Dell Strategy

1. Introduction

Michael S. Dell, who founded the Dell Computer Corporation in 1984 with nothing more than $1,000 and an idea, serves as chairman and chief executive officer of the fastest-growing major computer systems business in the world.

1.1 Company Background

Dell, which was founded in 1984 by Michael Dell, the longest-tenured executive to direct a company in the computer industry, is among the world's leading computer manufacturers that has transformed and diversified into variety of business segments over the years. The company is established on a simple concept: by selling personal and business computer systems directly to customers, Dell could best comprehend their needs and efficiently supply and provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost to its extent or can diminish Dell's understanding of customer anticipations.

The direct selling, which has been planned and since then been stuck to, allows company to response speedily and build every system to order and offer customers powerful, richly-configured systems at competitive prices. Dell also introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, turning over inventory every four days on average.

Developing over 20 years, the company has always been associated with designing, manufacturing and customizing products and services to satisfy a diversified, not only major, specified also, range of customers including individual customers to wholesale and retailing businesses. The company's philosophy to deal with customers one-on-one has become a splendid management model for other companies. Having gained the market leadership position in computer products and services, Dell's team have always been careful but confident of sustaining and strengthening its marketing strategy of providing standard-based computing solutions (Official Website 2004). Today Dell is the largest computer manufacturer in the world.

1.2 Rapid-Grown-Up History

In only 15 years, the company's sales have skyrocketed from $6 million to a colossal $23.6 billion. Dell has opened sales offices in over 34 countries, since its first international addition opened in the United Kingdom in 1987, and boasts over 33 thousand employees in over 170 countries and regions all over the world.

The distinction between human beings and creatures and among human beings them selves is the inventory and the tool. A convenient and handy tool would amazingly produce incredible amount of prolificacy. Dell Computer Corporation became recognized as the top vendors of personal computers worldwide, just with this sharp and hard-to-duplicated tool: original direct-marketing approach and pioneering of the industry's first service and support programs.

Equipped with the direct-marketing approach and pioneering, Dell continued to hold the No. 1 worldwide share position for computer shipments.

The company is now worth billions because Dell decided to bypass the middleman, who adds little value to the products, and sell custom-built PCs directly to end users.

1.3 Current Leadership

Till the third financial quarter of 2005, Dell's global growth continued triumphing in all regions. Revenue in Europe, Middle East and Africa (EMEA) gained 25 percent year-over-year outside the United Kingdom and 19 percent for the entire region. The region had growth across all product categories and a 72 percent year-over-year revenue increase in enhanced services. Mobility product shipments increased 48 percent year-over-year. Germany had revenue growth of 25 percent and France had revenue growth of 26 percent.

Storage revenue was up 44 percent year-over-year in the Americas to lead enterprise growth. Servers and networking revenue increased 16 percent and enhanced services increased 23 percent year-over-year in the region. Growth in sales of servers, storage and mobility products helped to drive an overall revenue increase of 22 percent year-over-year for Americas International. Growth in the Americas was affected by a decline in the U.S. Consumer business.

Globally, the company had a 21 percent increase in server shipments year-over-year. Dell's server offerings were enlarged during the quarter with the addition of multi-core Intel Xeon technology in the single-, dual- and four-socket server and workstation product lines, delivering up to 51 percent greater performance while maintaining a common system image for both single- and multi-core systems.

Revenue for storage products, up 35 percent year-over-year, grew at a rate of more than three times that of the industry. Demand for server and storage products also helped drive revenue growth for Dell's enhanced services of 36 percent year-over-year. Dell continues to make investments in its service operations and expand its offerings to continue improving support for all customers. In a recent survey of IT executives by CIO Magazine, Dell was rated No. 1 among leading vendors for providing "impeccable customer service."

With the increasing flexibility of wireless Internet access, more customers are moving from desktop platforms to wireless notebook computers. Sales of Dell's mobility products in the quarter continued to reflect the shift as shipments increased 38 percent year-over-year. Software and peripherals revenue grew 25 percent year-over-year, driven by imaging and displays. Dell's laser shipments doubled year-over-year, led by growth in color laser printer shipments. Shipments of replacement ink and toner cartridges also nearly doubled year-over-year.

2. Discussion and analysis

2.1 Competitory but orderly surrounding

Information Technology (IT) can be defined as a confluence of individual technology components that are typically organized into computer-based information systems. Information technology has changed the way the world does business. Information Technology is the fastest growing sector in the economy with a 68% increase in output growth rate projected between 2002 and 2012. (U.S. Bureau of Labor Statistics) Employment opportunities are expected to be good in the IT industry as demand for computer-related occupations increases due to fast-pace advances in computer technology, continuing development of new computer applications, and the growing significance of