Dell :: GCSE Business Marketing Coursework

dellIn 1984, at the age of 19, Michael dell founded Dell estimator with a simple vision and business fantasythat personal computers could be built to order and sold directly to customers. Michael Dell believed his approach to PC manufacturing had two advantages (1) bypassing distributors and retail dealers eliminated the markups of resellers, and (2) giveing to order greatly reduced the costs and risks associated with carrying large stocks of parts, components, and finished goods. While Dell reckoner sometimes struggled during its early years in trying to refine its strategy, build an adequate infrastructure, and establish market credibility against better-known rivals, its build-to-order and sell-direct approach proven appealing to growing numbers of customers in the mid-1990s as global PC gross sales rose to record levels. And, just as important, the strategy gave the gild a substantial cost and profit-margin advantage over rivals that manufactured PCs in volume and kept thei r distributors and retailers stocked with ample inventories.Going into 1998, Dell data processor had a 12 pct percent of the PC market in the United States, trailing only Compaq Computer and IBM, which held first and second model in the market, respectively. Worldwide, Dell Computer had nearly a 6 percent market share (see Exhibit 1). And the company was gaining market share speedily in all of the worlds markets. The companys fastest growing market for the past several(prenominal) drags was Europe. Even though Asias economic woes in the first quarter of 1998 resulted in a slight decline in Asian sales of PCs, Dells sales in Asia rose 35 percent. Dells sales at its earnings Web site were averaging $5 million a day and were evaluate to reach $1.5 billion annually by year-end 1998. Dell Computer had 1997 revenues of $12.3 billion, up from $3.4 billion in 1994a compound average harvest-time rate of 53 percent. Over the same period, profits were up from $ cxl million to $944 mill ionan 89 percent growth rate. Since 1990, the companys stock toll had exploded from a split-adjusted price of 23 cents per share to $83 per share in May 1998a 36,000 percent increase. Dell Computer was the top-performing largish company stock so far during the 1990s and seemed poised to break the stock of the decade.Dells principal products included desktop PCs, notebook computers, workstations, and servers. The company overly marketed a number of products made by other manufacturers, including CD-ROM drives, modems, monitors, networking hardware, repositing cards, storage devices, speakers, and printers.