...Managerial Finance Reflection Essay 5th July, 2015 DELL’S WORKING CAPITAL Dell computer Corporation, a company with a Build-to-order manufacturing system, focused mainly on selling directly to the customers. It was their Core Strategy. The company has reported impressive growth in FY-1996 and is predicting a future growth of 20% annually. Positive Inferences - DELL The primary advantage for the growth of the company is their Inventory Management. It followed the build-to-order strategy which resulted in Low Finished goods inventory. The Days Supply of inventory for Dell is the lowest in the industry. (ALSO A NEGATIVE EFFECT) DSI Dell Apple Compaq IBM 1993 55 52 72 64 1994 33 85 60 57 1995 32 54 73 48 Also, when we consider the income statement of the Company, it becomes clear that the company is growing in terms of its SALES per annum. The sales of the company have grown by 83% from 1992-1996. Income Statement - DELL Sales COGS Gross Margin Op. exp income financing tax net profit 1996 1995 1992 1996-‐1992 5296 100.00% 3475 100 890 100 4406 4229 79.85% 2737 78.76% 608 68.31% 3621 1067 20.15% 738 21.24% 282 31.69% 785 690 13.03% 489 14.07% 215 24.16% 475 377 7.12% 249 7.17% 67 7.53% 310 6 0.11% -‐36 -‐1.04% 7 0.79% -‐1 111 2.10% 64 1.84% 23 2.58% 88 272 5.14% 149 4.29% 51 5.73% 221 83.19% 11.54% -‐11.54% -‐11.13% -‐0.41% -‐0.67% -‐0.49% -‐0.59% The rate of...
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...Dell Computer Corporation Performance Metrics Every component of a corporate sustainability model should be associated with performance indicators such as inputs, processes, outputs, and outcomes. By determining the appropriate performance measures needed for each component of the sustainability model, companies can evaluate the performance and financial benefits of the sustainability initiatives. Dell Computer Corporation knew that balance is especially important in performance measurement and wanted to make a change to improve their reputation and also their consumer sales. The performance metrics that are most valuable to Dell from the inputs are mostly from the business context performance measures which include number and size of competition, diversity from competition, market size, and their competitive position within the industry should be the most important to them since they have so much competition in the industry (Epstein, 2008, p. 169). One way that I found through research that Dell has come up with to stay unique and making them competitive with their competition was by creating “the Dell Precision T5500 and T7500 which deliver up to 90 percent better multi-threaded digital content creation application performance versus previous generation systems” (Bolen, 2009). “The new systems are purpose-engineered for professionals in engineering, media, entertainment, biosciences, exploration, economic modeling and risk analysis” (Bolen, 2009). Dell feels that this will...
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...Dell Computer Corporation Performance Measures Dell Computer Corporation Performance Metrics Every component of a corporate sustainability model should be associated with performance indicators such as inputs, processes, outputs, and outcomes. By determining the appropriate performance measures needed for each component of the sustainability model, companies can evaluate the performance and financial benefits of the sustainability initiatives. Dell Computer Corporation knew that balance is especially important in performance measurement and wanted to make a change to improve their reputation and also their consumer sales. The performance metrics that are most valuable to Dell from the inputs are mostly from the business context performance measures which include number and size of competition, diversity from competition, market size, and their competitive position within the industry should be the most important to them since they have so much competition in the industry (Epstein, 2008, p. 169). One way that I found through research that Dell has come up with to stay unique and making them competitive with their competition was by creating “the Dell Precision T5500 and T7500 which deliver up to 90 percent better multi-threaded digital content creation application performance versus previous generation systems” (Bolen, 2009). “The new systems are purpose-engineered for professionals in engineering, media, entertainment, biosciences, exploration, economic modeling and risk...
