msc460-case1 - MSC 460 Dell Case 1. When Michael Dell was...

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MSC 460 Dell Case 1. When Michael Dell was in college he started buying RAM chips and disk drives from IBM’s excess supplies. He would buy it at a really cheap price and resell at 10-15% below regular retail price. That is when he decided to drop out of college and start the company, which at first had the name of “PC Limited”. He would obtain his PCs by buying retailers’ surplus at cost, then adding the other essentials and selling them at a very low price compared to retail prices. The company was renamed “Dell Computer” in 1987, and in the same year, the first international offices were opened. From then, the company started growing, going from direct selling, to distributing to major retailers, and back to direct selling only in 1994. Due to higher costs and low profit margins in selling to individuals, Dell did not pursue the consumer market till 1996-97 when sales to individuals at the company’s internet site took off. By late 1997, Dell had become a low-cost leader with its efficiency of direct selling and build-to-order model. The company was a
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This note was uploaded on 04/16/2008 for the course MSC 460 taught by Professor Cavusgil during the Spring '08 term at Michigan State University.

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msc460-case1 - MSC 460 Dell Case 1. When Michael Dell was...

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