Marketing Environment

Dells strategy is global. It realizes that being closer to the customers is

essential in carrying out its marketing strategies as well as in enabling it to
build customer base. First by establishing the Internet infrastructure for
booking/orders related activities it has been able to increased its customer
base from existing markets. Using the same infrastructure it has been able
to carry out its marketing strategies in new offices as well. However, Dell
differentiate in its marketing tactics in that it believes in establishing a
brick and mortar market presence. This is why the company has
established sales offices and manufacturing outlets across North America,
Europe, Asia and South America. This way it has been able to gauge the
local customers needs as well as services desired.
Apart from the above customer level niche marketing, Dell also believes in
reducing competition through collaboration. Unlike other leaders in the
industry such
as HP and Compaq, Dell does not believe in taking over existing
competitors to eliminate competition. Instead the company have always
pride itself in using partnerships and associations for integrated marketing.
For example Xeroxs addition to the company as a partner for providing
printing products and services has served the purpose of integrating one
more technology to its lists of comprehensive business services. As James
Vanderslice, Vice Chairman of Dell says:By adding Xerox to our roster of
preferred printing partners, we are even better equipped to serve our
customers with a full range of office printing technologies that provide
end-to-end solutions. The Xerox brand is synonymous with quality,
technology leadership and world-class services. We share these core
values. (Dell and Xerox Forge Strategic Marketing Tie).
Not only Dell believes in industry wide collaboration but also in global
collaboration. It has based offices in different countries of the world as
strategic plan due to the fact that it would be able to reach the niche
market effectively. By breaking the dominance or monopoly of other
computer companies, Dell would be able to capture the market by
providing products and services at competitive pricing strategies.

SWOT Analysis
Strenths: Dells dynamic organizational structure allows it to achieve
diversified targets. By allowing the components to directly become
integrated in the manufacturing process of Dell, it has been able to reduce
middle channel costs. These components, such as OEMs, CMs, logistics,
system integrators, repair and support companies, component suppliers,
third party HW and SW suppliers and distributors have become each of the
companys manufacturing processes so that ease of provision to the
customers is possible. This reverse organizational process structure differ
from other industry leaders. Weaknesses: Within the strengths lies Dells
weaknesses. Much of its strategies have to rely on the capacity and
capability of these manufacturing components. Continuous updates and
process improvement is required so that they can keep up with Dells pace
of development.
Opportunities: Having established an integrative and virtual network,
Dell has been able to achieve the high level of corporate outcome that
challenged most of the industry leaders. The established value web
corporate model have also allow Dell to have global wide access to
customers and market. Reaching any niche market in any continent is
therefore not a problem for Dells marketers. Threats: However, due to
the integration of components in Dells organization structure, Dell
compete not only compete at the final product level but also at the
suppliers level. Third party software for example have great competition
for price and product categorization which could eventually affect Dells
position in the market.
Marketing Strategy
Product: Dells unique approach to manufacturing separates the different
processes so that Dell is not reliant on singular production or suppliers
chain for equipment production. Though there is no segregation of the
different products and services but nevertheless in separating the
components enabled it to target the customers based on the regions in
which the products are manufactured. By assingning each regionalized
production center particular component for production not only have

diversified the risk of concentration of labor and production costs but also
depending on particular infrastructure.
Price: Dells product pricing reflect the affordability of the local
consumers. For example basing plants in Xiamen, China Dell has been able
to provide products and services at the local prices without incurring
additional costs to price. Price reasonability and the availability of support,
after sales services and parts have alleviate Dells position from others.
Place: Dell has been able to affect the location strategy aspect of its
marketing campaign. As Dells products are always available at the
nearest dealers customers develop trust for the local Dell thereby
achieving the objective of gaining their trust in Dell products and services,
and forming a large and diversified consumer base.
Promotion: Dell in the past have not concentrated on extensive
marketing campaigns but this revolutionarized in 1999 when Dell changed
its tactics by engaging in
extensive marketing campaigns. The Be Direct attitude has changed the
way consumer view Dell as the local producers.
Sales promotion
1Broken down market
Dell computer companies will be in accordance with the product range of
its products, respectively, in different areas of application or market
classification classification, a different strategy.
2Pricing strategy
Through direct sales, Dell than in the other major manufacturers of low
cost 100 to 200 U.S. dollars, which use low-cost marketing strategy.
3Advertising strategy
Advertising in Dell website, but no. Dell website contains a wide range of
multimedia pictures, and many more performance charts, and even made

some advertising in the form of slides. These customers can purchase fully
stimulate desire.
Distribution channels
Direct modes in compressed product production lines, supplemented by
online purchase at great development of its direct sales model.
Customer Service
1Online orders, and by a single production
Dell companies to enable customers to purchase computer Dell.com and
PremierDell.com for enterprise customers, the company has provided
more than 60,000 customized web site to allow customers to track orders
for the purchase and implementation. Valuechain.dell.com orders through
direct transmission to the supplier of raw materials Dell companies, such
suppliers will be able to receive real-time information on raw materials,
thus contributing to Dell companies control inventory.
2Video distribution and delivery guarantee
Dell particularly unique is that the company provided a special specialized
services : network users can choose in accordance with their own
preferences and needs of the computer, the company provides distribution
of the final outcome of the
hardware, and system performance forecasts. As a result, the network of
shops in the best possible selection, Dell sites in the forefront in computer
networks. Dell customers at the center of the customer requirements for
different customers different custom, personalized products. In all
customers choice, the website also provides the corresponding price,
payment method and delivery address and the identification and door-todoor in two days.
3Online technical services and technical support
Dell companies provide online services and technical support is very
broad, users answer questions, the escalation on Windows, software

upgrades informed, and so on. A wide range of services not only to

increase the intrinsic value of their products, can also be user satisfaction,
and enhance the competitiveness of our products.
4Online forums , help and Search services
Not only large customers, small enterprises, a large number of persons
were also attract home office in Dell brands around. From the autumn of
1998, Dell established executives and customers online forum had
breakfast with Dell extended to small business users, the topic of this live
chat server market trend not only includes such large topics, but also for
general users the opportunity to make a wide variety of issues, then
adopted Dell online knowledge base in artificial intelligence software to
help automatically answered.
Dell also provides comprehensive search services. A user-friendly search
service can find their desired product and technical support. The scope is
very wide search, the search is on the hardware, but also software for the
search; Both assembled whole sets of search; There are various parts of
the search, and so on.
5Orders enquiry and Purchase logistics and delivery logistics
Customers only in the number of Internet customers of six figures or
purchase orders numbers, a few minutes, will receive a detailed report on
the progress of orders.Delivery logistics, the same achieved its online
electronic payment, customers trolleys and transport management, etc.
functions. Purchase of logistics enterprise-enterprise e-business, not
reflected in the website, presumably in the companys internal network will
be involved.

