Dell: Returning back to pavilion

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Dell Inc., formerly called "PC’s Limited" (1984–88), is a global company that designs, develops, and manufactures personal computers and a variety of computer-related products. The company is one of the world’s leading suppliers of PCs.

Founded on the thesis of creating and selling custom-built PCs directly to customers, the company initially sold its products through advertisements and mail-order catalogs. By avoiding the costs associated with traditional retail markets, Dell was able to offer high-quality PCs at competitive prices. The founding of the company happened in a particular dorm room, and now it employs more than 145,000 people in the U.S. and around the world.

Dell - Company Highlights

Startup Name Dell Inc.
Headquarters Round Rock, Texas, U.S.
Industries Computer Hardware, Computer Software
Founder Michael Dell
Founded February 1, 1984
CEO Michael Dell
Areas served Worldwide

Dell - About and How it works?
Dell - Logo and Meaning
Dell - Founder and History
Dell - Mission
Dell - Business Model
Dell - Revenue
Dell - Funding and Investors
Dell - Investments
Dell - Competitors
Dell - Challenges faced
Dell - Growth
Dell - Achievements
Dell - Future Plans

Dell - About and How it works?

Dell is an American multinational computer technology company that develops, sells, repairs, and supports computers and related products and services. Named after its founder, Michael Dell, the company is one of the largest technology corporations in the world, employing more than 165,000 people in the U.S. and around the world. It is one of the biggest PC product companies in the world.

Dell sells personal computers (PCs), servers, data storage devices, network switches, software, computer peripherals, HDTVs, cameras, printers and electronics. The company is well known for its innovations in supply chain management and electronic commerce, particularly because of it's direct-sales model and its "build-to-order" approach to manufacturing and delivering individual PCs configured to customer specifications.

Dell - Logo and Meaning

Dell's Logo
Dell's Logo

The Dell logo is a basic word apart from the slanted 'E'. The company's founder Michael Dell started his business with the aim to “turn the world on its ear”. When creatives from design firm Siegel+Gale devised the company logo in 1984, they decided to represent this by slanting the letter 'E'.

Dell - Founder and History

Michael Dell is the founder, chairman and CEO of Dell.

Michael Dell, Founder of Dell
Michael Dell, Founder of Dell

The company, first named PC’s Limited, was founded in 1984 by American Michael Dell, who was then a student at the University of Texas in Austin. Initially running the business from a dormitory room, Dell started out providing customized upgrades for PCs. The venture proved profitable, and then Dell dropped out of school to focus full-time on his fledgling business as he got $1,000 in expansion-capital from his family and began building PCs. In 1985 the company released the Turbo PC, the first computer featuring Dell’s own design, which sold for $795. PC's Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of operation.

In 1986, Michael Dell brought in Lee Walker, a 51-year-old venture capitalist, as president and chief operating officer, to serve as Dell's mentor and implement Dell's ideas for growing the company. Walker was also instrumental in recruiting members to the board of directors when the company went public in 1988. The company dropped the PC's Limited name in 1987 to become Dell Computer Corporation and began expanding globally. There were a great increase in sales and the capital increase as well.

With the increase in sales, the company came to be known for the people in the best way. More and more companies wanted to join with Dell, and there is no doubt about the fact that Dell became one of the best companies to provide the computers.

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Dell - Mission

The mission statement of Dell says, "Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of Highest quality and Leading technology".

Dell - Business Model

With the help of the amazing computer services and products that are provided to the people in the best way, the company has managed to have the widest customer base with a revenue-generating business model. The customers that are present in the company have some different needs. The business model focuses more on the fulfillment of the needs and requirements that customers have. As per the customers’ need, the company makes different types of products.

Different Sections of Dell Business Model :

1. Products and Services for the Large Enterprises

2. Products and Services for the Public

3. Products and Services for Small As Well As Medium Businesses

4. Products and Services for Consumer

Dell - Revenue

Dell Technologies Inc. reported decrease  in Revenue in the second quarter by -2.73% to $ 22,733.00 millions, from the same quarter in 2020. The decrease in the second quarter Dell Technologies Inc 's Revenue compares unfavorably to the Company's average Revenue growth of 3.61%. Looking into second quarter results within Computer Hardware industry 3 other companies have achieved higher Revenue growth. While Dell Technologies Inc's revenue decline of -2.73% ranks overall at the position no. 1617 in the second quarter.

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Dell - Funding and Investors

Dell is registered under the ticker  NYSE:DELL . Their stock opened with $46.00 in its Dec 28, 2018 IPO. Dell has raised a single venture fund, Dell Innovators Credit Fund. This fund was announced on Jun 7, 2012 and raised a total of $100M.

