...Dell Computer Corporation Dell Computer Corporation since its arrival in the computer manufacturing business has been following the “Direct Model” that has helped it to leverage its position as a leading manufacturer of PCs. When Dell entered the PC manufacturing industry there were already established competitors like IBM, HP, COMPAQ, Gateway and Apple.IBM was the pioneer with respect to technical standards in the PC industry and also had an open architecture allowing developers to build applications suitable for running on the IBM machines. The industry was rallying around the standards set by IBM and all major players in the industry had IBM clone machines except for Apple which was using alternative standards and had its own proprietary architecture. The major players had strong sales force teams and dealer networks .So the PC industry had a lot of competition and there was very less opportunity for any substantial growth in the industry. Because of presence of so many competitors in the industry price wars were common and locking in customers could only be done by providing them with a cost effective solution. Also the PC manufacturing industry had two prominent suppliers for the microprocessor (Intel) and the operating system (Microsoft) ,the two most important things required in building a PC. Even though Intel made the microprocessor available to purchasers at a standard price it rationed new products to PC makers based on the proportion of their previous purchases...
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...First Case Confidential 1. A. Because the developing of company is very fast, the company does not use an appropriate way to change it’s accounting rule. The company does not accurately reflect its business store and liability. The company can use some accounting rule to correct these mistakes, such as revenue recognition, amortization of revenue and vendor reimbursement agreements. B. There are some honest mistakes to record some transactions, because it is difficult to track very detail things and orders. There are no evidences to show that the recording of transection is unappropriated. C. If the error is material, it should be disclosed. But not all of errors are material. 2. A. The consistency provided by the rules described in this case is worth to comply in the company. Because it can provide an accurate and completed information to the company. But Dell Company is hardly to follow these rules for Dell company’s size. If company want follow these rules, the cost will be too high. B. Because there are a lot of transaction in Dell Company, Dell Company more likely to use GAAP rules. Because IFRS is more detailed then GAAP, Dell Company not requires tracing every transaction detail. C. The GAAP rule is more appropriate to investment manager. GAAP are imposed on company. Investors can get a minimum level of consistency in the financial statements, when they analyze the investment purpose of company. Therefor investors more trust GAAP. 3. Dell had...
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...increase from 1995 to 1996. This increase can be perceived as either a good or a bad thing depending on the situation at hand. On one hand, it shows a measure of the Dell’s efficiency and its short-term financial health is in a good place. One the other hand, it could indicate that there is too much inventory. In this case, the inventory is never kept at a high volume, so we can say that the increase in working capital is a good thing. Now, we need to look at the percentage change for each current asset and each current liability in comparison with the increase in the working capital trend. We may notice that each one plays a part in it. One asset that may stick out more than any of the others is the percentage change in inventory. If we take a look at Table 2, we will notice that, for the most part, the percentage change decreased from 1995 to 1996 compared to 1994 to 1995. For inventories, this percentage jumped from 33.18% to 46.42%. This big of a jump may send up some red flags since Dell does not want to hold too much inventory, but that is not want we want to take away from this. In this short time frame, Dell has grown significantly from the previous years. Since Dell is in the growth stage it is not something that should send up red flags. It should be looked at as a good thing because it means that the company is gaining...
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...Dell Case Study 1. What has made Dell successful to date? * Successful driver: 84% of orders and shipped within 8hrs, 5days inventory, reduced vendor from 200-25, internet created supply side efficiency, lower operating cost 1. Economic Condition: * The millennium effect * Strategic decision to leave the retail channel to directly interact with customers helped the mass customisation as well as the preserve of the profit margin * Followed the trend that Intel & Microsoft shaped * International geographic expansion 2. R&D, Logistics & Production: * Virtual integration with suppliers * Followed (progressively for this era) Just-in-time logistics reducing inventory costs, shortening the sell cycle. * Good MRP production cut cost of storage, shorten the supply line * Customization product to follow customers’ particular needs as much as possible (build to order system) * Built production plant in different countries to reduce cost for its international geographic expansion 3. Marketing & Sales: * Direct channel model: reduced cost of middle channels, aimed at the high velocity, and distributed value and provided capable opportunity for cross selling and up selling. (good performance on retaining this customer segment) * Flexible online channel store that contributed to up selling & cross selling by complementing the physical direct channel * Efficient multichannel customer service...
