SM - CASE STUDY (DELL).docx - Case Study \u201cYou have come a long way baby\u201d In 1984 18 year old Michael Dell a student of the University of Texas

SM - CASE STUDY (DELL).docx - Case Study u201cYou have...

This preview shows page 1 - 3 out of 7 pages.

Case Study “You have come a long way baby” In 1984, 18 year old Michael Dell, a student of the University of Texas, Austin, set up PCs Limited, a part time business in his dorm room to sell IBM compatible computers built from stock components. Dell started formatting hard discs for personal computers, added additional memory, disc drives and modems with IBM clones and sold them at 40% cheaper than that of the IBM machines. In 1985, the company moved up the value chain and started to assemble Dell branded PCs (“Turbo PC”) instead of upgrading the machines of other manufacturers. Within one year of its operation, the company posted revenue of US $ 6 mn. Inspired by the success of the company, Michael Dell dropped out of college in 1986, to run the business full time. During this time, he renamed the company Dell Computer Corporation. Dell presumed that customization, fast delivery and low price would give his company a higher profit margin over IBM and HP. Contrary to existing trends of displaying the products in retail outlets or selling them through middlemen, the company delivered its products directly to the consumers. Dell sourced the components directly from the manufacturers, assembled them according to customer specifications and delivered them free of cost. Initially, it took orders over telephone, followed by advertisements in magazines and dailies and later from its e-commerce platform . In 1989, the company issued its first IPO. In 1992, Fortune 500 included Dell Computers in the league of the world’s best 500 companies and Michael Dell featured as the youngest CEO. The company forayed into the U.K, followed by Australia and Japan in 1993. It set up its own manufacturing facilities in Limerick, Ireland to serve European, Middle-east and African markets., Penang, Malaysia, Xiamen, China, Eldorado, do Sul, Brazil and Texas and Tennessee, US. In 1999, Dell Computers overtook Compaq and became the largest PC seller in the US. Along with setting up manufacturing facilities in different markets, the company tried to improve its products according to industry trends and consumer preferences. In 1989, it launched the notebook computer, followed by the network server (1996), workstation systems (1997), network switches (2001) and projectors and printers (2002). In 2003, the company extended its product portfolio to the consumer electronics market by launching flat panel TVs, Dell digital Jukebox, USB key drives and Windows mobile powered PDAs. In the same year, in recognition of its efforts at product extension, the company’s name was changed to ‘Dell Inc.’ The company marketed its products under different brand names to different consumer segments. While OptiPlex, Latitude and Precision were targeted at medium size and large consumers, students and small offices were identified as the target audience for Dimension, Insprion and the XPS Brand.
Image of page 1
In January 2004, Dell entered into a technology partnership with Fuji, Xerox, Kodak and Samsung, followed by a strategic partnership with Microsoft and Oracle Inc. It
Image of page 2
Image of page 3

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture