Hope Vinson

October 25, 2001

BUS 480

Dell Computer Case Analysis

Problem

In 1983 Michael Dell enrolled at the University of Texas and soon after began selling PC components out of his dorm room.  A year later he dropped out of school to form his own company called PCs Ltd.  During the next several years, PCs Ltd. was hampered by a lack of money, people, and resources.  So Michael Dell refined the business model, added production capacity, and built a bigger management staff while keeping his costs low.  The company was renamed Dell Computer in 1987.  Michael dell’s vision was for Dell Computer to become one of the top three PC companies in the world.  He would try to achieve this by making personal computers that could be built to order and sold directly to customers.

Michael Dell

Michael Dell was labeled “the quintessential American entrepreneur” and “the most innovative guy for marketing computers in this decade.”  He was the youngest CEO to guide a company to a Fortune 500 ranking.  Dell can be described as shy, egotistical, and a terrible public speaker.  Fortunately, under Lee Walker, Dell COO 1986-1990, Michael Dell became familiar with all parts of business, overcame his shyness, learned to control his ego, and turned into a charismatic leader.

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Objectives

The main objective of Dell Computer can be best described by Michael Dell himself: “My vision for the Dell community is to become the best in all things we do.  And the best, not just in our industry, but across all companies”.  Another objective of Dell Computer is maintain and increase their competitive advantage.  They want to maintain a low cost position to maximize the value passed on to our customers, while driving costs lower and lower.  They also want to drive aggressive pricing and profitability gain share.  Dell wants to always put customers first and remain aggressive about ...

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