Dell India announces its new go-to-market strategy

Dell recently announced its new go-to-market (GTM) strategy for the India
market with the aim to tap more enterprise customers with its solutions
portfolio. This move has come after Dell global became a privately held
company last October and expanded its focus more on the solutions space
and not just personal computing (PC) devices.
End-to-End Solutions provider
Its our global stated strategy that we would like to be a leading solutions
provider in the end-to-end scalable solutions space and we are doing whole
lot of things aligning our solutions, resources and investments to get
there, said Alok Ohrie, President & Managing Director Dell India, during the
recently concluded Dell India Executive Summit in Dubai.
According to Ohrie, the new GTM plan is linked with the transformation that
Dell has under gone over last few years right from the time when Michael
Dell took the charge as CEO in 2007, acquiring software companies, building
a solutions stake to all the way being a private company now.
Privitisation has actually, accelerated the execution pace on being aligned
with companys goals and strategy. And has given us the flexibility,
nimbleness and brought back that spirit of entrepreneurship, added Ohrie.
New GTM strategy
With the new GTM, company changed its routes-to-market (RTM) with a
strong focus on customer engagement and wider reach. Unlike, direct
approach in the past, Dell India has come up with three RTM that includes
Dell Led for direct sales engagement, Partner Led for business accounts with
special pricing and products; and Distribution Led for consumer IT products .
Mostly, company was directly serving some 40,000-50,000 customers in the
past 6-8 years; but now about 30,000 accounts are expected to get shifted
from direct to channel model by this year end. Large enterprises, small and
mid size businesses, government organisations, public sector undertaking
(PSUs) and consumers are among the Dells customer base in India.
Collaborative approach
Now, Dell India is collaborating with channel partners and distributors to take
its solutions and technology products to customers in remote areas. It wants
to leverage their relationships and engagements with existing customers as
well as their technology skills and knowledge.
The advantage and benefits of this new GTM are improvements in coverage
and reach, better engagement with partners, getting closer to customers and
being accountable where it counts, Ohrie, explained, how three RTM will
help Dell to expand the customer reach in India.
Advantage and benefits
Dell has a huge presence in India with over 27000 workforce staff. Its the
biggest site presence outside of the US and makes lot of contribution to the
corporation from domestic market as well as from global operations point,
stressed Ohrie.

Company has invested some $30 million in manufacturing facility at

Sriperumbudur near Chennai, spread over 100 acre land with three advance
manufacturing lines for making PCs, servers and notebooks. It caters to the
domestic consumption as well as export to countries and markets like Middle
East and Africa. We have started seeing the ramp up in terms of volumes,
which is allowing us to take advantage of this existing setup here, added
Ohrie.
Early market gains
According to Ohri, companys new GTM has got positive market response and
during last 6 months, about 250 conversations have happened on the cloud
fronts private, public and hybrid all kinds of combination.
About 84 conversations had been on application modernisation, which is the
area where we can add more value as we do not have any legacy to protect.
On security side, we had 60 conversations. In H12014, our server business
grew 44% higher than the market, storage 15%, networking 20% and
software 25%. So we definitely are seeing our value proposition and its
resonating well with customers in the market, concluded Ohri.
- See more at: http://computer.financialexpress.com/news/dell-indiaannounces-its-new-go-to-market-strategy/3765/#sthash.vTAL3neF.dpuf

Dell Marketing Strategy

Appropriate marketing strategy are needed to reach potential customer.

Different type of customer need different type of marketing strategy. There
are different type of marketing strategy that can be implement to final
consumer & households or corporate buyers.
Appropriate marketing strategy is needed to reach final consumers or
households. Basically, this type of customer buy product and services in the
category of nice-to-have, and often to improve their quality of life. Individual
consumer buys product and services for his or her own use, they are free to
make purchasing decisions based on instinct, whim, or gut feeling. There are
also other method to reach potential final consumers and households ;
1. Demonstrate Value
Actions speak louder than words. If you want clients to be aware of the value
of your products or services, you will need to give them a test drive. Open

the door with newsletters, workshops, a free session or articles found on your
web site. Over time demonstrating the value you provide will convince
prospective clients of your ability to solve their problems and help position
you as a trusted advisor.
2. Build Your Network
The objective is to know who is interested in your products and services.
Networking is a good idea because people like to buy products from people
they know and trust. If theyve met you or been referred to you they are
more likely to trust you. Depending on the business you are in, you can build
your network of prospects through conventional networking or through your
web site and email. Either way the more qualified prospects you have in your
network the better.
3. Stay in Touch
Memories are short. Once we hit middle age most of us can't remember the
host of services various firms provide. In most cases its safe to assume
your target market has forgotten about the range of solutions you offer, if
they remember you at all. Stay in touch with your target market on a
monthly or, at a minimum quarterly basis. When you contact people be clear
about the action you want prospective, existing and past clients to take.

