Dell, Inc.
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Dell, Inc. Template:Nasdaq is a computer-hardware manufacturer based in Round Rock, Texas. The marketplace perhaps associates Dell Computer most with the personal computers it designs, manufactures and sells for home and office use, but Dell also operates in the enterprise computing market with servers, data storage devices, network switches and computer cluster lines. Personal digital assistants, software and peripherals (including printers) round out Dell's product offerings.
As of 2005 Dell, Inc. had become one of the world's most visible companies. In February of 2005, Dell appeared in first place in a ranking of the "Most Admired Companies" published by Fortune Magazine.
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History
Michael Dell had his first encounter with a computer at the age of 15, when he broke down a brand new Apple computer and rebuilt it, just to see if he could. When he enrolled at the University of Texas at Austin, he intended to become a physician. However, during his freshman year, he dropped out of college to become a full-time entrepreneur. He founded a company (under the name "PCs Limited") while still at the University of Texas at Austin in 1984. The company became successful, so Dell, at the age of nineteen, started trading full-time.
Dell came up with an idea to build and sell computers, and, without knowing it, pioneered a new way of doing business. In 1985, Dell's company produced the first computer of its own design (the Dell Turbo), which contained a fast Intel 8088 processor running at a speed of 8 megahertz. Early on, Dell had a vision to focus on making quality products but also felt driven by a vision of revolutionizing the way of conducting commerce. Instead of focusing intently on a product, Dell shifted his focus from medicine to the customer. His direct-to-consumer approach quickly bore fruit and success ensued as he grossed more than $6 million in his first year of trading.
Dell had always demonstrated success in direct-to-consumer marketing — purposefully eliminating third-party retail chains. Because of this, he could pass savings to his customers.
In 1987, PCs Limited became the "Dell Computer Corporation". In the same year it set up its first on-site-service programs. Because Michael Dell did not have a store, he lacked a location for people to bring their computers in for service, so he required people to go directly to the people for repairs. In 1991 Dell Computers tried selling their products indirectly through warehouse clubs and computer superstores. The attempt failed miserably but Dell, a quick learner, realised his limitations in wholesaling: “I’ve simply learned from experience that a company can grow too fast. You have to be careful about expanding in business because if you get into too many too quickly, you won’t have the expertise and the infrastructure to succeed,” Dell said to Success magazine in 1999.
In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies.
In 1993, Michael Dell re-invented his business model, conceptually segmenting his perceived potential markets into several distinct parts, which he labelled: home-office, small business, education, government and large business/healthcare.
In 1999 Dell overtook Compaq to become the largest seller of personal computers in the United States of America. In 2002, Dell lost this position to Hewlett-Packard, which acquired Compaq in 2002. In 2003, Dell again regained the lead.
More recently, Dell has attempted to expand by tapping into the multimedia and home entertainment markets with the introduction of Dell TVs, Dell Handhelds and Dell Digital Jukeboxes. Dell has also recently gone into printing, providing both home and small-office printers (though retailers do not stock Dell printer cartridges: end-users must order them from Dell Inc.).
To recognize the company's expansion beyond computers, the stockholders approved changing the company name to "Dell, Inc." at the annual company meeting in 2003.
Dell has rolled out its direct sales model in all the major international markets, and has achieved rapid growth in market share in most of them. In 2004, the share of sales coming from international markets increased, as revealed in the company's press releases for the first two quarters of its Fiscal 2005 year.
Dell International Services functions as a support division of Dell.
In 2004, Kevin B. Rollins became Dell's chief executive officer. On December 22, 2004, the company announced that it would build a new assembly plant near Winston-Salem, North Carolina; the city and county provided Dell with $37.2 million in incentive packages; the state provided approximately $250 million in incentives and tax breaks. [1] (http://www.journalnow.com/servlet/Satellite?pagename=WSJ%2FMGArticle%2FWSJ_BasicArticle&c=MGArticle&cid=1031779834649)
Criticism
Dell Inc. has sometimes received criticism for the large amount of software included on its systems: some users regard a great deal of it as spyware. Some customers accuse the company of making computers with cheap and unreliable parts.
Consumer groups have also criticized Dell Inc. for treating consumers unfairly. For example, they have accused its customer service of helping businesses faster than individual customers. Customer service critics target Dell Inc.'s outsourcing practices, specifically involving India, claiming they contribute to communication problems between the company and its customers. Dell Inc. has also had numerous criticisms from the Internet community for not offering AMD-based systems, having faulty hardware (most common complaints relate to hard-drive failures, with repeated occurrences even after sending the computer/hard drive in for repair), failing to facilitate upgrading hardware (almost all non-Dell-certified/branded hardware), and the generic monopoly complaints from the Internet/Build Your Own communities. Dell also uses proprietary parts, resulting in certain components like the power-supply and motherboard not fitting or not working at all, and sometimes frying the system if users install different, non-proprietary parts. Dell quality can also suffer due to those (sometimes inferior) parts, as well as due to assembly-line deficiencies. Workers have less than 5 seconds generally to insert a PCI card in its slot, and to screw it in. In 2005, two class action lawsuits accused Dell of marketing with Bait and switch tactics, and conspiring with its financial unit to offer zero percent financing, only to revoke the offer after the return period had expired.
