COMPANY BACKGROUND
Michael Dell started selling personal computers and its components, by a company called PCs Limited, in 1984 when he was only 19 years. He had a simple idea in mind that PCs can be built according to specific order and then shipped directly to the customers. He made it possible by buying the surplus stocks from retailers at cost. He upgraded those items and then sold directly to customers. His new company was selling the computers which performance level was the same as IBM’s but he was able to make profit because he was selling at a 40% discount.
It was in 1987 that the company was renamed to Dell Computer. Not only the company name but Dell also changed its business model. He changed the corporate structure through the addition of production capacity and a larger management team. He also opened international offices in the same year. Soon, Dell increased its market share by selling the products to larger audience which included government agencies. It also became public in 1988.
In the first few years, PCs Limited was very successful but later they had to face many challenges related to financial and human resources. When Dell started this company, he followed a simple strategy: made built-to-order and sell directly. He believed that it has two advantages: elimination of the markups from retailers and cost reduction through built to order. However, from 1990 to 93, Dell slightly deviated from his main strategy. He was concerned about the growth from direct sales so he started selling his products through different retailers. But soon he learned that the profit margins are very low so he withdrew from selling through distribution channels. But low profit margin was not the only concern for Dell. During that t...
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...and development in the field of technology is very important. After the research comes a point where the executives have to make decisions based on what option to choose which can be followed based upon company’s strategy. And the best one for this company will be the one which can provide good performance and efficient for the company. And last but not the least, customer satisfaction is very important. It can be achieved by using standardized technologies which will give customers return on their investments.
Dell offers a wide range of products such as laptops, desktops, keyboards, and monitors. It also acts as a distributor of toners, digital cameras, televisions, etc. Dell provides related services to its customers in configuration, installation, and maintenance services. In addition, it offers financial services by allowing its customers to buy on credit.
... thing while being in the right time on the right place. Everything else is the history. Many stories were told about Dell. Dell was most famous for its customized products which they sold directly to customers. This strategy worked for some period, however to capture bigger market share Dell had to return to the retailers. Michael Dell is one of the biggest asset Dell has. His enthusiasm and hard work build a multibillion dollar company. He has promising outlook for the IT market and always make strategic decisions. Therefore Dell at the beginning made strategic decision to sell in the stores to capture market share, then they decided to sell directly to customers to avoid retailer margins, however, at the end they returned to retailers to capture market share again. Although these strategies contrasted each other, they were right strategies for the right time.
Computers have become a major part of our personal and business life. There are several professionals who made an impact on the computer industry, however in this paper I will only be comparing and contrasting two professional CEO’s: Michael Dell the founder of Dell Computers Inc., and Andy Grove the co-founder of Intel Inc. The information will be from chapters 2 and 5from a book by Jeffery A. Krames (2003), What the Best CEOS Know: 7 Exceptional Leaders and Their Lessons for Transforming Any Business. I will be discussing their contributions to their field, the resistance they encountered, their similarities and differences, then finish up with the factors that impacted their success.
Success started at a young age for Michael Dell, he was only 12 years old when his first product catalog called “Dell’s Stamps” advertised in the local trade journal. He learned early in life to develop a direct relationship with the customer which later would provide the key to his success (Krames, p. 58). Andy Grove had teamed up with Bob Noyce, and Gordon Moore in 1968 after discovering they could create chips with massive memory. Grove used a metaphor to describe his foundation of success – a three-legged stool; execution and strategy (Krames, p. 137). When one leg is off, it throws off the whole system. Dell’s major accomplishment came when he planned and sold personal computers out of his dormitory room which lead to the creation of Dell Computers Corporation. At the age of 27, Dell was the Top CEO of a Fortune 500 company. He had clear ideas about how-to-do business.
Dell’s main strength lies in their perfection of the Direct Model, which boasts a production process that lasts only a day and a half so the company is able to serve customers quickly and has the capacity to withstand very large orders. Dell built held no finished goods inventory on hand, which helps to reduce idle assets and risk. The company maintained excellent relations and communication with suppliers who were able to adhere to Dell’s just-in-time inventory management and allowed suppliers to send shipments direct to customers, reducing inefficiency. Dell encouraged suppliers to locate their facilities in close proximity to assembly operations. Additionally, Dell had very high customer service and support satisfaction and maintained some of the best performance metrics in the industry. Finally, their main source of revenue came from businesses and large government institutions and no single customer represented more than 2% of their sales, which lowers their risk of buyer power.
There are several current legal and regulatory aspects that face the company. The company has to meet the entire legal requirement and frame work of operating in computer technological industry as far as quality and price regulations are concerned. Dell has been able to meet the legal and standard requirements in the manufacture, distribution and promotion of its products. For instance it offers its products at reasonable prices that reflect the industry pricing regulations. The...
Dell Computer Company is known for its meteoric rise to industry dominance based on founder Michael Dell’s ability to transition a part-time business of building and upgrading personal computers into a multi-billion dollar enterprise (O’Rourke, 2010). Dell’s business model was producing low cost, high quality PC’s that were built-to-order called “Dell Direct”. The strategy of shipping direct to customers eliminated the need for middlemen and gave Dell a competitive advantage (O’Rourke, 2010). Company growth surged in the 1990’s with over 38,000 employees and a global platform. Dell and Chief Operating Officer, Kevin Rollins, created a fast-past, win-at-all-cost, highly competitive organizational culture whereby compensation and promotions were based on exceptional performance (O’Rourke, 2010). Finally, in 2000, Elizabeth Allen joined the company as vice president of corporate communications.
