Dell Computer Corporation is a premier provider of computer products and services, founded in 1984 on a simple concept of selling computer systems directly to customers. This ‘direct business model’ is designed to eliminate retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations and allows the company to build systemsto order. Over the past few years Dell has grown from number five in the personal com¬puter market to number one at the end of 2002 (see table 1 below). Much of that growth came in the key US market where Dell improved its share from 24.1 to 29.2 percent in 12 months at the expense of clos¬e rivals HP and Gateway (source: IDC). As a measure of added shareholder value, a $100 invested in Dellstock on flotation in 1988, was worth $28,300 by the end of the firm’s finan¬cial year in February 2002.
Table 1 Top Five PC Computer Companies (2002)
PC Market Share
Source: IDC, 2000
The company’s rise to market leadership is reputed to be as a the result of a persistent focus on delivering the best possible customer experience by directly selling computing products and services based on industry-standard technology. The absence of shops and middlemen means Dell cansell its goods more cheaply than rivals. It is a struc¬tural advantage that Dell’s main competitors, Hewlett-Packard and IBM, do not have. The company builds to order and has fo¬cused on markets where there is high vol¬ume and standardised technology. Thus, Dell’s research and development budget is relatively small ($500m) and dwarfed by its rivals. Also, while for example, Apple drives sales withproduct innova¬tion, Dell does so with its ‘business model’ (see below).
In addition to supplying notebook and desktop computers, including monitors, peripherals and software), Dell had recently moved into the areas of:
Servers for business-critical applications, including e-mail, database and high-performance computing environments.
Storage products to protect vital data.Switches in the form of standards-based network switches that connect computers and servers in small- to medium-sized networks or in the branch offices of larger organizations.
Workstations for highly-complex applications, such as three-dimensional computer-aided design, digital content creation, software development and financial/economic modelling.
Worldwide Operations and Global Markets
Thecompany manufactures its computer systems in six locations: Austin, Texas; Nashville, Tenn.; Eldorado do Sul, Brazil (Americas); Limerick, Ireland (Europe, Middle East and Africa); Penang, Malaysia (Asia Pacific and Japan) and Xiamen, China (China).
Dell Asia Pacific – Japan is headquartered in Singapore and Japan and has operating subsidiaries in: Australia, China, Japan, Korea, Hong Kong,India, Taiwan, Malaysia, New Zealand, Singapore and Thailand.
9Dell Europe, Middle East and Africa region is headquartered in the United Kingdom with Operating subsidiaries in: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Poland, South Africa, Spain, Sweden, Switzerland and United Arab Emirates.
Dell’s Chairman and CEOHead of Dell Computer Corporation and a self-made billionaire, is Michael Dell (born 1965), who began training for a career in medicine but abandoned his studies in his first year when he first recognised the opportunity for the business. The most surprising thing about him is that despite all his success, Michael Dell lives in a state of apprehension.
“As a general principle I live in fear...