In the other hand, the appropriate marketing strategy to reach corporate

buyers are different. This is because corporate buyers involving large
contracts, larger compared with small businesses and individuals, and often
longer-term. There are other methods can be use to reach corporate buyers;
1. Understand the culture of the corporate organization. Normally managers
are busy. Busy people attempt to ignore unexpected email and letters, and
there is big possibility they will not return the phone calls. This also may
happen even when the deal are in the final stages, the potential buyers may
not return the calls for weeks. This situation need to be accepted as normal
behavior instead of obsessing about how yourself may have caused it,this
will avoid the feeling of stress and furthermore there is nothing necessary to
be worry about. It is important to understand the corporate people in
attempt to get their attention and this will make them more interested to
know about what kind of product that they will be offer.

2. In attempt to capture the interest of the busy potential buyer, it is better

to tell them exactly how the product or service offer to the actually can help
them. Make it simple but compact with necessary information that they
maybe interested to know. Avoid calling them for just to introduce yourself,
because it will not get their attention. Ask the potential buyer in the target
market what is their greatest problems they face or what is the biggest goals
they wish to achieve. Ask these questions to the people which in attempt to
capture their interest and the other business people who serve them.
3. Every choice must be justified. When you sell to the owner of a small
business or to an individual for his or her own use, your buyer is free to make
purchasing decisions based on instinct, whim, or gut feeling. But every
corporate sale must be justified to someone else in the organization. A
supervisor must justify choices to a manager, the manager to an executive,
the executive to the CEO, the CEO to the board, the board to the
shareholders. Each one of these people wants to look good to the next link
up the chain, and dreads making a public mistake. If you want your sale to
go through, you need to provide your contact with evidence why you and
your solution are the best choice.
4. When you provide your evidence, it had better include dollars and cents of
the price of your product or your service. If you are more expensive than
your competition, explain to your potential buyer what added value will you
provide. If hiring you will cost more than solving the company's problem in
some other way, tell them the tangible benefits will they receive that make
the added expense worthwhile. Corporations, especially in lean times, not
interested to buy service or product because of the product is nice-to-have,
or able to improve their quality of life or that of their employees.. You must
sell them something they actually need and prove how it will enhance their
bottom line. Real-life examples of results at other companies can speak
volumes. Illustrations with charts and graphs are more convincing than any
brochure.
5. No budget; no project. Even when the company needs what you have and
thinks you're the best one for the job, the deal won't go through if there's no
money in the budget. You can ask your contact to try for a budget variance,
but no budget usually means your project will be deferred until the next
fiscal year. Always ask if the client has a budget at the first meeting. Don't
necessarily expect them to tell you how much it is -- price negotiations will
come later. But if your contact can't answer budget questions, it's also a
strong clue you are not talking to the decision-maker.

Do some product categories fit direct sales model better than others?
Yes. Some product categories is fit direct sales better than others. It is
because by selling directly to customers, skipping the middleman and it will
constantly pushing prices down. When price of the product decrease, the
demand for the product will increase.

Dell's CMO Reveals Plan For Success As A Private Company (forebs)

Dell efforts to become a private company were recently completed in order
to have the flexibility to focus on its future without quarterly pressures
from Wall Street. With continued declines in the PC market, there have been
many questions about how Dell can grow revenues and profits. As the
companys communications leader during the original IPO, I was curious how
things would change now that the company was private again. So last week I
had a conversation with Karen Quintos, Dells CMO, to get her insights into
the companys future marketing strategy.
Ellett: I was just reminiscing about being at Dell and taking the company
public. And now youre doing just the opposite.
Quintos: Yes. Its actually been a pretty interesting nine months in terms of
keeping customers and employees focused on the truth. But now that the
votes passed, weve opened up a whole new chapter. Its incredibly exciting,
liberating, and we can already see how its allowed us to focus on the longer
term. From a marketing perspective, its great to finally have the opportunity
to go out and tell our story and talk about all of the great things that were
doing.
Ellett: One of the things that startups do that scare a lot of big companies is
that they focus on capitalizing on opportunities larger companies cant take
advantage of. As the worlds biggest start up whats the opportunity you
see that youre now better positioned to attack as a private company?
Quintos: One is doubling down on the maniacal focus that we have on the
customer. A second is being able pick a couple of places and really leverage
what we want to do globally. Were still heavily invested in the PC, the tablet

market, emerging markets and sales coverage. All of that is consistent and
something that in a go-private opportunity well be able to continue to focus
on.
From a marketing perspective Ill tell you two areas where we see significant
opportunity. One is our next phase of the Dell brand. As a matter of fact, well
be showcasing it at Dell World (week of December 9). Its going to highlight
our heritage and what has made Dell successful from the perspective of
enabling other great companies to achieve their full potential. So well be
bringing in stories of other great entrepreneurial brands that have gone from
this kind of startup idea to becoming big, powerful global brands, all with this
notion of technology at the core. Stories that are similar to the Dell story.
And second, were doing a lot of interesting things leveraging new
techniques, such asIdea Storm and Crowd Sourcing, and new techniques in
social media, to figure out how to quickly garner the best and the brightest
ideas at Dell. And figure out which one of those we want to launch.
Ellett: As part of this going private youve also restructured the company.
How is that going to affect marketing?
Quintos: Ive taken on some additional responsibilities around sales training
and sales enablement. Previously that organization was supported out of our
sales operations team. One of the things that we heard loud and clear from
our sales leaders is, If we take all of this messaging into the marketplace we
need to integrate it end to end. So by bringing that into the marketing
organization it allows us to take what we do from a marketing messaging and
sales enablement perspective and link it from marketing all the way through
to our sales teams and then, ultimately, to our customers.
Another aspect and I dont know that a whole lot of people fully appreciate
this is the great asset that we have invested in over the last several years
called the Dell Solution Centers. We have 13 of them around the world and
were opening two more over the course of the next couple of months. They
are technical centers where our customers can come in and they can go
deep in all areas of our technology around storage, around networking,
around Cloud, around security.

