INTRODUCTION

HISTORY OF DELL

You don't ever really know whether you have come up with the right plan until much later...When it either works or it doesn't. What is the right plan? It is the one that helps you identify what you need to to ensure success. It is the one that rallies your employees around a few common goal and motivates them to achieve them. It is the one that involves your customers' goals and your suppliers' goals and bring them altogether in a unified focus. 

-Michael DELL

Dell Computer Company was founded by Michael Dell in 1984 and now it is one of the leader in the personal computer industry through aggressive risk taking and cost lowering strategies. Michael Dell, the founder of Dell Computer, began his venture in 1980. Michael Dell's first computer purchased was Apple II. A year after, in 1981, IBM introduced the personal computer (PC). Michael Dell, saw this new product as a business option and he switched from Apple to IBM PC and began to learn all components. 

In 1983, Michael Dell, 18 years old college student at University of Texas, spent his evening pre-formatting hard disks for IBM compatible PC upgrades. In 1984, Michael Dell started a new computer company with $1000. Michael Dell's mission was to be the most successful computer company at delivering the best customer experience in markets. So he would meet some customer expectations such as highest quality, leading technology, competitive prices, flexible customization capability, best service and support, individual and company accountability, financial stability and superior corporate citizenship.

His cool new idea was to sell personal computers (PCs) directly to consumers from lower prices but offering limited customer support. 

STRATEGY 

Dell's differentiation strategy is based on some core elements: direct to the customer, built to order manufacturing which includes desktops, workstations, network servers and laptops, mass customization, just in time components inventories, partnership with suppliers, direct sales, market segmentation, customer service and data & information sharing with both supply partners and customers. Dell also offers a wide range of optional peripherals like monitors, cable, modems, video, and  data storage.  Dell is the leader in direct sales of computers. The idea behind selling computers directly to customers was to better understanding of consumers needs and to provide the most compelling solutions to meet those consumer's needs. According to Michael Dell, PC business had two advantages; first advantage is carrying a large stocks of parts and components and finished goods reduces the costs and risks. And the second advantage is bypassing retail dealers and distributors, selling computers directly to customers help company to eliminate unnecessary time and cost.