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... Course Title Professor’s Name 14 March 2008 Dell Corporation Introduction Dell Corporation is one of the leading computer companies in the world operating on the global scale since 1990s. Dell relies on innovative technologies and new solutions which help the company to reach global consumers and market high quality products in different categories. International expansion helps Dell to obtain strong market position and sustain strong growth. A current strategy of Dell includes the determination of the basic long-term goals concerns the conceptualization of coherent and attainable strategic objectives. Key Components of the Business Environment of Dell High-technology market is marked by increasing capital markets activity over the past 5 years. It is estimated that average annual returns are anticipated to exceed 13 percent over the next 10 years, with investment alternatives performing at single digit growth rates (approximately 7 percent to 9 percent). This approach is based on Dell superior understanding of the problem solved by the product, the benefits it offers and issues it addresses. Dell is a leader in IT industry with S$ 57.095 billion revenue a year. Customers and technology are the primary driving factors in this arena (Dell Corporation Home Page 2008). Customers want products that satisfy their needs or improve their productivity. In 2 order to respond to external environment, Dell looks for ways to deliver these benefits at a lower cost...
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...The corporation that I have selected to write in relation to is Dell. Dell is an international computer company that trades computers and additional devices of electronic for instance tablets. Dell commenced as an eccentric start-up PC company that ultimately grow up into one of the major internationally competitive computer business in our existing market. Michael Dell founded the Dell Company when he was only 19 years old; he established PC limited with only $1000 and had a game shifting visualization of how technology must be extended, produced and sold. Owing to the vision of Michael Dell, the business ascended to one of the apex five companies on the globe amid 1992 and 1995. When Dell speedily enlarged its worldwide operations around 1996, it started their online sales; they then placed the bar for worldwide e-commerce sales. Sometime around year 2000, Dell developed up becoming the number one computer producing company in the world (www.dell.com). The utmost success that Dell has had right through the years has been through their innovation. Innovation in the computer industry is the main ingredient for enduring to be successful. Year following year you have got to produce new products that will plea to customers out there. Dell has successfully done that for years, and they have been capable to continue as a foremost computer sales corporation together with further big computer companies for instance Microsoft and Apple. Its innovative nature is what continues Dell...
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...[pic] Dharini Giri 12050221051 FC- 3yr Dell Introduction Dell Inc. is an American privately owned multinational computer technology company based in Round Rock, Texas, United States, that develops, sells, repairs and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide. Dell sells personal computers, servers, data storage devices, network switches, software, computer peripherals, HDTVs, cameras, printers, MP3 players and also electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce, particularly its direct-sales model and its "build-to-order" or "configure to order" approach to manufacturing—delivering individual PCs configured to customer specifications. Dell was a pure hardware vendor for much of its existence, but a few years ago with the acquisition of Perot Systems, Dell entered the market for IT services. The company has since made additional acquisitions in storage and networking systems, with the aim of expanding their portfolio from offering computers only to delivering complete solutions for enterprise customers. History Dell traces its origins to 1984, when Michael Dell created PC's Limited while a student of the University of Texas at Austin. The dorm-room headquartered company...
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...Dell Company Today, I would like to talk about a famous computer company called Dell. I chose to write about Dell company because it has become one of the most successful corporation in the computer business. From the year 2000, Dell Computer has become the U.S. leader in personal computer sales and the second biggest one worldwide. Before I start on my presentation, I would like to ask a question: What has made Dell company set apart from most computer companies? My presentation will be focusing on answering this question. But, before I answer such a question, let me first give us a brief history of Dell Company. Firstly, looking at the background of Dell company. Dell Company was founded in 1984 by Michael Dell who was a college student at that time. Michael Dell started out his business by buying computer parts from the wholesale distributors, assembled them using IBM models, and sold these computers via mail at a high price. Then, Dell expanded rapidly and its growth move fast. Now, Dell employs more than 77,000 people around the world. Now, let me talk about the secret behind the great success of Dell company. Dell has followed two strategies, which no company has ever thought about. The first strategy is to sell computers directly to consumers. In this way, they eliminate the need for retailers to serve as middle-men. This process is known as a "direct business model". It has made Dell to grow...
