Dell Inc Business PlanIntroductionDell Inc. (formerly PC’s Limited) has grown from a $1000 startup in 1984, to a $61 billion global conglomerate 1. Currently Dell Inc. holds third position globally in PC sales, and it has consistently been among the top three PC companies in the world for more than 15 years 2. As of end of 2011, it employed 103,300 employees worldwide. However, given the rapid growth in the semiconductor industry and new players entering the PC industry, the last 28 years have been particularly challenging for the company, forcing it to evolve continuously, and outperform the competition. The success of the company is largely dependent on two other disruptions – the disruption in the computer industry, and that in the internet technology.
Dell is an innovative company with a unique technology-based business plan. With a focus on building PC-grade products and integrating their technology into higher-margin business offerings, the company’s products are tailored to the needs of their customers around the world. This includes the first generation of Intel® Core™ processors, advanced processing speeds and the latest 4K display technology. For instance, by leveraging the largest portfolio of Dell PCs, the company can deliver better, more efficient services to its customers. The ability of customers, who spend hours and funds a single time on the Dell PC plan, to get the next fastest gaming, music, and web browsing experience with the right products, is unique; not only can the product meet their most demanding needs, but it also brings them on board with their money. Dell’s system management system, which powers more than 45 percent of its customers, includes an Intel® 64-bit processor, including the integrated video memory that allows the system to display all of its high-definition content and support the latest 3D gaming, gaming performance, and 4K resolution. Dell PC, like all Dell PCs, uses Intel® Accelerated Technology, which also provides integrated security and performance for the system. The integrated architecture allows the system to respond at runtime, in a highly customized fashion which allows it to respond at any time to any user’s input. Dell’s system management system delivers the greatest support for data centers, data centers supporting the latest computing technologies and operating systems, with a robust and dedicated backup. For instance, users can securely store new data on any Dell PC where system backup capability is present. Dell’s management system is compatible with the USB Type-C port of all new PCs. By providing the most current and accurate technology at the lowest cost and for the most reliable time, data centers are safer, less expensive, and better suited to meet the needs of an increasingly sophisticated PC user, with a lower latency and superior system performance. The management system also offers a standard suite of controls that can be easily transferred between computers, including a Quick Start Guide (S-S) mode, that simplifies the management of various components in a Windows user agent, and the Dell S-S Software Manager, which is a set of customizable operating system tools designed to help the program run smoothly and efficiently. Dell supports the latest video (1920 x 1080) and video (2480 x 480) video streaming technology with AMD Radeon™ graphics cards and Intel® Core™ II® chips. Dell provides integrated support for Dell PC, including power. Dell utilizes the AMD Radeon™ graphics processors on all Dell PC’s, which provide high-quality video performance, stability, and protection. The Dell PC suite includes Dell’s advanced and industry leading support system for a number of important Dell products. Dell provides Dell computers, including its PC system products, for Dell customers, including Dell Smart Home, Dell Server, Dell Pro with an integrated smart home system, Dell Cinema. Dell also offers Dell products, including Dell Pro with an integrated smart home system,
The current study focuses on the challenges faced by the company between 1997 and 2004, when Dell was faced increased competition in the industry driving down its prices, increasing cost base, and the dot com bubble burst. It throws some light on how the industry structure evolved during this period, and how Dell strategically adapted it to leverage its strengths.
HistoryMichael Dell, a pre-med at the age of 19, founded PC’s limited in his dorm room in University of Texas at Austin. He assembled PCs from components and sold it to his fellow students. He got success early on, not only because of the computers he sold but also because of this business style. PC’s limited took orders over phone and deliver it to the customer’s doorstep, eliminating all the retailers and the middlemen. The word of mouth spread fast, and Dell, although did not finish this medical school, joined the club of tech entrepreneurs of his generation, that included Steve Jobs, and Bill Gates.
This innovative business model disrupted the PC industry in 1984, when most of the PC sales occurred through local retail shops and personal selling by representatives. Later, Dell continued to build on this model to provide ever increasing value to its customers. Providing multiple customization options to the end user helped Dell leapfrog in the evolving PC maker industry. Later Dell leveraged the power of internet to improve the efficiencies of its “direct selling” and “customization” business models.
Today Dell has the one of the most efficient Supply Chain organizations globally which has helped it pursue a low-cost leadership position in the industry. It has arguably the most innovative procurement, production and distribution network ever built 4.
Industry AnalysisThe evolving PC industry (1997-2004)By mid 1990s, players like Commodore and Atari (and many more) had exited the PC market mainly because of increasing clout of IBM PC clones and downward pressure on prices thereby reducing profitability. Those who were left had