Dell - Investments

Dell has made 29 investments. Their most recent investment was on Oct 4, 2017, when FogHorn raised $30M.

Date Stage Amount Organization Name
Oct 4, 2017 Series B $30M
Apr 7, 2009 Series B $47.5M Lightbend
Feb 29, 2008 Series C $18.8M Cambridge Quantum Computing
Nov 15, 2002 Series E $35M Digital Asset
Mar 11, 2002 Series H $20M Cambridge Quantum Computing
Jul 23, 2001 Venture Round $120K Finclude
Jul 23, 2001 Series C CA$50K Syngli
May 25, 2000 Venture Round CA$50K Syngli
May 22, 2000 Venture Round $140K Borza
May 16, 2000 Venture Round - Hafnium Labs

Dell - Competitors

Dell Technologies Inc.'s main competitors include Hewlett-Packard (HP generates 81% of Dell's revenue), Lenovo (Lenovo has 79,000 fewer employees than Dell), IBM(Compared to Dell, IBM has 241,800 more employees), Apple, Asus and Acer.

Dell - Challenges faced

In 2008, Dell announced that it was moving in retail market without compromising its “direct selling model” and “make-to-order” approach. This approach allowed Dell to operate on low inventory level providing a significant cost advantage. The direct selling approach also has bypassed wholesalers and retailers reducing further costs.

Apart from the many challenges Dell faces, one challenge however stands out the most: Forecasting. In supply chain management, forecasting is a crucial and necessary element. An accurate forecasting ensures that Dell has enough supplies to meet customer demands. Such forecasting is done in advance to provide smooth transition between supply and demand. Even a slight error in forecasting can result in loss of sales, excess products, and unusable stock.

The biggest challenge Dell is facing right now is its ability to innovate Although the company has spent billions of dollars on research and development, the problem is that most of the innovation in tech right now is being driven by developers rather than companies.

Dell also has some serious challenges to overcome if it’s to maintain its dominant position, with the unstoppable rise of cloud computing, its complex portfolio of overlapping products and reduced spending for on-premises infrastructure putting it under pressure to keep making gains in market share.

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Dell - Growth

From 1997 to 2004, Dell enjoyed steady growth and it gained market share from competitors even during industry slumps. During the same period, rival PC vendors such as Compaq, Gateway, IBM, Packard Bell, and AST Research struggled and eventually left the market or were bought out. Dell surpassed Compaq to become the largest PC manufacturer in 1999. Operating costs made up only 10 percent of Dell's $35 billion in revenue in 2002, compared with 21 percent of revenue at Hewlett-Packard, 25 percent at Gateway, and 46 percent at Cisco. In 2002, when Compaq merged with Hewlett-Packard (the fourth-place PC maker), the newly combined Hewlett-Packard took the top spot but struggled and Dell soon regained its lead. Dell grew the fastest in the early 2000s.

Dell attained and maintained the top rating in PC reliability and customer service/technical support year after year, during the mid-to-late 1990s through 2001 right before Windows XP was released.

Dell - Achievements

  • Dell was recognized by Ethisphere as one the world’s Most Ethical Companies for the eighth time.
  • Dell Technologies earns 100 percent on the Human Rights Campaign Foundation’s annual scorecard assessing LGBTQ workplace equality.
  • Fast Company’s World’s Most Innovative Companies in 2019, for innovation in consumer electronics.
  • Winner of Responsible Business Alliance’s Compass Award for leadership in accelerating the circular economy with rare-earth minerals.
  • Dell won Forbes Best Employers for Diversity 2019 List, which was compiled by surveying 50,000 Americans working in companies with more than 1,000 people.
  • Dell Wins High-Tech Supply Chainnovator 2019 by Building a Legacy of Good to Tackle Circular Economy, May 2019.

Dell - Future Plans

To compete in the future, the company is stepping out of the spotlight or to re-imagine a new service-based business. This September CEO Michael Dell announced that he would be taking his namesake company—which he founded as a college student 29 years ago—private. The plan is to be back to the pavilion.

"In taking Dell private we plan to go back to our roots, focusing on the entrepreneurial spirit that made Dell one of the fastest growing and most successful companies in history," Dell said.

This move is noteworthy because it highlights Dell's ability to recognize changes that is the shrinking PC market, accept them, and find a solution to remain competitive. Instead of chasing a dying dream, Dell wants to focus his company on areas of growth, including cloud computing, Big Data, security software, and mobile.

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About Sarika Anand

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