Ellett: Youve talked about a variety of the capabilities youve acquired over
the last 10 years: software services, security, Cloud-related products. Going
forward whats the story that unifies all of those disparate assets?
Quintos: We really believe that we have the capability to provide our
customers with end-to-end, scalable, integrated solutions, from the device to
the datacenter to the Cloud. Its not any more complicated than that. We
believe in this notion of agile, flexible, scalable solutions.
Weve invested a lot in open non-proprietary solutions that well scale with
customers needs. We think thats a clear differentiator for Dell. A lot of our
competitors launch big complicated solutions that they then expect to scale
down to the meet the needs of their mid-market customers.
While we have solutions that certainly work in that space we fundamentally
believe in a design point that enables our customers to use our solutions to
scale with their needs. And by having assets that include the client, the PC,
the tablet, infrastructure, software, security, all of that, were uniquely
positioned to design solutions that are integrated, scalable, and will suit all
size customers.
Ellett: It sounds like a compelling enterprise story. Whats the role of the
consumer market going forward?
Dell Inc. is an American privately owned multinational computer technology
company based in Round Rock, Texas, United States, that develops, sells,
repairs, 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.[3]
Dell sells personal computers (PCs), servers, data storage devices, network
switches, software, computer peripherals, HDTVs, cameras, printers, MP3
players, and electronics built by other manufacturers. The company is well
known for its innovations insupply chain management and electronic
commerce, particularly its direct-sales model and its "build-to-order" or
"configure to order" approach to manufacturingdelivering individual PCs
configured to customer specifications.[4][5] Dell was a pure hardware vendor
for much of its existence, but with the acquisition in 2009 of Perot Systems,
Dell entered the market for IT services. The company has since made

additional acquisitions in storage and networking systems, with the aim of

expanding their portfolio from offering computers only to delivering complete
solutions for enterprise customers.[6][7]
Dell was listed at number 51 in the Fortune 500 list, until 2014.[8] After going
private in 2013, the newly confidential nature of its financial information
prevents the company from being ranked by Fortune. In 2014 it was the third
largest PC vendor in the worldafter Lenovo and HP.[9] Dell is currently the #1
shipper of PC monitors in the world.[10] Dell is the sixth largest company in
Texas by total revenue, according to Fortune magazine.[11] It is the second
largest non-oil company in Texas behind AT&T and the largest company in
the Greater Austin area.[12] It was a publicly traded company (NASDAQ:
DELL), as well as a component of the NASDAQ-100 and S&P 500, until it was
taken private in a leveraged buyout which closed on October 30, 2013.
Dell traces its origins to 1984, when Michael Dell created Dell Computer
Corporation, which at the time did business as PC's Limited,[13][14] while a
student of the University of Texas at Austin. The dorm-room headquartered
company sold IBM PC-compatible computers built from stock components.
[15]
Dell dropped out of school to focus full-time on his fledgling business,
after getting $1,000 in expansion-capital from his family. In 1985, the
company produced the first computer of its own design, the Turbo PC, which
sold for $795.[16] PC's 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.
In 1986, Michael Dell brought in Lee Walker, a 51-year-old venture capitalist,
as president and chief operating officer, to serve as Michael's mentor and
implement Michael's ideas for growing the company. Walker was also
instrumental in recruiting members to the board of directors when the
company went public in 1988. Walker retired in 1990 due to health, and
Michael Dell hired Morton Meyerson, former CEO and president of Electronic
Data Systems to transform the company from a fast-growing medium-sized
firm into a billion-dollar enterprise.[17]
The company dropped the PCs Limited name in 1987 to become Dell
Computer Corporation 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.[18] 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.[19]
In 1993, to complement its own direct sales channel, Dell planned to sell PCs
at big-box retail outlets such as Wal-Mart, which would have brought in an
additional $125 million in annual revenue. However, Bain consultant Kevin
Rollins persuaded Michael Dell to pull out of these deals, believing they
would be money losers in the long run.[20] Indeed, margins at retail were thin
at best and Dell left the reseller channel in 1994.[21] Rollins would soon join
Dell full-time and eventually become the company President and CEO.
Growth in 1990s and early 2000s[edit]
Originally, Dell did not emphasize the consumer market, due to the higher
costs and unacceptably low profit margins in selling to individuals and
households; however, this changed when the companys Internet site took
off in 1996 and 1997. While the industrys average selling price to individuals
was going down, Dells was going up, as second- and third-time computer
buyers who wanted powerful computers with multiple features and did not
need much technical support were choosing Dell. Dell found an opportunity
among PC-savvy individuals who liked the convenience of buying direct,
customizing their PC to their means, and having it delivered in days. In early
1997, Dell created an internal sales and marketing group dedicated to
serving the home market and introduced a product line designed especially
for individual users.[21]
From 1997 to 2004, Dell enjoyed steady growth and it gained market share
from competitors even during industry slumps. During the same period, rival
PC vendors such asCompaq, Gateway, IBM, Packard Bell, and AST
Research would struggle and eventually leave the market or get bought out.
[22]
Dell surpassed Compaq to become the largest PC manufacturer in 1999.
Operating costs made up only 10 percent of Dell's $35 billion in revenue in
2002, compared with 21 percent of revenue at Hewlett-Packard, 25 percent
at Gateway, and 46 percent at Cisco.[23] In 2002, when Compaq merged
with Hewlett Packard (the fourth-place PC maker), the newly combined
Hewlett Packard took the top spot but struggled and Dell soon regained its
lead. Dell grew the fastest in the early 2000s.[4]
Dell attained and maintained the number 1 rating in PC reliability and
customer service/technical support, according to Consumer Reports, year

after year, during the mid-to-late 90s through 2001 right before Windows
XP was released.
In 1996, Dell began selling computers through its website.
In the mid-1990s, Dell expanded beyond desktop computers and laptops by
selling servers, starting with low-end servers. The major three providers of
servers at the time were IBM, Hewlett Packard, and Compaq, many of which
were based on proprietary technology, such as IBM's Power4 microprocessors
or various proprietary versions of the Unix operating system. Dell's new
PowerEdge servers did not require a major investment in proprietary
technologies, as they ran Microsoft Windows NT on Intel chips, and could be
built cheaper than its competitors.[24] Consequently, Dell's enterprise
revenues, almost nonexistent in 1994, accounted for 13 percent of the
company's total intake by 1998. Three years later, Dell passed Compaq as
the top provider of Intel-based servers, with 31 percent of the market. Dell's
first acquisition occurred in 1999 with the purchase of ConvergeNet
Technologies for $332 million, after Dell had failed to develop an enterprise
storage system in-house; however ConvergeNet's elegant but complex
technology did not fit in with Dell's commodity-producer business model,
forcing Dell to write down the entire value of the acquisition.[23]
In 2002, Dell expanded its product line to include televisions, handhelds,
digital audio players, and printers. Chairman and CEO Michael Dell, however,
had repeatedly blocked President and COO Kevin Rollins's attempt to lessen
the company's heavy dependency on PCs, which Rollins wanted to fix by
acquiring EMC Corporation.[25]
In 2003, the company was rebranded as simply "Dell Inc." to recognize the
company's expansion beyond computers.[26]
In 2004, Michael Dell resigned as CEO while retaining the position of
Chairman,[27] handing the CEO title to Kevin Rollins, who had been President
and COO since 2001. Despite no longer holding the CEO title, Dell essentially
acted as a de facto co-CEO with Rollins.[25]
Under Rollins, Dell began to loosen its ties to Microsoft and Intel, the two
companies responsible for Dell's dominance in the PC business. During that
time, Dell acquiredAlienware,[28] which introduced several new items to Dell
products, including AMD microprocessors. To prevent cross-market products,

Dell continues to run Alienware as a separate entity, but still a wholly owned
subsidiary.
Disappointments[edit]
In 2005, while earnings and sales continued to rise, sales growth slowed
considerably, and the company stock lost 25% of its value that year.[29] By
June 2006, the stock traded around $25 USD which was 40% down from July
2005the high-water mark of the company in the post-dotcom era.[30][31]
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,[32] however this became less important as
savings became harder to find inside the company's supply chain, and as
competitors such as Hewlett-Packard and Acer made their PC manufacturing
operations more efficient to match Dell, weakening Dell's traditional price
differentiation.[33] 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 lucrative strategy of
encouraging buyers to upgrade the processor or memory). As a result, the
company was selling a greater proportion of inexpensive PCs than before,
which eroded profit margins.[22] The laptop segment had become the fastestgrowing of the PC market, but Dell produced low-cost notebooks in China like
other PC manufacturers which eliminated Dell's manufacturing cost
advantages, plus Dell's reliance on Internet sales meant that it missed out on
growing notebook sales in big box stores.[3][30] CNET has suggested that Dell
was getting trapped in the increasing commoditization of high volume low
margin computers, which prevented it from offering more exciting devices
that consumers demanded.[32]
Despite plans of expanding into other global regions and product segments,
Dell was heavily dependent on U.S. corporate PC market, as desktop PCs sold
to both commercial and corporate customers accounted for 32 percent of its
revenue, 85 percent of its revenue comes from businesses, and Sixty-four
percent of its revenue comes from North and South America, according to its
2006 third-quarter results. However, U.S. shipments of desktop PCs were
shrinking. Furthermore, the corporate PC market which purchases PCs in
upgrade cycles had largely decided to take a break from buying new

systems. The last cycle started around 2002, three or so years after
companies started buying PCs ahead of the perceived Y2K problems, and
corporate clients were not expected to upgrade again until extensive testing
of Microsoft's Windows Vista (expected in early 2007), putting the next
upgrade cycle around 2008.[34][35] Heavily depending on PCs, Dell had to slash
prices to boost sales volumes, while demanding deep cuts from suppliers.[25]
Dell had long stuck by its direct sales model. However consumers had
become the main drivers of PC sales in recent years,[35] yet there had a
decline in consumers purchasing PCs through the Web or on the phone, as
increasing numbers were visiting consumer electronics retail stores to try out
the devices first. Dell's rivals in the PC industry, HP, Gateway and Acer, had a
long retail presence and so were well poised to take advantage of the
consumer shift.[36] The lack of a retail presence stymied Dell's attempts to
offer consumer electronics such as flat-panel TVs and MP3 players.[32] Dell
responded by experimenting with mall kiosks, plus quasi-retail stores in
Texas and New York.[34]
Dell had a reputation as a company that relied upon supply chain efficiencies
to sell established technologies at low prices, instead of being an innovator.
[25][25][36][37]
By the mid-2000s 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 IBM, Hewlett Packard,
and Apple Inc.)which worked well in the commoditized PC market
prevented it from making inroads into more lucrative segments, such as MP3
players and later mobile devices.[29] Increasing spending on R&D would have
cut into the operating margins that the company emphasized.[4] Dell had
done well with a horizontal organization that focused on PCs when the
computing industry moved to horizontal mix-and-match layers in the 1980s,
however by the mid-2000 the industry shifted to vertically integrated stacks
to deliver complete IT solutions and Dell lagged far behind competitors like
Hewlett Packard and Oracle. [33]
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. The original Dell model was known for high customer satisfaction when
PCs sold for thousands but by the 2000s, the company could not justify that
level of service when computers in the same lineup sold for hundreds.
[38]
Rollins responded by shifting Dick Hunter from head of manufacturing to

