infosys
November 8, 2006
COMPANY PROFILE (OCT 7-13) : DELL INC.
October 13, 2006
COMPANY PROFILE - DELL INC.
Dell Inc., an American computer-hardware company based in Round Rock, Texas, develops, manufactures, sells and supports a wide range of Personal Computers, Servers, Data storage devices, network switches, Personal digital assistants (PDA’s), software, computer peripherals, and more. As of 2006, Dell employs more than 63,700 people worldwide and manufactures more computers than any other organization in the world. According to the Forbes 500 2005 list, Dell ranks as the 28th largest company in the United States by revenue. In 2006, Fortune magazine ranked Dell as No.8 on its annual list of the most-admired companies in the United States.
How the Journey began…
Michael Dell, while still a student at the University of Texas at Austin in 1984, founded the company as PC’s Limited with just $1000. From his on-campus dorm room atJester Center, the start-up aimed to sell IBM-compatible computers built from stock components. Michael Dell started trading in the belief that by selling personal computer systems directly to the customers, PC’s Limited could best understand customer’s needs and provide the most effective computing solutions to meet those needs.
In 1985, the company produced the first computer of its own design (the “Turbo PC”), which contained an Intel 8088 – compatible processor running at a speed of 8 MHz. It advertised the systems in national computer magazines for sale directly to the consumers, and custom – assembled each ordered unit according to a selection of options. This offered buyer’s prices lower than those of retail brands, but with greater convenience than assembling the components themselves. Although not the first company to use this model, PC’s Limited became one of the first to succeed with it. The company grossed more than $6 million in its first year.
Business Model
Dell sells all its products both to consumers & corporate customers, using a direct-sales model via the Internet and the Telephone network. Dell maintains a negative cash conversion cycle through use of this model: in other words, Dell Inc. receives payment for the products before it has to pay for the materials. The Internet has significantly enhanced Dell’s business model, making it easier for customers to contact Dell directly. Other computer manufacturers, including Gateway and Compaq, have attempted to adapt this same business model, but due to timing and/or retail-channel pressures they have not achieved the same results as Dell.
Quick Financial Synopsis
For the twenty six weeks ended 4 August 2006, Dell Inc.’s revenues increased 6% to $28.31Billion. Net income decreased 35% to $1.26B. Revenues reflect an increase in demand for Company’s products & services. Net income was offset by higher cost of revenue, an increase in selling, general and administrative expenses, higher research and development expenses and a decrease in net investment and other income.
