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Dell Case Study

I. Introduction. Summarize the current situation facing the company and the relevant issues.

• Dell computer was founded by Michael Dell at age of twenty one in his dorm at the University of Texas, Austin. Initially the name of the company was PCs Ltd in 1984 but later it was changed to Dell Computer in 1987 when company got listed in stock exchange.
• The company started with small operations through PCs by buying retailers surplus stocks at cost, then powering them up with graphics cards, hard disks, and memory before reselling them.
• Dell’s strategy is to build computer so that it can be order by the consumers. It’s build to order strategy has made Dell the most successful company in the information technology field.
• Dell sells its machines and other equipments directly to customers so it has eliminated the middleman.
• Dell has high margin because of direct sale strategy and customers get excellent state of the art machines at low cost compare to Dell’s competitors.
• Michael Dell’s visionary leadership has made Dell the second most successful PC maker in the industry. (IBM is the leader).
• Dell’s ability to adapt to changing circumstances is its great strength.
• One week after the September 11th 2001 attack, Dell reported selling 24,000 servers and desktops.
• Dell has very user friendly web site and half of Dell’s sale, half of tech support and three quarter of order status takes place online.
• The supply chain and data integration with suppliers has made Dell one of the most efficient computer manufacturers.
• The continuous advancement in technology and innovative approach to manufacturing and assembly keeps Dell the low price leader in the PC industry.

The Core Issues at Dell Corp:
1. The Price War is going on between PC Makers.
2. Revenues Down in 2002 compare to 2001 (31.9 to 31.1 billion)
3. Worldwide sales of PC’s Down 11% in 2001, Dell’s Sales Up
4. Leadership at Dell Corporation
5. Service Contracts
6....