As a result, his incept helped to give customers powerful and richly-configured system at competitive prices. HIS concept enables Dell to move quickly Into the market compared to companies which have slow-moving and Indirect distribution channels. Company History At one time Dell Inc. Had 15% of the global market selling desktop personal computers, notebook computers, network servers, workstations, handheld computers, monitors, printers, high-end storage products and a variety of computers peripherals and software. It also moved into consumer electronic arena offering LCD televisions and projectors.
It had six production facilities worldwide. The locations were in Austin, Texas; Nashville, Tennessee; Loaded do Soul, Brazil; Limerick, Ireland; Penman, Malaysia and Examine, China. Dell Inc is headquartered in Round Rock, Texas as shown in below figure:- [pick] Figure 2: Dell Inc is headquartered in Round Rock, Texas In early history, Michael Dell started assembling and selling computers in form of IBM computers clones by mail order to customers at University of Texas, Austin. His computers were cheaper and soon he was grossing $80,000 a month. He dropped out of school and started Dell Computer Corporation.
He introduced his direct selling concept by placing advertisements in computer magazines and setting up a sell free number for customers to dial direct to them. His concept made Dell the top brand name in direct-mail market with an initial sale of 6 million in the first year and by the following year it reached $40 million by 1984. Dell held a dominant position in the mail-order market and he hired a group of marketing executives from Dandy Corporation. Not only undercut the prices of their competitors but they set prices in relation to the firm cost.
The Dandy team and Michael Dell ran into trouble with Dell arguing that he team does not understand his concept of direct-selling. The Dandy team retaliated by accusing Dell of being very impatient to wait for the sales force to pay off. Soon the Dandy team resigned or was forced out. Despite this the company reported sales of $159 million in 1987 and it went public in June 1988 selling 3. 5 million shares at $8. 50 per share. In the late sass’s, Dell began facing several challenges. Firstly, the announcement of their clone of Vim’s new AS/2 computer system well before it was ready.
It also faced competition from several Japanese Companies which were offering IBM clones at lower prices. The company also faced trouble meeting the demand and also cash flow troubles. During the fourth quarter of 1988 it had no cash and warehouse full of unsold computers. Dell responded to those competitions by increasing the level of technical sophistication using the Intel Corporation 80386 microprocessor, the most powerful chip at that time. They also produced file servers using the sophisticated unit operating system. Dell hired Vim’s Glenn Henry to work on product development.
Henry developed new plans to produce clones and he built the development staff from nothing to 150 engineers. When Intel released its 486 microprocessors, Dell Egan to develop computers using these microprocessors. By mid-1989 Dell had finished initial attempts at graphics hardware, giving way into higher end of the PC market. Dells share of the PC market was only 1. 8% but still growing rapidly. US sales for 1989 reached $257. 8 million while sales in Britain increased to $40 million. In the sass’s, Dell set up subsidiaries in Italy and France and also a manufacturing centre in Limerick, Ireland.
The firm also developed powerful servers using UNIX operating system with Anderson Consulting. As a result, 40% of Dell’s $546 million in 1990 sales came from the corporate world up 15% from 1987. Dell became the sixth largest PC makers in the US up from number 22 in 1989. It retained its staff of 2100 and it was rated number one in customer’s satisfaction in J. D Powers Associates in its first survey. During this time the price war among companies was obvious. With profit slumping, Compact, IBM and Apple were forced to lay off employees.
Compact took Dell to court for its defamatory advertisement and it won. Although it was the time of recession, people still needed computers and their choice of Dell because it is inexpensive but technologically innovated PC’s. Its annual scale shot up to $1 billion. Dell produced its first notebook sized computer in 1991 using Intel’s fast 486 microprocessors. As the PC wars continued with Compact, Dell had to reduce the price of its PC to match that of Compact. Dell also ventured into other products like fax machines and compact discs.
Due to technological difficulties in 1993, Dell was forced to cancel a series of 3. 5 share of the PC market in 1993 but Digital Equipment Corporation with its minicomputers topped Dell to overcome this setback. Dell introduced its Dimensions by Dell line of low cost PC’s. Sales reached $2 billion and Dell made a second, $148 million stock offering. Dell also ventured into retailing with Compass and Staples, a discount office supply chain. Their choice into retailing brought about a drop in the prices of their computers and they abandoned the retail market in late 1993.
Dell was hurt by an industry wide consolidation taking place in early sass. Dell moved aggressively into markets outside the United States including Latin America, Australia and Japan. Xerox began to sell Dell computers in 1992. After a loss of $36 million, Dell rebounded in 1995 with a profit of $40 million. It introduced Pentium based notebook computers and a popular dual processor PC. It grows by 50% to be the top five computer sellers in the world. It expended and opens a manufacturing facility in Penman, Malaysia in 1996. It started $30 million a day over the internet.
