Dell Inc. Case Study

Danielle Kershaw

Week 3

Dell Inc. Case Study

Synopsis

Dell was founded in 1984 by Michael Dell when he was only 19 years old. At the time he was student at the University of Texas. He left college after his freshman year to run his fledgling business. His leading vision was to build PC’s to order and sell them directly to the consumer. They started with tremendous growth and today are still a leading brand of PC’s.

Resources

Dell employed several different resources. He originally started marketing his computers in local newspaper ads. Later on Dell included their own catalog of products, as well as using field sales. In 1996, Dell also established their own website, Dell.com. This was in addition to direct mail and telephone sales strategies. Dell established their own brand by making their computers to order.

 Due to this they were able to keep overhead costs down, due to the fact that they were paid by consumers first, then they produced the customized computer and then finally ship it to the consumer. They were not sitting on unused inventory. The low cost yet high quality of the product is the start of the success of Dell. Consumers were able to customize the computer that they needed rather than just pick up a standard one.

Another recourse that Dell used was standardized technology. Rather than develop their own technology or invest in the latest tech available, Dell instead waited until the technology was standardized, thus driving the cost down and in turn Dell paid less for it. They also used their own assembly lines in many different countries.

In 2007, Dell once again used direct sales to sell their products in several big chain stores such as Wal-Mart, in order to sell to the public and keep their name out there. They have diversified to continue growing. They are no longer only selling PC’s, but also items such as servers, printers and software.

Capabilities

Dell is able to sell its product worldwide. The sell not only PC’s, and laptops but also hardware and service support. They offer distribution options of computer sales as well as retail sales. The consumer can customize the product that they need and order directly from Dell on Dell.com. They also have the option of being able to go to different chain stores and make their purchase face to face. This helped when sales were based on recommendation of sales staff.

 Core Competencies

Some core competencies that Dell has shown is a visionary success. Michael Dell started the company with $1000 and a personal loan. Today the company has nearly $50 billion in revenue. Dell has been able to maintain lost cost while still offering a quality product. As well as selling PC’s and laptops they added on new services and products to appeal to consumers as well as support systems for increase customer service. Dell is able to provide standardized technology in their products which keeps costs down for consumers.