From the first Apple computer to the iWatch, Steve Jobs and Steve Wozniak started out in the business of kit computers with the Apple I. This initial production run, although popular as a collectible now, will mainly be remembered for helping the company get enough capital to build the Apple II in 1977 - the same year Apple officially incorporated. Steve Wozniak primarily built both these computers and Steve Jobs handled the marketing side. The Apple II drove the company’s revenue until the mid-1980s despite the hardware remaining the same. Apple attempted updates like the Apple III and the Apple Lisa, but these failed to catch on commercially. Although the Apple II was still selling, Apple as a company was in trouble when the 80s began. The 1984 release of the Macintosh was a leap forward for Apple, but in the intervening years between the Apple II and the Macintosh, IBM had caught up. Disappointing revenues from the Macintosh and internal struggles for control led to Apple’s board dismissing Steve Jobs in favor of John Sculley. Steve Inc. Under Sculley, Apple started growing its product lines. John Sculley served as Apple’s CEO
In 1984, the same year that Compaq introduced a PC that included Intel’s new and more powerful 80386 class of microprocessors, beating IBM to market and Michael Dell began building IBM compatible computers in his college dormitory, Lenovo was form as a shop in a small concrete bungalow in Beijing with a mandate to commercialize the Academy’s research and use the proceeds to further computer science research.
Speaking about the business model of Dell, it has ability to remain on the higher end of the scale for a particular time period. Dell has business model, which primarily focuses on direct selling line of attack. It in a straight line supplies the PCs to the regulars. It does not believe in intermediary, retailers for the business practices. Undeniably, this gives them an edge to serve customer well. Nevertheless, it understood the importance of retailers and start offering products on the premises of retailers, such as Wal-Mart, Sam’s Club and so on. Next, Dell administration is certain of the exclusive business of PCs. As time goes on, however, observing the
On April 1, 1976, high school buddies Steve Jobs and Steve Wozniak started Apple Computer. Throughout the two Steves’ relationship, Wozniak (nicknamed Woz) had designed quite a few electronic devices. He built computers and other random things, such as an illegal device that let one make free phone calls. After seeing the Apple 1 computer that Wozniak had made, Steve Jobs insisted that they market and sell the technology. While the Apple 1 did not sell as well as they had hoped, its successor, the Apple 2, made up for it by offering a smaller, more compact design and its own case. These first two computers were a great start for such a young company as Apple.
In 1984, Michael Dell invested $1,000 in start-up capital to register his business as Dell Computer Corporation, which was known as PC's Limited. The company becomes the first in the industry to sell directly to end-users by passing the dominant system of using computers resellers to sell mass-produced computers. Dell Computer also pioneers the industry first thirty-day money back guarantee. It became the cornerstone of Dell's commitment to expand its service offerings, superior customer satisfaction, and the industries first on site service program. It also established its first international subsidiary in the United Kingdom, and raised $30 million in its initial public offering.
In December 1996, Apple bought Next Inc for $400 million dollars. After Apple buying Next Inc Apple was generating big losses due to competing companies using the Intel chips and Microsoft software. Just after eight months after Apple bought Steve Jobs company Next Inc Apple appointed him as interim CEO and permanent CEO by January 2000. Soon after Steve Jobs was appointed CEO Apple introduced the IMac in 1998. The IMac was a success and sold over 1.8 million units in the 1999 fiscal year. In 2001 that's when business was going to really start to take off for Steve Jobs, when the ipod was introduced, following the iPod Nano, the video iPod in 2005 and the iPod touch in 2008. In 2007, the iPhone was introduced which sold over 11.6 million iPhones in the 2008 fiscal year. IPhones accounted for 43% of net sales in the 2011 fiscal year. Steve Jobs then introduced the iPad in 2010 and Apple has been revolutionizing the wa...
It was Steve Jobs who made Apple leave the garage and make leaps and bounds in the world of technology. Steve Wozniak made the first prototype, but it was Jobs who “saw the potential” in his computer and persuaded Wozniak to sell it (Peterson 106). Even though that first computer saw very little success, Jobs knew that Apple had potential and so released the Apple II. From the beginning Jobs knew what the consumers wanted, and where computers were going to take the world; he had a vision of the opportunities in technology and saw that Apple needed to move in a different direction. In 1984, one year before he left, Jobs finished the Macintosh computer system. He was pushed from his original computer design project, “the Lisa”, and then raced to release the Mac first, but the Lisa was released to the public first. Although the Lisa came out first, the Mac “[became] synonymous with Apple, mark[ing] a…revolution in…personal computing,” (Peterson 106).
Dell’s initial competitive strategy, when it was founded in 1984 by Michael Dell, was to focus mainly on differentiation. Its strategy was to sell customised personal computer systems directly to customers, which was a rapidly emerging market at that time (1). This was done by targeting second-time customers, those that already understand computers and know what they wanted. Meanwhile other companies at the time was selling “’plain brown wrapper’ computers” (2). By offering customisations, Dell gained a better understanding of customers’ needs and wants. This helped the organisation position itself differently against the more popular brands, such as Compaq and IBM.
Throughout Steve Jobs early life, he went through many successes and struggles. During his upcoming days he worked at Hewlett- Packard, where he met a man named Stephen Wozniak. Stephen Wozniak had always been interested in technology and improving daily life with personal electronics. In 1974 Steve Jobs asked Wozniak if he would help him create the first personal computer (Schlager and Lauer). Wozniak then quit his job at Hewlett- Packard, once they had enough money, and began to create a business with Jobs. While working in Jobs bedroom and garage, they designed and built their personal computer prototype (Schlager and Lauer). Through their dedication to the project he pair marketed their creation two years later, the Apple I in 1976, which sold for 666 dollars (Schlager and Lauer).