Dell Computers Direct to the Top
Of all the companies in the computer sales arena, few are as storiedas Dell Computers. In just twenty years, the founding of Dell has becomethe stuff of IT industry legend. Started by university freshman, MichaelDell, in 1984, the Texas company is now one of the largest sellers of PCsand hardware in the world, with more than 40,000 employees. This successis based on a "direct-to-consumer" model that skeptics claimed could neverwork in the computer sales industry. The direct model of computer retailing involves selling Dell products(primarily PCs, but increasingly other products as well) directly to theend consumer. This consumer targeting has led to an extremely efficientorganization with near record growth since its founding. Frequently compared to another customer-oriented retail giant, Wal-Mart, Dell Computers has claimed such a large market share of PC sales byreducing costs through the supply chain and passing on savings directly tothe customer. Their direct model also allows consumers to customize theproduct they order to suit their particular needs. "While other companieshad to guess which products their customers wanted, because they built them
Responding in typical Dell bravado, thecompany decided to aggressively pursue other markets, such as servers andstorage, as well as printers. Dell's ability to adjust rapidly to market trends led to itsfledgling mobile phone division that it formed in 2000. The first Dell notebook (now a significant portion ofDell revenues) was launched in 1991. Probably the first, significant decision Dell Computers made was toadopt the direct-to-consumer business model. On the customer side of the equation, Dell has created "PremierPages" for its customers, that allow important clients to have a web-basedinterface with the company. This complete integration of business from thesupply end through to the end consumer reflects the primary role of ITinfrastructure to the company. Although Dell had previously shunned the Personal Data Assistant(PDA) market, a 2002 Dell PDA launch helped push sales in its PCperipherals. In 2003, Dell decided to expand into the consumerelectronics market, with offerings such as flat-panel televisions andportable digital music players. This target market has grown to include individual users and the productsoffered now include printers, storage, PC peripherals such as projectorsand PDAs, and a recently-launched consumer electronic branch. In 1993, current Dell President,Kevin Rollins, was hired from a contracted consulting firm.
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