Category: Analysis Essay

Executive Summary (Why Dell Was Chosen)

Dell is the third largest private company in America. It is also one of the best employers in America, having recruited up to a hundred thousand employees. Its brand is valued worldwide, thus leading to higher sales of products and services that earn the company 59 billion dollars. The company offers a wide range of products and services with a high market value. Dell became a private company in 2013 and henceforth has experienced a lot of progress, especially with the acquisition of EMC, which is the largest pure record deal of the company in technology at the moment.

Dell Company has been chosen because of the great progress the firm has made in the industry over the years, including its deal with EMC, which has however generated controversies in the current market news. On the one hand, the purchase will see Dell suspend some of its businesses to assist in covering some of the debts that would come. On the other hand, the acquisition will see Dell combine a cluster of small businesses into one enormous company. This will be a major milestone for the company considering that it is a company that was founded by Michael Dell in his small room at the campus. He had an entrepreneurial spirit at that moment: because of this same spirit, he is willing to take risks and expand the company even more. This company has practiced a technological innovation, which has enabled the liberation of helpful resolutions of an array of solutions in computers over the time it has operated. It has also made technology accessible to everyone, considering the fact that its products and services are affordable worldwide. It has also made sure that it technologically catches up with the current generation by developing and designing many innovations to suit the current times, hence producing technologically advanced products that encourage advancements among consumers worldwide.

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Introduction to Dell Company and the Industry

Dell Inc. is a company functioning in the United States of America. It is privately owned and is named after its founder Michael Dell who founded it in the year 1984 in his room at a dormitory in Texas. The history of Dell Industry started at the University of Texas where Michael configured computers from reserve apparatus. He later got a boost of 1,000 dollars from his supportive family in order to expand his business. He dropped out of school, focusing on his business and it did not take long before it experienced its first major success, which was the production of the first computer called the Turbo PC. This development saw the company obtain 795 dollars, which was not bad for starters at that time. After advertisements and sales within the first year of business operation, there was a substantive amount of income adding up to 73 million dollars earned by the company, which was then known as PC’s Limited. The company achieved major growth with the help of Lee Walker and Morton Meyerson who were hired by Michael Dell to help turn the company into a larger one. The very first strategy envisioning an expansion of the company consisted of the makeover of the name to Dell Computer Corporation. With this name as well as offers from the public of a large percentage of shares, there came global attention and growth in the company’s market capitalization. It was hence recognized by the Fortune magazine in 1992 as the world’s top 500 biggest companies and Michael Dell was the youngest CEO of such a company. Much of the growth experienced in the late 1990s and early 2000s came when the company developed an internet site, which skyrocketed its sales. Another reason for success was the fact that the company channeled most of its sales to individuals and families rather than to the user market.

It is a technology company that deals with computers and associated goods and services. It is majorly involved in the business of developing, selling, repairing, and offering support services to computer users among other products. Bearing in mind that it is one of the biggest computer companies in the world, it is, therefore, able to employ thousands of people worldwide. It started as a small company that was selling personal computers only, but now it has developed into a large company that sells servers and data storage devices, as well as network switches, computer software, televisions, printers, cameras, and other electronics from various manufacturing companies. The company has a well-developed supply chain and has made significant strides in supply chain management and in electronic commerce. It has also developed direct-sales services whereby goods are manufactured with an approach of built-to-order. This approach has enabled the company to target the specific needs of customers worldwide in terms of how they would like their personal computers to be designed. Despite having specifically sold computer hardware for in the past, the company has recently ventured into several other businesses, including information technology (IT). This milestone was achieved after the company’s acquisition of Perot Systems in 2009. It has also developed in the areas of storage and networking. All these developments are done in an effort to enlarge its product and service range, hence meeting the demands of various customers.

There has been an increased demand for Dell products because many frequent buyers and clients look for more potent computers, which have numerous accompanying features and operational ease lacking in most systems that were available then. Because of such high demand, the company has been forced to develop better means of reaching its client base effectively and faster than it had been done before. This has been enabled through the development of a company-based transaction and advertising team involved specifically in serving families, as well as the introduction of a product line for personal users. Dell has since had the benefit of steady growth in business, accumulating market shares from rivals even during times when there is a general fall in the computer industry. Some of its competitors have been bought out during such rough business times, while others have quit the business altogether. Even after Hewlett Packard and its rival Compaq merged, they still could not outdo Dell, which experienced its fastest growth earlier on in the 2000s. Dell is recognized as a company that achieved and maintained the leading position worldwide in terms of computer reliability and client-based services until the release of Windows XP.

Kevin Rollins has been fighting for the acquisition of EMC Corporation since 2002 to decrease the company’s dependency on PCs production with not much avail. Even so, the company has since adopted the production of other products, including television sets, audio players, and printers among others. Due to this development in the company, it was renamed as Dell Inc., has noticed changes in its production base, hence engaging in the production of a wider range of products. In 2004, Michael Dell appointed Kevin Rollins as the company’s CEO, a post they held together. The company later acquired Alienware that came with several new introductions to the company’s line of products such as AMD microprocessors, which made the company break ties with Microsoft and Intel companies that had limited it to the manufacture of personal computers and other related businesses. The company’s sales growth reduced in 2005 because the distribution channel the firm had used before was becoming irrelevant in the new market of computers in which a large percentage of buyers came from developing markets. As a result, the firm’s stock lost about 25 percent of its value in that year and experienced more losses in the following year. The reduction in revenue was also occasioned by competition from rival companies such as Acer and Hewlett Packard; Dell lost its relevance in the market place as rival companies manufactured products of similar value in the market, which were more available as compared to Dell’s products. Since then, the firm has registered mixed performances in the market and has gone through many changes in an attempt to recover its market share and set itself on a developmental path again.

Dell’s Logistics/Supply Chain Management

Supply chain management refers to how a firm manages the movement of products from its source to consumers. This process describes how a company obtains raw materials, stores them, processes and/or manufactures them, and sells them to the final consumer. The whole process is sometimes referred to as logistics management. In order for this process to be efficient, firms may need to effectively manage information, finance, and materials, including equipment such that products are made and efficiently delivered to consumers, which is sometimes done through wholesalers and retailers or directly.

For many years, Dell had a unique supply chain as compared to its competitors. As seen earlier, the firm used to make computers for home users who procured them directly from the firm. This was contrary to conventional channels used by its competitors that sold their computers to wholesalers who sold them to retailers before they were sold to final consumers. This channel is sometimes referred to as ‘ direct channel&rsquo. This channel works in a well-developed market when a firm is assured of a continuous demand for its products and that all products made will be purchased fast so that the firm can recover its capital and make a profit. When this is not assured, the firm would like to caution itself against losses in time and money in the channel by using wholesalers and retailers who share a risk relating to the loss of time and make a profit.

Still, when using the direct channel, the firm is almost sure that there is no time gap between production and consumption. Wholesalers and retailers help to bridge the time gap between the time of manufacturing and the time of purchase by the final consumer. In turn, direct channel requires that the firm has a robust presence either in physical or online stores coupled with an efficient distribution network such that the movement of the product between producers and consumers happens at the shortest time possible.

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