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Example Case Study on Dell Computer Corporation

Case Study on Dell

Dell Computer Corporation is the world’s leading computer systems company and a premier provider of computing products and services The Company was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, the Company could best understand customer needs and efficiently provide the most effective computing solutions to meet those needs. The Company is a Delaware corporation that was incorporated in October 1987, succeeding to the business of a predecessor Texas Corporation that was originally incorporated in May 1984. . At this time, in fiscal year 2002 the Company’s revenue was $31.2 billion.

Dell Computer reversed its loss of a year ago in the second quarter as the top computer maker continued to take market share in a flat market. For the three months ended August 2, Dell earned $US501 million on $US8.46 billion in revenue. That compared with a loss of $US101 million, in the year-ago quarter on revenue of $US7.61 billion which incredibly successful while the computer demand is rapidly decreasing.

Competitors is one of the biggest problems that Dell is facing, we can understand it exceedingly by analysis the new product line that Dell is going to introduce to the world; “white-box”, PCs, printers, and handheld devices. Dell recently is making rapid inroads into the enterprise storage market, which is almost as large as the PC market while all the Dell is continuing with its drive into the mid-range server market, where its Windows/Intel offerings compete with Unix-based machines made by traditional vendors IBM, HP and Sun. Throw in Dell’s recent signal that it intends to aggressively pursue HP into the printer business, and hints that networking and handheld PDAs are also on the agenda. All of these are because of worries and solutions to its competitors.

The company’s financial stat is in an extraordinarily good shape. During rapidly decreasing demand in computer industry, Dell still mange profits over its competitors. The Company’s direct business model gives it the ability to operate with reduced levels of component and finished goods inventories. As the result, the Company’s financial success in recent periods has been due in part to its asset management practices, including its ability to achieve rapid inventory turns while its competitors have to spend huge amount of resources to its asset management.

On the agenda for Dell’s July 2002 annual shareholder meeting is a prevision of what Dell Computer has to offer to its shareholders. Dell alone among the largest computer-systems companies is profitably gaining market share, and was able to counter an industry trend last week by raising its guidance for second-quarter revenue and profit growth. This sharp attention to customer requirements, ability to satisfy growing preference for standards-based servers and storage products, and leading efficiency from crisp execution continue to position the company best for value creation today and beyond. While the annual directors¡¦ meeting is still held by the board, the directors are still waiting for the approval of agenda and the meeting dates.

For the first quarter, Dell earned $457 million, compared with $462 million a year earlier. During the same period, revenues increased from $8.03 billion to $8.07 billion. Dell’s future prospects will increase profit in the second quarter if they continuing the cost-cutting efforts and gaining market share. Although the computer industry seen the stabilization to slight strengthening in the business, economic recovery still yet the most important future opportunities they might anticipate. Over all, by executing on Dell’s successful strategy, it was the only PC maker that increased profits, while also gaining market share. Trading at approximately 40 times earnings, Dell’s stock price will certainly not mount a big run, yet it should stay within a trading range until the economy recovers.

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