Dell Computer Corporation

The Basic Dell Computer Story

This is a great American success story. In the third quarter of 2002 Dell reclaimed the position as the No. 1 PC manufacturer as a leading supplier of PCs to corporate customers, government agencies and educational institutions. This was accomplished despite the merger of Compaq with Hewlett-Packard. This growth to the first position in the industry had a very humble beginning. It all began when Michael Dell started selling computers from his dormintory room while he was a studeant at the University of Texas. When he started grossing $30,000 a month he concluded that he was onto a business opportunity that was too good to pass up. He quit school and founded Dell Computer in 1984. In the following thirteen years the company grew to $12 billion in annual revenue.

Dell was a pioneer and has become the leader of the customer-direct, build-to-order computer systems business. Its financial success stems from developing and implementing strategies designed to maximize the strengths of the direct business model. This business model provides the following competitive advantages.

1. It bypasses computer dealers and avoids related price markups.
2. It enables Dell to build each system to a specific customer order, which eliminates inventories of finished goods to resellers and enables it to move faster to new technologies and lower-cost components.
3. It provides direct contact with thousands of customers every day to tailor support offerings to fit customer target markets and to control the consistency of customer service around the world.
4. Leveraging its relationships with key technology partners enables Dell to rapidly incorporate the most relevant new technologies into its products.
5. The low inventory and low fixed-asset model results in one of the highest returns on invested capital in the computer industry.

Dell has become the leader in the PC industry segment. For the revenue that it is producing, it is surprising that it has only 16,000 worldwide employees. Because it is so highly integrated, information systems play a critical role in the operation and management of the company.

Dell Computer and the PC Segment of the Computer Industry

• Dell Computer Corp. Web page
  
• Dell Company Background
  
• Dell's Annual Report
  
• Michael Dell - The Eliminator
  
• Michael Dell - Why We Like Him
  
• New Worlds to Conquer
  
• Dell Branches Out
  
• Dell Gaining Market Share
  
• Harvard Business Review, March-April 1998, pp. 73-84.
  Note: This is a must read article if you are doing a paper on Dell Computer (available from instructor).
• Dell Direct Model
  
• Hewlett-Packard web page
  
• Gateway web page
  
• IBM PC web page
  
• Apple web page
  
• Dell Wants $60B In Revenue By 2006
  
• The Big Picture: Dell's Global Development Strategy
  
• PC Sales Stay Strong
  
• Dell Does TV

• Dell Hires Randy Mott
  
• Business-Technologist Visions: What's Your Legacy?
  
• Dell Computer's CIO Jerry Gregoire: Named Austin IT Executive of the Year
  
• Information Technology: Eating Their Own Dog Food
  
• The Customer Experience
  
• Global Thinker: As CIO of Dell and the Former CIO of Retail Giant Wal-Mart, Randy Mott is Arguably the World's Most Revered IT Professional
  
• The State of the CIO: The Traveling Man
  
• Refining and Extending the Direct Business Model with Information Technology
  

Key People at Dell Computer

• Michael Dell, Chairman of the Board (founder)
  
• Kevin B. Rollins, CEO
  
• Randy Mott, Vice President and Chief Information Officer (former CIO at Wal-Mart)
  
• Jerry Gregoire, former CIO
  

Tips on Doing a Paper on Dell Computer

• Recognize from the start that there is a great deal of information availabe on Dell. The Internet web pages are loaded with articles about this leading PC company.
• Dell has traditionally been in the PC segment of the Computer Industry. Be sure to relate Dell's emphasis on PCs and other desktop devices with the other processor segments of the Compute Industry: super computers, mainframes and midrange computers. Then indicate that the paper will focus primarily on the PC segment and from that point in the paper it will be simply called the PC Industry.
• The obvious theme of the paper is Dell's customer direct business model and the importance of information systems to implement such a strategy.

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