Company: story of the company, and its quick success.
Dell Industry: Dell market environment, revenues sales, competitors. How buyer behavior is influencing Dell: Is customer opinion listen by Dell? Market segmentation of Dell: Does Dell divide their customers according to their needs? Market Mix of Dell: the four P, pro
Dell Computer is one of the world’s leading electronics makers. It was established in 1984 by Michael Dell. Mr. Dell began his own business at age 18, when he was a freshman at the University of Texas. Operating out of the campus, Michael Dell would buy surplus of computers from retailers, add feature them customers request or need and sell them by phone, mail or door to door (Verespej, 1998). Because of the great return which he received out of this small business, Michael Dell founded and registers Dell Computer Corporation 1984 (http://www.1000ventures.com/business_guide/cs_im_dell.html). Dell Corporation has redefined competition in the computer industry by more closely integrating the activities of suppliers, manufacturers and consumers (Verespej, 1998). Dell has cut out the middle man on sales of PC and electronics by going direct to individual customers, small business, corporations and organizations. The buyers can personalize according to their needs and requirements and can place an order via phone, fax or internet. At the time when Dell Computer was established in 1984, it was turning over 80,000 USD in sales a month. In its first eight years, Dell grew its sales and revenue by about 80 per cent a year, and from 1993 to 1999, it grew them by 55 per cent a year (Dell, 1999). From 1989 to 1999, sales went from 159 million USD to 18 billion USD (Kennedy, 1999). In the same year revenue reached 6.1 billion USD and net income of 607 million USD (Korzenowski, 1999), with Interne sales alone generating 14 million USD a day in orders (Littlewood, 1999). Dell plan is to control 20-25 percent of the global PC market share (Brown, 1999). Dell Computer is growing more than twice as fast as any of its competitors (Serwer, 1998). Fortune 500 ranks Dell number seven in return on stockholders’ equity, ahead of world leading brands like Coca-Cola, Intel and Microsoft (Serwer, 1998) While other computer companies struggled due to economic problems in Asia in 1998, Dell Computer had sales increases of 35 percent in Japan and the Asia Pacific and 73 percent in Europe, the Middle East and Africa. Overall revenue and net income increases 54 and 62 per cent for these markets in the first half of fiscal 1999 (Verespej, 1998). In 1998, only 32 percent of dell’s sales were outside of America. In recognition of expansion opportunities, it opened a plant in China in 1998 and one in Brazil in 1999, to complement existing plants on Austin, Ireland and Malaysia (Verespej, 1998). The split adjusted stock value of Dell stocks increased over 35,000 per cent, from 1,000 USD at the time of its initial public offering in 1984 to 373,588 USD on 2 November 1998 (Verespej, 1998). Dell Computer has not been success, success all the way. Dell grew 126 per cent in 1992, yet by the following year it was into its seventh consecutive quarter of negative cash flow, and it had to abandon its new line of portable computers due to poor production planning (Bird, 1997). The company wrote off 40 million USD in 1993 as a result. It also made another error by venturing into retailing, which at the time was thought to be a substantial growth market. The Dell brand was not well positioned in the retail market. On the shelves, the Dell PCs sat between Compaq’s, which were better known and better regarded, and Packard Bell’s, which were cheaper (Bird, 1997). It also found that its direct sales to consumers cause problems for its relationship with retailers, which needed to sell the PCs at a higher price to make a margin. The company was forced to write off another 94 million USD. Dell’s...
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