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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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...Dell Corporation, Strategic Case Analysis prepared by Ijaz Qureshi and John Mufich, Argosy University Business School, San Francisco, California, USA. Case Analysis: Dell Corporation By: Ijaz Qureshi & John Muffich For: Dr. Admassu Bezabah B7405 Business Policy Seminar Summer II: 2004 © Ijaz and John, Argosy Business School, Argosy University, San Francisco, California, USA 1 Dell Corporation, Strategic Case Analysis prepared by Ijaz Qureshi and John Mufich, Argosy University Business School, San Francisco, California, USA. Executive Summary: Dell computer was founded by Michael Dell at age of twenty one in his dorm at the University of Texas, Austin. Dell’s strategy is to build computer so that it can be order by the consumers. It’s build to order strategy has made Dell the most successful company in the information technology field. Dell sells its machines and other equipments directly to customers so it has eliminated the middleman. Dell has high margin because of direct sale strategy and customers get excellent state of the art machines at low cost compare to Dell’s competitors. Michael Dell’s visionary leadership has made Dell the second most successful PC maker in the industry. (IBM is the leader). Dell’s ability to adapt to changing circumstances is its great strength. One week after the September 11th 2001 attack, Dell reported selling 24,000 servers and desktops. Dell established mobile technology park in Washington D.C. and New York by converting...
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...Introduction Dell Corporation is an American company based on Round Rock, Texas, United States. Their service is about IT services, makes, sells and develops personal computers, servers, peripherals, smartphone and televisions. Dell is one of the largest technological corporations in the world and has employers about 104,000 people worldwide. In 1984, Dell started small under Michael Dell 19 years old, Dell initially had $1000 to use on computers parts that he assembled into PCs and sold over the phone. First, Dell had just 5 employers to assembled and taking orders in the same times. Then, in 1993, Dell started to expand the company by increasing the worker about 4,500 people. After that Dell had to hire strategic managers who helped assist him in the company’s various areas such as finance, marketing and manufacturing. Dell Corporation is well known for providing excellent service to its customers, especially for the customers who were encountering issues with setting up their computers. But for the last 3 years its profits declined 4.8 per cent. Because now a day, there are so many competitors such as Apple, Samsung, LG and so on. They provide the products the same as Dell or even better and more such as smartphone and tablet. This is one of the reasons why the profits of Dell declined for the last three years. And the solution is they have to expanding rapidly by their strong capabilities, ongoing innovation and smart acquisitions (Modine, 2013). ...
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...gifted strategist that use their out of the box thinking to achieve an objective or goal which allows its business a chance to compete in its specific industry (Sooperturtorials.com, 2009). Porter’s five forces model of competitive analysis is very popular and widely used for developing many ideas and strategies across many industries. The intensity of competition varies across industry. The intensity of competition is likely to be higher in low return industries as compared to high return industries due to the fewer requirements of capital and common products that require minimum R & D and efforts for production. In the category of business technology involving personal and business, computers have become a commodity and Dell Computer Corporation has evolved with the growing market. The competition is fierce in this sector and margins can be low. The lower end computers with high-speed internet capabilities have become the main selling force. As dial up internet continually proceeds to fade away and the consumers’ needs to upgrade their computers grow, the need to satisfy the consumers demand for high-speed internet will increase as well. Competition in peripherals is also very intense. New peripheral entrants will drive the margin down even further and create more competitiveness in the industry. In the mind of Porter, the ideal nature of competitiveness in a...
