Dell Case Study and Solution

1450 Words Sep 30th, 2011 6 Pages
Case Study of Dell : Inspiring the leadership
In 1984, at the age of 19, Michael Dell founded Dell Computer with a simple vision and business concept—that personal computers could be built to order and sold directly to customers. Michael Dell believed his approach to the PC business had two advantages: (1) bypassing distributors and retail dealers eliminated the markups of resellers and
(2) building to order greatly reduced the costs and risks associated with carrying large stocks of parts, components, and finished goods. While the company sometimes struggled during the 1986-1993 period trying to refine its strategy, build an adequate infrastructure, and establish market credibility against better-known rivals, Dell’s strategy
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Dell had overtaken Compaq as the global market leader in 2001. But when HP, the third ranking PC seller in the world, acquired Compaq, the second-ranking PC vendor, Dell found itself in a tight battle with HP for the top spot globally.
Since the late 1990s, Dell had also been driving for industry leadership in servers. In 2002 Dell was the No.1 domestic seller of entry-level servers and high performance workstations (used for applications with demanding graphics). It was No. 2 in the world in server shipments and in striking distance of taking over the global market lead. In the mid- and late-1990s, a big fraction of the servers sold were proprietary machines running on customized Unix operating systems and carrying price tags ranging from $30,000 to $1 million or more. But a seismic shift in server technology, coupled with growing cost-consciousness on the part of server users, produced a radically new server market during 1999-2002. In 2003 about 8 out of 10 servers sold were expected to carry prices tags below $10,000 and to run on either Windows or the free Linux operating system rather than more costly Unix systems. The overall share of Unix-based servers shipped in 2003 was expected to be about 10 percent, down from about 18 percent in 1997. Dell’s domestic and

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