head of customer service. Hunter, who noted that Dell's DNA of cost-cutting
"got in the way," aimed to reduce call transfer times and have call center
representatives resolve inquiries in one call. By 2006, Dell had spent $100
million in just a few months to improve on this, and rolled out DellConnect to
answer customer inquiries more quickly. In July 2006, the company started
its Direct2Dell blog, and then in February 2007, Michael Dell launched
IdeaStorm.com, asking customers for advice including selling Linux
computers and reducing the promotional "bloatware" on PCs. These
initiatives did manage to cut the negative blog posts from 49% to 22%, as
well as reduce the "Dell Hell" prominent on Internet search engines.[30][39]
There was also criticism that Dell used faulty components for its PCs,
particularly the 11.8 million OptiPlex desktop computers sold to businesses
and governments from May 2003 to July 2005, that suffered from bad
capacitors made by a company called Nichicon.[40] A battery recall in August
2006, as a result of a Dell laptop catching fire caused much negative
attention for the company though later, Sony was found responsible for the
faulty batteries.[22]
2006 marked the first year that Dell's growth was slower than the PC
industry as a whole. By the fourth quarter of 2006, Dell lost its title of the
largest PC manufacturer to rivalHewlett Packard whose Personal Systems
Group was invigorated thanks to a restructuring initiated by their CEO Mark
Hurd.[29][41] [42]
After four out of five quarterly earnings reports were below expectations,
Rollins resigned as President and CEO on January 31, 2007 and founder
Michael Dell assumed the role of CEO again.[43]
Dell 2.0 and downsizing[edit]
Dell announced a change campaign called "Dell 2.0," reducing the number of
employees and diversifying the company's products.[36][44] While chairman of
the board after relinquishing his CEO position, Michael Dell still had
significant input in the company during Rollins' years as CEO. However, with
the return of Michael Dell as CEO, the company saw immediate changes in
operations, the exodus of many senior vice-presidents and new personnel
brought in from outside the company.[34] Michael Dell announced a number of
initiatives and plans (part of the "Dell 2.0" initiative) to improve the
company's financial performance. These include elimination of 2006 bonuses
for employees with some discretionary awards, reduction in the number of

managers reporting directly to Michael Dell from 20 to 12, and reduction of

"bureaucracy." Jim Schneider retired as CFO and was replaced by Donald
Carty, as the company came under an SEC probe for its accounting practices.
[45]

On April 23, 2008, Dell announced the closure of one of its biggest Canadian
call-centers in Kanata, Ontario, terminating approximately 1100 employees,
with 500 of those redundancies effective on the spot, and with the official
closure of the center scheduled for the summer. The call-center had opened
in 2006 after the city of Ottawa won a bid to host it. Less than a year later,
Dell planned to double its workforce to nearly 3,000 workers add a new
building. However these plans were reversed, due to a high Canadian
dollar that made the Ottawa staff relatively expensive, and also as part of
Dell's turnaround, which involved moving these call-center jobs offshore to
cut costs.[46] The company had also announced the shutdown of
its Edmonton, Alberta office, losing 900 jobs. In total, Dell announced the
ending of about 8,800 jobs in 20072008 10% of its workforce.[47]
By the late 2000s, Dell's "configure to order" approach of manufacturing
delivering individual PCs configured to customer specifications from its US
facilities was no longer as efficient or competitive with high-volume Asian
contract manufacturers as PCs became powerful low-cost commodities. [5]
[48]
Dell closed plants that produced desktop computers for the North
American market, including the Mort Topfer Manufacturing Center in Austin,
Texas (original location)[49][50] and Lebanon, Tennessee (opened in 1999) in
2008 and early 2009, respectively. The desktop production plant in WinstonSalem, North Carolina received $280 million USD in incentives from the state
and opened in 2005, but ceased operations in November 2010. Dell's
contract with the state required them to repay the incentives for failing to
meet the conditions, and they sold the North Carolina plant to Herbalife.[51][52]
[53]
Most of the work that used to take place in Dell's U.S. plants was
transferred to contract manufacturers in Asia and Mexico, or some of Dell's
own factories overseas. The Miami, Florida facility of its Alienware subsidiary
remains in operation, while Dell continues to produce its servers (its most
profitable products) in Austin, Texas. [48]On January 8, 2009 Dell announced
the closure of its manufacturing plant in Limerick, Ireland with the loss of
1,900 jobs and the transfer of production to its plant in od in Poland.[54]
The release of Apple's iPad tablet computer had a negative impact on Dell
and other major PC vendors, as consumers switched away from desktop and

laptop PCs. Dell's own mobility division has not managed success with
developing smartphones or tablets, whether running Windows or Google
Android.[55][56] The Dell Streak was a failure commercially and critically due to
its outdated OS, numerous bugs, and low resolution
screen. InfoWorld suggested that Dell and other OEMs saw tablets as a shortterm, low-investment opportunity running Google Android, an approach that
neglected user interface and failed to gain long term market traction with
consumers.[57][58] Dell has responded by pushing higher-end PCs, such as the
XPS line of notebooks, which do not compete with the Apple iPad and Kindle
Fire tablets.[59] The growing popularity of smartphones and tablet computers
instead of PCs drove Dell's consumer segment to an operating loss in Q3
2012. In December 2012, Dell suffered its first decline in holiday sales in five
years, despite the introduction of Windows 8.[60]
In the shrinking PC industry, Dell continued to lose market share, as it
dropped below Lenovo in 2011 to fall to number three in the world. Dell and
fellow American contemporaryHewlett Packard came under pressure from
Asian PC manufacturers Lenovo, Asus, and Acer, all of which had lower
production costs and willing to accept lower profit margins. In addition, while
the Asian PC vendors had been improving their quality and design, for
instance Lenovo's ThinkPad series was winning corporate customers away
from Dell's laptops, Dell's customer service and reputation had been slipping.
[61][62]
Dell remained the second-most profitable PC vendor, as it took 13
percent of operating profits in the PC industry during Q4 2012, behind Apple
Inc.'s Macintosh that took 45 percent, seven percent at Hewlett Packard, six
percent at Lenovo and Asus, and one percent for Acer.[63]
Dell has been attempting to offset its declining PC business, which still
accounted for half of its revenue and generates steady cash flow, [64] by
expanding into the enterprise market with servers, networking, software, and
services.[65] It avoided many of the acquisition writedowns and management
turnover that plagued its chief rival Hewlett Packard.[56][66] Dell also managed
some success in taking advantage of its high-touch direct sales heritage to
establish close relationships and design solutions for clients. However,
despite spending $13 billion on acquisitions to diversify its portfolio beyond
hardware,[7] the company was unable to convince the market that it could
thrive or made the transformation in the post-PC world,[66] as it suffered
continued declines in revenue and share price.[67][68][69][70] Dell's market share
in the corporate segment was previously a "moat" against rivals but this has