Dell achieved desirable efficiencies using the internet and it also provided technical support that allowed consumers to tackle their orders from manufacturing delivery. It continued to grow in 1997 and 1998 with profits reaching $944 million. It introduced new products including a line of workstations, a rental program for individual consumers and a line of storage products under the Power Vault brand. In 998, it established a production and customer centre in Examine, China. By 1997, it was a close fourth behind MM, Hewlett Packard and Compact in the computer industry.
In 1998, it captured 9% of the market and was in second place. In 1999, it opened an online superstore of computers related products called Gigabits. Com. It continued its online sales with www. Dell. Com. In 1999, two more facilities were added in Nashville, Tennessee and Loaded do Soul, Brazil. In January 2000, Dell reported net income of $1. 86 billion on total revenue of $25. 26 million. In early sass’s, Dell survive the slumps of 2000 by initiating a price war which its imputation were slow to respond to. As a result for the first time Dell was on top gaining 13% of the market.
By this time Hewlett Packard had acquired Compact to firm a formidable competitor. Dell responded to the slump in PC by pushing into the market internet servers. In 2001, it entered into alliance with EMCEE Corporation to develop a new line of data storage systems. It also launched its Power Connect line of network switches in 2001. Dell was able to stay in the black while its competitors were losing money. In the company’s history for the first time it slashed 5700 Jobs from the payroll in 2001 but still managed a net income of $1. 8 billion on revenues of $31. 7 billion for 2002. Operations at Dell Computer. He was instrumental in bringing Dell through the difficulties times. Rollins assumption of the operating reins enabled Michael Dell to concentrate more on long range strategic planning. In 2007 with $60 billion revenues, Dell Computer continued to diversify furthers. In 2002, it entered the handheld computer market by launching its Axiom line of Personal Digital Assistance (PDA). In 2003, it owned a line of printers, LCD flat panel television, digital music players and an online music service.
It also set up its first Dell tore inside of a Sears, Roebuck & Company outlet on a trail run. It also changed its name to Dell Inc. There was a increase in demand for its product such as servers, notebook computers and storage equipments in 2004. Its income surged 25% to $2. 65 billion while revenue Jumped 17% to $41. 44 billion. In 2004, Michael Dell gave up his post as CEO to Rollins but was still active in the company as its chairman. Rollins role as CEO only lasted till 2007 and with his departure Michael Dell was back as CEO until now.
In 2013, he announced a leveraged buyout scheme which would take the company private again. This would enable the company to restructure without the burdens of higher taxes and stockholders expectation. Milestones of Dell Inc. ; Michael Dell founds Dell Computer Corporation. 1984. ; The Company goes public with 3. 5 million shares of company stock. 1988. : Dell introduces its first notebook PC. 1991 ; Dell establishes subsidiaries in Australia and Japan. 1993. 1996: The Company begins selling over the Internet. . Dell introduces a line of workstations. 99TH ; The Company gains the leading share of the global PC market. 2001. 2004: Michael Dell announces he will step down as CEO but remain chairman. 006: Losses ranking as 1st PC manufacturer in world to Hewlett Packard. 2007: Ken Rollins steps down as CEO and Michael Dell resumes the role as CEO. 2011: Dell falls to 3rd ranking behind Leno and Hewlett Packard as the world’s largest manufacturer of PC’s. 2013: Dell announces a leveraged buyout by Silver Lake Partners which partially funded by Microsoft. The translation must still be approved by shareholders.
Dell Inc. Products From 1984 when Dell Inc. Was founded till today, Dell Inc. Have been successfully produced various products based computerize technologies such as listed below:- ; Computers ; Mobile Devices Servers ; Storage Products ; Electronics, Software and Accessories ; HDTV and Home Theater ; Support & Services These types of products are the next major market in the electronics industry because the computerize technologies are becoming a demand in the market. Question 2 Describe the organization structure of the company.
The hierarchical functional structure defines various function provided by Dell Inc. Including business development, education and global refer to government relationship while the decentralized structure has more learning availability for all embers of the company as decisions come from various levels. Based on the Dell Inc. Organizational structure in Figure 3, can be seen that the Dell Inc. Establish working relationship between levels of roles where Dell Inc. Demonstrate a layered organization which consists of technical, management and community levels. Tauter of tasks it performs. Within Dell Inc. Technical level includes the physical production of goods such as computerized technologies. Computerized technologies products are the major market in the electronics industry because the smart appliances are becoming a demand in the market. Consumers want their everyday appliances to be Internet-ready. Mid-Level or Administrative Level makes decision related to the resources necessary for performance of the technical function and the beneficiaries of the products or service provided.
Administrative level also concerned with activities involved in recruiting of professional staff, training and organization development especially the system of technology planning, finance and quality control. CEO and Vice Presidents are in Institutional Level. Institutional Level is concerned with wide objectives and the work of Dell Inc. As a whole. Decision at this level are unconcerned with the selection of operations, the development of the organization in relation to external agencies and the wider social environment.