Products and services
Brands
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Dell markets its products under many model names, such as:
- OptiPlex - office desktop systems
- Dimension - consumer desktop systems
- Latitude - commercially-focussed laptops
- Inspiron - consumer laptops
- Precision - high-perfomance office desktop systems and laptops
- PowerEdge - larger corporate servers
- PowerVault - storage-oriented hardware: tape arrays and disk arrays
- XPS - gaming gear
- Axim - Pocket PCs
The corporation markets certain brand names to different consumer segments. It typically sells the OptiPlex, Latitude, and Precision names to mid and large business customers, where the company's advertising emphasizes long life-cycles, reliability and serviceability. The Dimension, Inspiron, and XPS brands have an orientation towards consumers, students, and small home office environments, emphasizing value, performance and expandability.
Dell recently re-introduced the Dell XPS brand to target the lucrative gaming market. Dell XPS desktop systems use silver rather than the black cases found on newer Dell PCs.
Software and operating systems
Dell currently ships Windows XP as the operating system for most of its new computers, but it also offers Red Hat and SUSE for servers. Certain computers get sold "bare-bones" with a FreeDOS disk included in the box. On Dell's Windows machines, the manufacturer bundles a large amount of software. Some have accused Dell of shipping spyware and claim that its technical support team have instructions not to support its de-installation.
Non-computer products
Dell has expanded into non-computer products, including the Dell Digital Jukebox ("Dell DJ") (a portable digital audio player), USB keydrives, LCD televisions, Pocket PCs, and printers.
Support
Dell outsources much of its technical support work to the Indian company Infosys, which also handles outsourced work from other multinationals.
Corporate activity
Financial information
Dell incorporated as a Texas corporation in 1984 with a capitalization of US$ 1000, the minimum allowed by Texas law. Dell stock trades on the Nasdaq stock exchange in New York under the symbol DELL. As of 31 December 2004 the company had a market capitalisation of $104.69 billion.
In its fiscal year ended 28 January 2005 Dell made a net profit of $3.32 billion on revenue of $49.2 billion. These figures represent 26% and 19% growth respectively over the previous fiscal year.
Direct Sales
Dell sells all its products, both to the consumer and to corporate customers, using a direct sales model. Dell neither operates retail stores nor sells products through other retailers or resellers. Dell Inc. does, however, showcase its consumer-oriented products at kiosks in major malls. The sales staff at the kiosk may assist customers in ordering a product for shipment to their home.
The Dell direct business model, which eliminates the middleman, has a reputation for its speed of sale-to-delivery of the company's products. Dell builds computers to order and this keeps its inventory costs low. Customers pay for product items before Dell builds those items: this gives Dell a negative cash conversion cycle.
Advertising
Dell advertises heavily on television, on the Internet, in magazines and in newspapers, using constant "special offers" to encourage sales.
A popular, widely parodied television and print ad campaign in the USA in the early 2000s featured young actor Ben Curtis playing the part of "Steven" - a cocky, and lightly mischievous blond-haired kid, who comes to the assistance of bereft computer purchasers. Each television advertisement usually ended with Steven's telltale phrase: "Dude, you're gettin' a DELL!"
During the past few years, Dell commercials have featured three "Dell interns" who learn about the company and show off Dell products, services and employees.
Diversity
Dell received a 100% rating in the third (2004) Corporate Equality Index released by the Human Rights Campaign group to evaluate gender-preference practices of commercial bodies in the United States of America.
External links
- Dell Computer (http://www.dell.com/)
- Dell Canada (http://www.dell.ca/)
- Dell UK (http://www.dell.co.uk/)
- IMNO Interviews Kevin Rollins, CEO of Dell (http://www.imno.org/articles.asp?qid=125&sid=18)
- Dell Business Process Improvement (http://www.sixsigmacompanies.com/blog/2005/02/dell_inc.html)- Information on the use of Six Sigma in Dell's BPI Program
Data
- Yahoo! - Dell Inc. Company Profile (http://biz.yahoo.com/ic/13/13193.html)
- Dell Inc appears on Yellowikis (http://www.yellowikis.org/wiki/index.php/Dell).bg:Dell
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