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...Introduction and Company background The purpose of this case study is to analyze the new product scenario and provide a written report. Dell Computers was founded by Michael Dell in 1984 and has its head offices in Round Rock, Texas. (Benedetto, 2012, p. 165) Michael Dell has a very simply philosophy, selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations. (Dell Inc. - Company Profile, Information, Business Description, History, Background Information on Dell Inc., 2012) Michael Dell started his company while he was still in College in 1984. The premise was to buy IBM parts wholesale and assemble computers and sell them for less money than the competitors were selling theirs for. Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year. (Dell Inc. - Company Profile, Information, Business Description, History, Background Information on Dell Inc., 2012) Dell soon realized that he could not keep up with the explosive growth of the company and hired Tandy Corporations marketing executive team to run things. Tandy was a competitor at the time. Dell has experienced a very nice trajectory through the 90’s and projection over the next 5 years show a 47% increase in the number...
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...Dell Case Answers 1. Dell built the computer systems after the company received the order. Dell focused on adopting a just in time inventory system that allowed them to keep their work in process and finished goods inventory between a 10-20% range. Their competitors had work in process and finished goods inventory between 50 to 70%. Dell’s supply of inventory was much lower than its competitors, which gave them a competitive advantage. Dell only had parts or raw materials in their inventory. Advantages of just in time inventory include faster turnaround of the products which reduces the risk of products being damaged, more cost efficient allowing a steady cash flow, and less space needed for inventory. Disadvantages include not having the product ready on time, and lack of control of time because Dell is depending on its suppliers. When technology was changing, Dell was able to jump on it fast. Dell was the first manufacturer to convert its entire major product line to the Pentium technology. Dell was able to offer faster systems at the same price its rivals were. Since Dell used just in time inventory, Dell was able to update any flawed chips and offer the new Windows 95 system the day it was launched. 2. Dell’s sustainable growth rate in 1995-1996 was: (Sales/Assets)*(Assets/E)*(Net Income/Sales)*(100%) (3,475/1,594)*(1,594/652)*(149/3475)*100% 2.1801*2.44478*.0429*.1 22.89% The actual growth rate is 1996: Ending Sales-Beginning Sales Beginning...
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...DELL COMPANY Our VisionTo help our clients meet their goals through our people, services and solutionsOur MissionInfosys International Inc. is dedicated to providing the people, services and solutions our clientsneed to meet their information technology challenges and business goals. • Work to understand the needs and requirements of our clients before proposing a solution • Develop responsive proposals that provide cost-effective solutions to our clients needs • Deploy the right mix of people and products to deliver value-added services and solutionsto our clients • Follow-up on the quality of our services and solutions to our clients • Appreciate the trust that our clients put in us as we work with them to improve their business and information technology PESPI Company * About PepsiCo UK & Ireland * Richard Evans, President of PepsiCo UK & Ireland * + Our Executive * Chief Personnel Officer * General Manager of Franchise Beverages * General Manager of Quaker and Tropicana * General Manager of Walkers * Senior Director Corporate Affairs * Vice President of Operations * Vice President of Sales * + Working with others * Forum for the Future * C3 Collaborating for Health * The Aldersgate Group * Magic Breakfast * Change4Life * Other partners and stakeholders * + Trade information * + Range and display * Core range...
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...“three golden dell rules”: Firstly ‘never sell indirect’, which is related to the direct sell model of Dell. This system is unique in the Computer Business and gives Dell an advantage on the market. The customer can get a customized computer, which is assembled related to the customers’ needs and order. Secondly ‘disdain inventory’, which is about the little amount of inventory in Dell and a good relationship to its high quality suppliers. Through the “assemble-to-order” system at Dell, they don’t need large inventory and can sell their products cheaper than their competitors. The third FSA is ‘always listen to the customer’. Because of the system, in which is no distributor in-between Dell and the customer, Dell has directly contact with their customers, which creates a better relationship. Through this Dell gets a better understanding of the customers’ needs.B. Most of the customers of Dell (Individuals and Companies) are experienced in the Computer business, so they often know exactly what they need and want. Those customers don’t need guidance, in form from face-to-face communication, for example in an electronic retailer. In addition to that it’s important for Dell to have suppliers, who are trustworthy and reliable, because one of Dell’s advantages is to assemble and deliver in a short period of time. The Logistic is also a crucial issue for Dell. The chosen delivery company needs to be able to transfer the computers at the right time to the right place. C. Dell is known...
