Dell Computer Corporation was created in 1984 by Michael Dell, from Austin University in Texas, with an investment of $1000 and the will to suppress intermediaries in the computer industry. In 1985, the company Dell launched its first computer, the Turbo, featuring the Intel 8088 processor. In 1987, Dell was characterized by a new system of distribution: the firm provided on-site products and services.
The company began its international expansion at an early stage. A subsidiary was opened in the United Kingdom in 1988. To face a new long-term strategy, Dell began to offer stocks by providing 3.5 million shares at $8.5 each. In 1990, the firm opened a new manufacturing centre in Limerick (Ireland) to enter the European, Middle Eastern and African markets. The following year, Dell introduced its first notebook computer.
In 1993, Dell was already among the top-five international computer system makers. The international expansion continued with new subsidiaries in Australia and Japan. The firm also established its manufacturing centre in Malaysia, Asia. At the same time, the per-share value of common stock reached $100. Dell began to sell computers via Internet through its site www.dell.com. That was the kind of revolution Dell brought to the industry and soon achieved tremendous success. The Company also entered the servers' market.
In 1997, Dell sold its 10-millionth computer system, and the per-share value of common stock reached $1000. The firm opened its production and customer service centre in China and expanded its manufacturing facilities in America and Europe. There was another manufacturing centre in the U.S., located in Nashville, and facilities in Brazil to serve the Latin America market. Diversification carried on with the launch of online technical support: "E-Support Direct from Dell".
[...] The activity of Dell is characterized by several differences with its competitors: - The firm adopted the “build by order” principle. It means that commands lead the production cycle and the system of distribution. That is why the production is flexible, and sales can be made directly. Therefore, Dell maintains low stock and distribution costs. This system of production is useful to follow the evolution of demand efficiently. - Another characteristic of Dell Computer is selling a large part of its products via Internet of the activity is done through the web. [...]
[...] Internet sales leadership More than $18 million units are sold per day 30% of the overall revenue Last year, it saw 25 million visits to its website $5M worth of products everyday High customer Service Reliability and Service Dell uses knowledge gained from direct customer contact before and after sale to provide award-winning reliability and tailored customer services. For instance, Dell announced in April 2003 that the Precision Response Corporation a leading provider of outsourced customer care services, has standardized on the Dell(tm) server and storage platforms to power its business solutions and improve its return-on-investment (ROI) in the data centre. [...]
[...] ( Critical success factors: - To master the advanced technologies used in these services - To deliver an effective and complete range of solutions - To answer to the specific attempts of each firm ( Opportunities and Threats: Opportunities - to reinforce its image among firms Threats - competition is still strong between firms ( Competition: In this market, competition is still very tough: few firms are able to deliver such effective services, because of their complexity, the technologies used and the knowledge required. [...]
[...] Today, the part of services in the activity of Dell is only 8%. But its growth is faster than the other Dell activities. According to Michael Dell, the part of services should reach 20 or 25% of the activities of Dell in the next few years. Services provided by Dell Computers are, for example, to offer solutions to systems of production, on-line training to small and medium sized companies, and advice for financing. We can define six strategic business units (SBU) which are six kinds of products sold by Dell: Computers Servers & storage Software & peripherals (except printers & scanners) Printers Personal Digital Assistants (PDA) Services & training II. [...]
[...] PRICE WAR Palm considers Dell as a great competitor which has the ability to sell cheap products, that's why before the launching of the first PDA from Dell (Axim Palm decided to bring down its price in average). These prices would enable the firm to reach a larger part of customers. This strategy of price war is financially risky for the both the firms It will be also interesting to see the reaction of other manufacturers. KEY SUCCES FACTORS -Quality/Price ratio -To be in the Chinese market (PDAs are known to have the fastest growth in this country) -Product high performing devices -Large distribution network -To be innovative and to take risks -To sell products targeting the whole consumer market. [...]
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