sales and marketing approaches across its customer groups. • The customers are categorized into: Relationship, Transactional, and Internet. • Relationship customers include corporations and government institutions. Dell maintains a field sales force to maintain good relationships with this group. • Transactional customers are small scale enterprises and individuals. Dell communicates with them through print and electronic advertising as well as direct marketing publications. • Internet customers access Dell through their website and place...