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Michael Dell founded the mail-order PC company in 184 at the age of 1. The company emerged from an 18-employee basement operation to the leading supplier of computers in the world.
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Dell Computer Corp. thrived by using flexible manufacturing and inventory management techniques to shave costs while providing custom PCs with the speediest delivery in the industry. Dells mission is to be the most successful computer company in the world at delivering the best customer experience in markets they serve. In doing so, Michael Dell is quoted as saying they "will meet customer expectations of Highest quality, Leading technology, Competitive pricing, Individual and company accountability, Best-in-class service and support, Flexible customization capability, Superior corporate citizenship, and Financial stability. Dell has a vision of excellence through quality, innovation, pricing, accountability, service and support, customization, corporate citizenship and financial stability." This mission statement is clear and easy to understand. Producing quality work that leads to the achievement of these lofty goals becomes much more complicated than writing a simple mission statement. One thing is clear, the core capabilities of any business stem from the employees that comprise it. With over 6,000 employees, Dell is a member of the rapidly changing and expanding computer technology industry. This industry had achieved enormous growth in the last decade.
As PC sales slow worldwide, the Round Rock, Texas-based company has embarked on a broad campaign to gain market share by cutting prices, according to analysts. In the past, the company focused on keeping profit margins high, leading to strong profitability, robust revenue growth and relatively high average selling prices on its PCs. Now, with the maturation of the PC market, Dell is undercutting competitors in price to rapidly gain market share. But the short-term cost to Dell could be high reduced profitability. Analysts described Dells gambittrading some profitability for big market share gains to playing the board war game, Risk. By expanding its lead in more markets or in Risk controlling enough countries, Dell hopes to overrun competitors. Dells pursuit of market share puts many competitors in a defensive position, according to analysts. Dell has a way of making life more miserable for people who are already in a bad way. For example, when Compaq, HP or some other company has a big inventory of imminently aging equipment hanging in the wrong place, Dell has a habit of dropping prices and making that inventory even more valueless. Smaller companies will face even greater problems and may have to face the ultimate question of whether to continue to participate in the PC market. Far worse for competitors may be Dells determination to undercut them in price in higher-margin products like servers and storage systems. The aggressive pricing environment in PCs is now spilling over into the enterprise market with Dell pricing its high-density rack servers at sub $1,000 and NAS (network attached storage) products at 6 cents per megabyte, (1) Kumar noted. Whether Dells market share gambit will pay off is uncertain, but many Wall Street analysts like the companys strategy in spite of lowered margins. Dell, known for selling built-to-order computers directly to buyers, is adapting an approach to tap the consumer sector in China, one of the few healthy markets in an otherwise ailing industry. Healthy Chinese computer demand is helping Dell maintain revenue levels as prices fall drastically worldwide. During the quarter ending November , 00, Dell China unit shipments went up by 47 per cent as sales climbed 16 per cent in this strategically important market. The achievements pushed Dells market share to 4. per cent from .1 per cent in the same quarter a year earlier, according to International Data Corporation (IDC) Q 00 report. The aggressive pricing strategy has helped Dell gain market share in China despite the global slump in the PC market. Dell has outperformed IBM as the leading foreign PC vendor in China in terms of unit shipment in the third quarter (Q) and is currently ranked fourth in Chinas top 10 PC vendors based on revenue and unit shipments. Legend, Founder, IBM, Dell, and HP were the top five PC vendors in China in the first half of the year, with Legend having 0.1 per cent of the market. The top five foreign PC vendors in China in terms of unit shipment also include Acer, HP and Compaq. China is one of the few healthy PC markets in the world for Dell, which is expecting strong growth in the home PC as well as servers. Chinas World Trade Organization (WTO) accession is definitely a good opportunity for China as well as Dell. It means a much more open market and will attract a lot of investors to China. That will give everyone, not only Dell, a bigger market to tap into. For Dell, the key segment is still the enterprise business large corporate and medium businesses. After nearly four years of expansion in China, Dell now has liaison offices covering Chinas major cities Beijing, Shanghai, Guangzhou, Chengdu, Nanjing, Hangzhou and Shenzhen. Chinese customers can order a PC, notebook or servers, specifying their own configuration and software requirements, directly to a Dell sales executive, across 58 cities. Its direct, onsite service and technical support now covers over 1,550 cities. What is the future for Dell? Already being the number one computer maker in the world, Dell, will continue expanding beyond the PC. Michael Dell has already confirmed the company would soon start making printers. Dell recently started selling its own brand of held computers, called the Axim, at an aggressively low price. Computers are becoming the center of entertainment. Mr. Dell gave his vision about how computers would be changing, talking about PCs coming with built-in TV tuners and software to allow them to become personal video recorders. Dell Computers business strategy is centered around its direct business model and is very customer focused, and with this vision and vision, Dell will continue to grow, and be the main powerhouse PC maker to compete with.
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