DELL Research Paper 1. A history on the origins of the company. a. Dell was founded by Michael S. Dell in May 1984. b. Mr. Dell began the company from his University of Texas dorm room. c. He bypassed the retail outlets and sold his computers directly to consumers. This allowed him to eliminate the retail mark-up and sell his PCs at about 40% of an IBM PC. d. In 1988 the company went public and began selling to larger customers such as government agencies.
e. The company built its fortune with the Microsoft’s Windows operating systems and Intel microprocessors as its foundation.
Other options for Dell computers are chips from AMD and a version of Linux f. In 2007 the company began selling through retail stores such as Wal-Mart and Best-Buy. g. It is headquartered in Round Rock, Texas h. Dell generates nearly half of its profits outside of the US. i. Dell has manufacturing and distribution units in China, India and Malaysia Overview The company made major investments in its call center and development units in India.
Closer to home, the company closed its Austin, Texas-based desktop PC manufacturing facility in 2008.
It also shuttered customer care centers in Canada. In 2009 Dell sold its plant in Poland to Foxconn Technology, a unit of Hon Hai, the world’s largest contract electronics manufacturer, and contracted for manufacturing services with Foxconn. Generating more than half of its sales from desktop and notebook PCs, Dell faces intense competition in the consolidating market it shares with Acer, Hewlett-Packard, and Lenovo. The company’s PC sales are following an industry trend that favors mobile computers; Dell’s notebook line, its largest revenue generator, accounts for almost a third of its sales.
The company also made additional efforts to spur sales with high-end devices. Dell’s gaming and multimedia PC offerings include its XPS and Alienware lines. It debuted a luxury laptop called Adamo in 2009. Far from limited to PCs, the company also provides servers, storage devices, and networking equipment. As with its PCs, Dell’s servers are primarily Wintel devices, but it supports versions of Linux from both Red Hat and Novell on select servers, as well as the Solaris operating system. Dell’s storage line includes its PowerVault systems and devices from EMC that it resells.
In 2008 Dell acquired storage systems provider EqualLogic for $1. 4 billion. The purchase expanded Dell’s offerings for small and midsized businesses. Its PowerConnect Ethernet switches are also aimed at the SMB market. In 2009 Dell launched a portfolio of 14 new products — including servers, workstations, storage systems, and third-party IT management software — aimed at lowering costs in corporate data centers. The integrated product line competes with the comprehensive offerings of its chief rivals in the enterprise market, HP and IBM.
Also that year the company made its long-rumored entry into the smartphone market, debuting a wireless handset called the Mini 3, which is based on the Android mobile device software created by Google. Dell will distribute the phone through China Mobile, which has more than 500 million subscribers, and Claro, a unit of America Movil that serves more than 42 million customers in Brazil. It also struck a deal for AT to carry the phone in the US. The Android software is being utilized by a number of smartphone manufacturers, including HTC, LG Electronics, Motorola, and Samsung Electronics.
The company’s software and peripherals segment encompasses Dell-branded displays and printers, as well as third-party peripherals, consumer and enterprise software, digital cameras, printers, and televisions. Though not as acquisitive as some of its rivals, Dell made targeted purchases to grow its product line and service capabilities. In 2008 the company acquired MessageOne, a provider of managed email management and archiving services, for $155 million in cash. MessageOne, which was founded by Michael Dell’s brother, Adam, was integrated into Dell’s global service organization. Michael Dell owns about 12% of the company.
Continue To History Family Tree Loading… 2. The market structure in which the firm operates j. Dell operates in a Monopolistic competition market structure k. the company has many competitors but only 3 top competitiors. l. They have control in setting their own prices m. They also have a differentiated product from their competitiors; Acer, Hewlett-Packard and Lenovo n. Dell places considerable emphasis on their built to order strategy. Generating more than half of its sales from desktop and notebook PCs, Dell faces intense competition in the consolidating market it shares with Acer, Hewlett-Packard, and Lenovo.
The company’s PC sales are following an industry trend that favors mobile computers; Dell’s notebook line, its largest revenue generator, accounts for almost a third of its sales. 3. The sales and profits of the firm both currently and historically o. Dells profit margins were severly pressed in the fiscal year 2010 as the global recession forced down sales of computers and consumer electronics. p. The company’s sales were off by about 13% from the year before, while profits tanked by around 42% Dell saw weaker demand from both commercial and consumer customers during the year.
Its financial services line of business was negatively affected by loan delinquencies and defaults. The recession was challenging enough, yet competitors were continually coming after Dell’s market share. With its extensive line of netbook computers, Acer is dueling with Dell for second place in the worldwide PC market. 4. The number of employees q. Dell Inc. operates with 96,000 employees worldwide. 5. The seasonality of the sales and the problems it creates r. Dell saw weaker demand from both commercial and consumer customers during the year due to the recession. . Its financial services line of business was negatively affected by loan delinquencies and defaults. t. The recession was challenging enough, yet competitiors were continually coming after Dell’s market share u. With its extensive line of netbook computers, Acer is dueling with Dell for second place in the worldwide PC market. 6. The unique characteristics of supply v. It carries no inventory on hand and makes your personal computer only when you order it and to your specifics. 7. Where u estimate the Herfindahl-Hirschman index to be? 8.
Strategies for which the company has employed. w. Dell places great emphasis on its built-to-order strategy as it allows for lower inventories, lower costs and higher profit margins x. Those elements have served them well through the PC pricing wars and IT spending recessions. y. Dells main strategy is to eliminate the middleman and sell for less Michael Dell pioneered the direct-sales model for computers and took the company from his dorm room to the top of the PC heap by keeping it focused on a simple formula: Eliminate the middleman and sell for less.
Dell’s built-to-order boxes allow for lower inventories, lower costs, and higher profit margins — elements that have served it well through PC price wars and IT spending recessions. Though direct sales remain the core of Dell’s business, a broader strategy has emerged since the company’s founding father returned to the helm in 2007. 9. That the elasticity of demand is theorized to be? 10. What variables are most significant in determining demand? 11. Is the company in a cost cutting or expansionary mode? z. The company operates in a cost cutting mode . Dell continue to control costs as part of its efforts to remain competitive 12. Who are the major competitors? |. Acer }. IBM ~. Hewlett-Packard 13. Wall Street’s ratings of the company . DELL ranks: i. #38 amongst the fortune 500 companies ii. 500 amongst the S&P companies iii. #257 in the FT Global 500 14. What is the teams’ evaluation of the prospects for the company? WORKS CITED Dell Inc. (1 April). Hoover’s Company Records,13193. Retrieved April 18, 2010, from Hoover’s Company Records. (Document ID: 168164761).
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