no longer been the case as sales and profits have dropped fallen
precipitously. [71]
2013 buyout[edit]
After several weeks of rumors, which started around January 11, 2013, Dell
announced on February 5, 2013 that it had struck a $24.4 billion leveraged
buyout deal, that would have delisted its shares from the NASDAQ and Hong
Kong Stock Exchange and taken it private.[72][73][74][75] Michael Dell and Silver
Lake Partners, aided by a $2 billion loan fromMicrosoft, will buy the public
shares at $13.65 a piece.[74] The $24.4 billion buyout is the largest leveraged
buyout backed by private equity since the 2007 financial crisis.[76] It is also
the largest technology buyout ever, surpassing the 2006 buyout of Freescale
Semiconductor for $17.5 billion.[76]
The founder of Dell, Michael Dell, said of the buyout "I believe this
transaction will open an exciting new chapter for Dell, our customers and
team members".[77] Dell rival Lenovoreacted to the buyout, saying "the
financial actions of some of our traditional competitors will not substantially
change our outlook".[77] Meanwhile, HP stated that Dell's traditional product
innovation might suffer as a result of the buyout.[78]
The buyout price represents a small premium over the current stock price,
and much lower than the stock's all-time high of $65 USD per share reached
during the dotcom bubble in 2000, as well as its July 2005 price of $40 USD
which was the high-water mark of the post-dotcom era. The price of $13.65
per share represented a 25% premium to the stock price, but far below the
52-week high of $18.36, and more than 76% off its all-time high.[79] Several
major institutional shareholders have voiced opposition, including
Southeastern Asset Management and Mason Hawkins.[80] Michael Dell owns
the largest single share of the company's stock and was part of negotiations
to go private,[81]however he is offering only $750 million of his own money for
a deal that will involve almost $16 billion in new debt.[82] T. Rowe Price, which
has the third largest holding, also objected to the low price of the proposal.
[83]
Southeastern Asset Management, the largest shareholder of Dell stock
with about 8.5%, is opposed to the deal at the per share price of $13.50 to
$13.75 as they value the company at $23.72 a share.[84] Southeastern also
complained that the overseas funds aren't offered to sweeten the buyout
offer.[85]

Typical leveraged buyouts have been viewed as tools of vulture capitalists.

Ordinarily, the buyer seeks to break up the firm and layoff workers, or bring
greater efficiency and new management to a troubled firm. The Dell
leveraged buyout is unusual because the driving force behind the deal was
not a vulture capitalist, but rather, Michael Dell, who was already the
Chairman and CEO, founder, and largest shareholder of the firm. Unlike most
leveraged buyouts that aim to wrest management control away from
incumbents, the Dell deal intends to keep the same leadership team in place.
The main aim of Dell's leveraged buyout is to rejigger the companys
financial structure.[86][86][86][87] By going private, Dell would be able to radically
restructure its legacy PC business and build up its enterprise solutions and
cloud computing, without worrying about the impact on its quarterly results
and its stock price.[70] Gartner has warned that this may include Dell leaving
the PC market entirely.[88]
In March 2013, the Blackstone Group and Carl Icahn expressed interest in
purchasing Dell.[89] In April 2013, Blackstone withdrew their offer, citing
deteriorating business.[90][91]Other private equity firms such as KKR & Co. and
TPG Capital declined to submit alternative bids for Dell, citing the uncertain
market for personal computers and competitive pressures, so the "wide-open
bidding war" never materialized.[7] Analysts said that the biggest challenge
facing Silver Lake would be to find an exit strategy to profit from its
investment, which would be when the company would hold an IPO to go
public again, and one warned But even if you can get a $25bn enterprise
value for Dell, it will take years to get out.[79]
In May 2013, Dell joined his board in voting for his offer.[92] The following
August he reached a deal with the special committee on the board for a
raised price of $13.75 plus a special dividend of 13 cents per share, as well
as a change to the voting rules.[93] The offer was accepted on September
12[94] and closed on October 30, 2013, ending Dell's 25-year run as a publicly
traded company.
After the buyout the newly private Dell offered a Voluntary Separation
Programme that they expected to reduce their workforce by up to seven
percent. The reception to the program so exceeded the expectations that
Dell may be forced to hire new staff to make up for the losses.[95]
Acquisitions[edit]
For more details on this topic, see List of Dell ownership activities.

In 2006, Dell acquired Alienware, a manufacturer of high-end PCs

popular with gamers.[96][97][98]

The company acquired EqualLogic on January 28, 2008, to gain a

foothold in the iSCSI storage market.[99][100] Because Dell already had an
efficient manufacturing process, integrating EqualLogic's products into
the company drove manufacturing prices down.[101]

In 2009, Dell acquiredPerot Systems, a technology services and outsourcing

company, mainly active in the health-sector, founded by former presidential
hopeful H. Ross Perot

In 2009, Dell acquired Perot Systems, based in Plano, Texas, in a

reported $3.9 billion deal, and amalgamated into Dell Services.[102][103] The
acquired business provided Dell with applications development, systems
integration, and strategic consulting services through its operations in the
U.S. and 10 other countries. In addition, the acquisition of Perot brought a
variety of business process outsourcing services, including claims
processing and call center operations.[104]

On February 10, 2010, the company acquired KACE Networks a leader

in Systems Management Appliances. The terms of the deal were not
disclosed.[105]

On August 16, 2010, Dell announced plans to acquire the data storage
company 3PAR.[106][107] On September 2, Hewlett-Packard offered $33 a
share for 3PAR, which Dell declined to match.[108][109]

On November 2, 2010, Dell acquired Software-as-a-Service (SaaS)

integration leader Boomi. Terms of the deal were not disclosed.[110]

In February 2011, Dell completed the acquisition

of Compellent extending the storage solution portfolio.[111]

In August 2011, Dell completed the acquisition of Force10 networks

changing the name in Dell Force10.[112] By acquiring this company Dell
now has the full Intellectual property for their networking portfolio, which
was lacking on the Dell PowerConnect range as these products are
powered by Broadcom or Marcell IM.