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...analyze the possible alternatives of Dell Computer Corporation in funding its future growth and expansion from the point of view of its top management. Given the company’s financial statements, projected growth in sales, and its working capital financial ratios, this paper forecasted Dell’s balance sheet and income statement for 1997 to trace the external fund needed, if any, and which type of funding is most optimal to fund its future operations and growth. The forecast used a set of assumptions based on the company’s historical data and company policies. After experiencing its first loss late 1993, the company dedicated itself to bringing back its efficient operations to keep up with the fast growing computer industry, minimizing middlemen retailers and shifting the company’s focus to the growth of their liquidity, profitability, and overall growth. The company eventually recovered through its new and improved internal systems of inventory control and vendor certification, ensuring that its products are always of the highest quality. Ensuring its foothold in the market, Dell was the pioneer in manufacturing Pentium-based products and transforming its major product line to Pentium technology. In 1995, Dell was able to ship its new system that was equipped with Microsoft’s Windows 95 on the same day that Microsoft released their operations system. Now, Dell is again atop the industry outpacing revenue growth and increasing its net income. Dell in the recent years has always financed...
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...1. Dell, Inc. rose above its competitors in the personal computer industry thanks to its “Direct Model” strategy. While other companies sold their products through their distributors, resellers, and retailers, Dell sold directly to customers and built their products based on their specifications. While the company directly dealt with the end-customers, it also focused a lot of its marketing and sales on large customers. Dell saw its customers as either a relationship buyer (large organizations that placed repeat orders for multiple PCs) or a transaction buyer (small businesses and home computer users that can purchase a PC online or through a sales rep). The company had outside sales reps court the customers and had the inside sales reps support each of their assigned customers when they called. In addition to the company’s “Direct Model” strategy, Dell also segregated its sales effort based on region and country. It helped identify the opportunities that were unique to each segment. It also made it easier to manage its business because it wasn’t too big to handle. On top of that Dell made sure its products would not stay long in inventory. The production of its computers only required a few hours and they only stayed in inventory for 4 days. Dell’s competitors normally kept their computers in inventory for 20 to 30 days. The company communicated efficiently with its suppliers so that it delivered the correct parts necessary only when they were needed. That way, the parts did...
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...Introduction Dell Computer Corporation was founded in 1984 by Michael Dell in his dorm room at the University of Texas. In 2003, the company name was changed to Dell Inc. to reflect evolution of it from a computer manufacturer to a company that provides a wide range of technology related services. Dell Inc., now an American privately owned multinational company, became successful by providing quality inexpensive computer products than its competitors and grew to be the number one in the world (Exhibit 1) by implementation of its Direct Model. While competitors sold primarily through distributors, resellers and retailers, Dell directly took specified orders from customers through its established website and telephone lines, built and shipped devices to customers. Dell’s success started when its revenue surfaced $80,000 per month in 1984, and its ever growing revenue to billions of dollars, shares price and domination of PC market and standards until its defeat by Wlett-Packard (HP) in 2007. The ever falling of Dell’s shares price eventually made Michael Dell to buy back Dell’s shares in order to be able to restructure its legacy PC business one day. Company’s Current Strategy Dell Inc. pursues a focused differentiation strategy by offering premium quality products and devices and the best possible before and after sales customer service in a very timely manner. Dell believes it has the most efficient business model in the fierce competitive PC making industry. The company’s...
