02-10-2012, 11:16 AM
Dell
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Dell Inc. (NASDAQ: DELL) is an American multinational computer technology corporation based in 1 Dell Way, Round Rock, Texas, United States, that develops, sells and supports computers and related products and services. Bearing the name of its founder, Michael Dell, the company is one of the largest technological corporations in the world, employing more than 103,300 people worldwide.[2] Dell is listed at number 41 in the Fortune 500 list.[3] It is the third largest PC vendor in the world after HP and Lenovo.[4]
Dell has grown by both increasing its customer base and through acquisitions since its inception; notable mergers and acquisitions including Alienware (2006) and Perot Systems (2009). As of 2009, the company sold personal computers, servers, data storage devices, network switches, software, and computer peripherals. Dell also sells HDTVs, cameras, printers, MP3 players and other electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce.
History
Dell traces its origins to 1984, when Michael Dell created PCs Limited while a student at the University of Texas at Austin. The dorm-room headquartered company sold IBM PC-compatible computers built from stock components.[7] Dell dropped out of school in order to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family.
In 1985, the company produced the first computer of its own design, the "Turbo PC", which sold for US$795.[8] PCs Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of operation.
The company changed its name to "Dell Computer Corporation" in 1988 and began expanding globally. In June 1988, Dell's market capitalization grew by $30 million to $80 million from its June 22 initial public offering of 3.5 million shares at $8.50 a share.[9] In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's 500 largest companies, making Michael Dell the youngest CEO of a Fortune 500 company ever.
Missed expectations and return of founder
However in 2005, while earnings and sales grew, sales growth slowed considerably, and the company stock lost 25% of its value that year.
The slowing sales growth has been attributed to the maturing PC market, which constituted 66% of Dell's sales, and analysts suggested that Dell needed to make inroads into non-PC businesses segments such as storage, services and servers. Dell's price advantage was tied to its ultra-lean manufacturing for desktop PCs, however this became less important as the market shifted to laptops, and as rivals such as Hewlett-Packard and Acer made their PC operations more efficient. Throughout the entire PC industry, declines in prices along with commensurate increases in performance meant that Dell had fewer opportunities to upsell to their customers (a lucruative strategy of encouraging buyers to upgrade processor or memory), and as a result the company was selling a greater proportion of inexpensive PCs than before which eroded profit margins.
There has also been a decline in consumers purchasing PCs through the Web or on the phone, as increasing numbers were visiting consumer electronics retail stores. As well, many analysts were looking to innovating companies as the next source of growth in the technology sector. Dell's low spending on R&D relative to its revenue (compared to Apple Inc.) which worked well in the commoditized PC market prevented it from making inroads into more lucrative segments such as MP3 players.[13]
Dell's reputation for poor customer service, since 2002, which was exacerbated as it moved call centres offshore and as its growth outstripped its technical support infrastructure, came under increasing scrutiny on the Web. There was also criticism that it used faulty components for its PCs.[14] There was also a battery recall in August 2006, as a result of a Dell laptop catching fire which caused much negative attention for the company, although later Sony was found to be responsible for the faulty batteries.
Dell facilities
Dell's headquarters is located in Round Rock, Texas.[31] As of 2010 the company employs about 16,000 people in the facility,[32] which has 2,100,000 square feet (200,000 m2) of space.[33] As of 1999 almost half of the general fund of the City of Round Rock originates from sales taxes generated from the Dell headquarters.[34]
Dell previously had its headquarters in the Arboretum complex in northern Austin, Texas.[35][36] In 1989 Dell occupied 127,000 square feet (11,800 m2) in the Arboretum complex.[37] In 1990 Dell had 1,200 employees in its headquarters.[35] In 1993 Dell submitted a document to Round Rock officials, titled "Dell Computer Corporate Headquarters, Round Rock, Texas, May 1993 Schematic Design." Despite the filing, during that year the company said that it was not going to move its headquarters.[38] In 1994 Dell announced that it was moving most of its employees out of the Arboretum, but that it was going to continue to occupy the top floor of the Arboretum and that the company's official headquarters address would continue to be the Arboretum. The top floor continued to hold Dell's board room, demonstration center, and visitor meeting room. Less than one month prior to August 29, 1994, Dell moved 1,100 customer support and telephone sales employees to Round Rock.[39] Dell's lease in the Arboretum had been scheduled to expire in 1994.