The Rise of Dell Computers essays

The Rise of Dell Computers essays 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 PC manufacturing 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 Dell Computer sometimes struggled during its early years in trying to refine its strategy, build an adequate infrastructure, and establish market credibility against better-known rivals, its build-to-order and sell-direct approach proved appealing to growing numbers of customers in the mid-1990s as global PC sales rose to record levels. And, just as important, the strategy gave the company a substantial cost and profit margin advantage over rivals that manufactured PCs in volume and kept their distribu tors and retailers stocked with ample inventories. Going into 1998, Dell Computer had a 12 percent share of the PC market in the United States, trailing only Compaq Computer and IBM, which held first and second place in the market, respectively. Worldwide, Dell Computer had nearly a 6 percent market share. The company was gaining market share quickly in all of the world's markets. The company's fastest growing market for the past several quarters was Europe. Even though Asia's economic woes in the first quarter of 1998 resulted in a slight decline in Asian sales of PCs, Dell's sales in Asia rose 35 percent. Dell's sales at its Internet Web site was averaging $5 million a day and was expected to reach $1.5 billion annually by year-end 1998. Since 1990, the company's stock price had exploded from a split-adjusted price of 23 cents per share to $83 per share in May 1998. Dell Computer was the top-performing big company stock so far during...