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...Abstract Company Overview Michael Dell, who was a student at the University of Texas, decided to establish a computer company with a capital of only $1000. He was following the "direct model" concept where all the products were customized based on the orders and requests of the customers. It is headquartered in Round Rock, Texas but receives nearly half of its revenues from outside the United States. Dell offers produces and markets a wide range of technology products for the consumer, education, enterprise, and government sectors. In addition to a full line of desktop and notebook PCs, Dell offers network servers, data storage systems, printers, Ethernet switches, and peripherals such as displays and projectors. In addition to third-party software and many services such as asset recovery, financing, support and so on. Strategic analysis summary This case study analyzes Dell Company from a strategic perspective, which shows that Dell follows a differentiation Strategy. In the analysis of Internal and External factors; Dell has scored medium on both external and internal factors analysis with scores of (2.78) and (2.56) respectively. Showing good financial position compared to its competitors, the financial analysis revealed that the company was able to enhance and increase its market share and power after the recession especially after 2009. This study led us to recommend using the QSPM matrix. Dell has to be aware of the price war started by rivals in which...
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...increase from 1995 to 1996. This increase can be perceived as either a good or a bad thing depending on the situation at hand. On one hand, it shows a measure of the Dell’s efficiency and its short-term financial health is in a good place. One the other hand, it could indicate that there is too much inventory. In this case, the inventory is never kept at a high volume, so we can say that the increase in working capital is a good thing. Now, we need to look at the percentage change for each current asset and each current liability in comparison with the increase in the working capital trend. We may notice that each one plays a part in it. One asset that may stick out more than any of the others is the percentage change in inventory. If we take a look at Table 2, we will notice that, for the most part, the percentage change decreased from 1995 to 1996 compared to 1994 to 1995. For inventories, this percentage jumped from 33.18% to 46.42%. This big of a jump may send up some red flags since Dell does not want to hold too much inventory, but that is not want we want to take away from this. In this short time frame, Dell has grown significantly from the previous years. Since Dell is in the growth stage it is not something that should send up red flags. It should be looked at as a good thing because it means that the company is gaining...
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...Dell Online Case Presentation Introduction & Challenge Dell has emerged as one of the biggest sellers in the PC market. From humble beginnings in 1983, when Michael Dell worked out of his campus dorm room, to 1996 when we reached $7.8 billion in sales, the source of our amazing success has been our unwavering focus on the customer, termed the “Dell Direct Model.” The Dell Direct Model was ingenious. Michael Dell took a simple concept, selling direct to the consumer (Appendix. 1), and built a business model that, quite simply, outclassed his competitors. By selling to the customer direct, eliminating the traditional dealer channel and using a just-in-time (JIT) production procedure, Dell has created unparalleled efficiencies in operations. This allows us to provide high quality products at a lower price than our competitors. In addition we have leveraged supplier relationships to build a supply chain that is unmatched; our relationships with our suppliers have facilitated our JIT production model which allows us to enjoy a significant competitive advantage in price, product reliability and product delivery. It appears that we are perfectly positioned to take advantage of the new online market having sold direct to customers for the last decade and already establishing ourselves as the leader in internet sales. Michael Dell has presented a strategic objective for our company, to “…do at least 50% of our business over the web…” Despite our initial success selling...
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...BaselineScience.com B a s e l i n e S c i e n c e , I n c . • w w w. b a s e l i n e s c i e n c e . c o m Matching Dell: A Strategic Case Analysis Dan Demers GS 604, Thursday 5:00 – 7:20 Matching Dell: Dell’s Key Strategic Issues At the close of the case, Dell is presented with two key strategic issues. The first strategic issue facing Dell is the movement of rivals seeking to mimic Dell’s direct sales model, while the second strategic issue is the declining trend in pricing in the Personal Computer Industry and the effects this trend will have on the operations and profitability of both Dell and Dell’s Rivals. In this case analysis, I recommend that Dell answer these issues by assuming a Cost Leadership in a Broad Market strategy to win the price war on cost, establish strategic relationships with system integrators and resellers to counter the product diversification threat of multi-offering Rivals, and strengthen its brand presence internationally to enable continued market growth. Personal Computer Industry: Industry Structure Analysis In this analysis, I define the Personal Computer Industry as that which is comprised of computer manufacturers responsible for the assembly of personal computers, either in entirety or with the assistance of contractors or channel partners. Dell is included in this definition, as are Dell’s Rivals highlighted in the case. In applying Michael Porter’s Five Forces Modeli, it is clear that the Personal Computer Industry is largely unfavorable...
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