Dell Computer Corporation
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 systems to 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 Dell stock 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)

Computers Sold (m)

PC Market Share (%)

Growth (2001) (%)

Dell 5.22 16.0 23.3

HP 5.04 15.5 - 4.9

IBM 1.96 6.0 -2.2

Fujitsu 1.39 4.3 8.0

NEC 1.06 3.3 15.0
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 can sell 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 with