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...analysis Dell’s Direct Model and its basic working and success and future challenges. Dell’s Direct Model Dell has been following it’s unique direct build-to-order sales model for more than 20 years. Customers can plan their own configuration and place orders directly with company via the phone or a web site. Over the years Dell supply chain efficiencies and direct sales gave it a competitive advantage. Dell has also leveraged JIT principle to make its manufacturing process success. Dell’s approach to JIT is different in that they leverage their suppliers to achieve the JIT goal. They are also unique in that Dell is able to provide exceptionally short lead times to their customers by forcing their suppliers to carry inventory instead of carrying it themselves and then demanding (and receiving) short lead time on components so that products can be simply assembled by Dell quickly and then shipped to the customers. Characteristics of direct model * Eliminate costs and risks of carrying large finished goods inventories * High velocity * Low-cost distribution * Direct customer relationship * Build-to-order * Just-in-time manufacturing * Products and Services aimed at specific market segments * Reduced channel costs: from 13.5%-15.5% to 2% of product revenue * Latest Technology was introduced faster than indirect channels * Dell can use IT to directly control its value chain, set quality measures and monitor in real time how material...
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...Product Development at DELL Since its founding in 1984, Dell corporation had enjoyed tremendous success in the desktop computer industry. Their strategy was to eliminate the middleman by directly servicing the customers through mail orders . Dell grew from obscurity to a fortune 500 company in 1992, making its founder Michael Dell one of the youngest highly successful entrepreneurs of his time. At the core of Dell’s business model was Spartanism which inspired informality in processes and low R&D costs allocation. This worked with their desktop business and their imitators such as Gateway 2000 and CompuAdd were always playing the catching-up game. However moving ahead this philosophy, their foray in to the portable computer business was not as successful. This was an industry that revolved around several technological breakthroughs and required higher workmanship & quality control to manufacture products. Here, Dell fell short of delivering quality portable computers. Their brand suffered a major setback when their first line of portables were reported to have technical problems and about 17,000 units had to be recalled just one day before the launch. Soon after, Dell’s percentage sales in portable computers went to 2% from 17%, and their stock plunged by $7 in a single day. The portable computer industry was growing fast [Exhibit 1] and was deemed to spark a new wave of consumer demand. The major problems staring Dell in face were regarding quality and management...
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...and storage, LCD monitors and high-definition TVs, and handheld/navigational devices. Acer's unique Channel Business Model is instrumental to the company's continued success. The model encourages partners and suppliers to collaborate in a winning formula of supply-chain management, allowing Acer to provide customers with fresh technologies, competitive pricing, and quality service. Established in 1976, Acer Inc. employs 5,300 people supporting dealers and distributors in more than 100 countries. Estimated revenue for 2006 is US$11.31 billion (Acer Annual Report 2005). Stan Shih, the founder and chairman of the Acer group and widely regarded as a high-tech visionary, had a long term vision to transform the Group into a global high-tech corporation. Though fully committed to aggressively pursuing growing segments of the PC market, Acer also began to shift a sizeable portion of its attention and resources to the 3E market – education, entertainment and e-commerce. Newly created ventures in semiconductors, communications and consumer electronics were expected to play an integral role in Acer's strategic growth,...
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...In te r n a ti o n a l J o u r n a l o f M a n a g e me n t C a s es BOOTSTRAP FINANCING: FOUR CASE STUDIES OF TECHNOLOGY COMPANIES EVA M.TOMORY UNIVERSITY OF TORONTO, CANADA Abstract Innovative businesses, especially in the early stages of their life cycles, often encounter difficulty in obtaining long-term external financing. Their founders tend to seek financing through nontraditional bootstrapping methods to launch their ventures. Bootstrap financing refers to a range of creative ways to acquire resources without relying on borrowing money or raising equity from traditional sources (Freear et al., 1995a). The paper examines how successful technology entrepreneurs used bootstrap financing: the founders of Microsoft Corporation, Apple Inc., Dell Inc. and Research in Motion Ltd. The research investigates the elements of bootstrapping as described in Freear et al. (1995a) and in Winborg and Landström (2001), finding that entrepreneurs use bootstrapping extensively during the early stages of growth for both product and business developments. Bootstrapping methods change as the business develops with certain methods used more at the beginning of the life cycle, and different variations used as the business starts to grow. The study also points out that even the most successful technology-based consumer goods businesses relied on bootstrap financing at the early stages of their development. This technique deserves more attention from the scholarly community since it is certain...
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