On February 24, 2012, Dell acquired backup and disaster recovery

software solution provider AppAssure Software of Reston, VA.
[113]
AppAssure delivered 194 percent revenue growth in 2011 and over
3500% growth in the prior three years. AppAssure supports physical

servers and VMware, Hyper-V and XenServer. The deal represents the first
acquisition since Dell formed its software division under former CA CEO
John Swainson. Dell added that it will keep AppAssures 230 employees
and invest in the company.

In March 2012, USA Today said that Dell agreed to buy SonicWall, and
the acquisition was completed May 9, 2012.[114] A company with 130
patents, SonicWall develops security products, and is a network and data
security provider.[115]

On April 2, 2012, Dell announced that it wants to acquire Wyse, global

market-leader for thin client systems[113][116]

On April 3, 2012, Dell announced that it acquired Clerity Solutions.

Clerity, a company offering services for application (re)hosting, was
formed in 1994 and has it headquarters in Chicago. At the time of the
take-over approximately 70 people were working for the company.[113][117]

On July 2, 2012, Dell announced that it was buying Quest Software.[118]

The acquisition was completed on September 28, 2012[121]

[119][120]

On November 16, 2012, Dell announced it was acquiring Gale

Technologies, a provider of Infrastructure Automation Products. Gale
Technologies was founded in 2008 and is headquartered in Santa Clara,
California[122]

On December 18, 2012, Dell announced it was acquiring Credant

Technologies, a provider of storage protection solutions.[123] Credant is the
19th acquisition in four years, as Dell had spent $13 billion on acquisitions
since 2008 and $5 billion in the past year alone.[124]

On March 24, 2014, Dell announced it was acquiring StatSoft, a global

provider of analytics software, in order to bolster its Big Data solutions
offering.[125]

Dell facilities[edit]
Dell's headquarters is located in Round Rock, Texas.[126] As of 2013 the
company employs about 14,000 people in central Texas and is the region's
largest private employer,[127]which has 2,100,000 square feet (200,000 m2) of
space.[128] As of 1999 almost half of the general fund of the City of Round
Rock originates from sales taxes generated from the Dell headquarters.[129]

Dell previously had its headquarters in the Arboretum complex in

northern Austin, Texas.[130][131] In 1989 Dell occupied 127,000 square feet
(11,800 m2) in the Arboretum complex.[132] In 1990, Dell had 1,200
employees in its headquarters.[130] 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.[133] 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.[134] Dell's lease in the Arboretum had been
scheduled to expire in 1994.[135]

The company sponsors Dell Diamond, the home stadium of theRound Rock
Express, the AAA minor league baseball affiliate of the Texas Rangers major
league baseball team
By 1996, Dell was moving its headquarters to Round Rock.[136] As of January
1996 3,500 people still worked at the current Dell headquarters. One building
of the Round Rock headquarters, Round Rock 3, had space for 6,400
employees and was scheduled to be completed in November 1996. [137] In
1998 Dell announced that it was going to add two buildings to its Round Rock
complex, adding 1,600,000 square feet (150,000 m2) of office space to the
complex.[138]
In 2000, Dell announced that it would lease 80,000 square feet (7,400 m2) of
space in the Las Cimas office complex in unincorporatedTravis County, Texas,
between Austin and West Lake Hills, to house the company's executive
offices and corporate headquarters. 100 senior executives were scheduled to
work in the building by the end of 2000.[139] In January 2001, the company
leased the space in Las Cimas 2, located along Loop 360. Las Cimas 2
housed Dell's executives, the investment operations, and some corporate
functions. Dell also had an option for 138,000 square feet (12,800 m2) of
space in Las Cimas 3.[140] After a slowdown in business required reducing
employees and production capacity, Dell decided to sublease its offices in
two buildings in the Las Cimas office complex.[141] In 2002 Dell announced

that it planned to sublease its space to another tenant; the company planned
to move its headquarters back to Round Rock once a tenant was secured.
[140]
By 2003, Dell moved its headquarters back to Round Rock. It leased all of
Las Cimas I and II, with a total of 312,000 square feet (29,000 m2), for about
a seven-year period after 2003. By that year roughly 100,000 square feet
(9,300 m2) of that space was absorbed by new subtenants.[142]
In 2008, Dell switched the power sources of the Round Rock headquarters to
more environmentally friendly ones, with 60% of the total power coming
from TXU Energy wind farms and 40% coming from the Austin Community
Landfill gas-to-energy plant operated by Waste Management, Inc.[128]
Dell facilities in the United States are located in Austin, Texas; Plano,
Texas; Nashua, New Hampshire; Nashville, Tennessee; Oklahoma City,
Oklahoma; Peoria, Illinois; Hillsboro, Oregon (Portland area); Winston-Salem,
North Carolina; Eden Prairie, Minnesota (Dell Compellent); Bowling Green,
Kentucky; Lincoln, Nebraska; and Miami, Florida. Facilities located abroad
include Penang, Malaysia; Xiamen, China; Bracknell, UK; Manila,
Philippines[143] Chennai, India;[144] Hyderabad, India; Noida,
India; Hortolandia and Porto Alegre, Brazil; Bratislava, Slovakia; d, Poland,
[145]
Panama City in Panama, Dublin and Limerick, Ireland and Casablanca,
Morocco
The US and India are the only countries that have all Dell's business
functions and provide support globally: research and development,
manufacturing, finance, analysis, and customer care.[146]
Manufacturing[edit]
From its early beginnings, Dell operated as a pioneer in the "configure to
order" approach to manufacturingdelivering individual PCs configured to
customer specifications. In contrast, most PC manufacturers in those times
delivered large orders to intermediaries on a quarterly basis.[147]
To minimize the delay between purchase and delivery, Dell has a general
policy of manufacturing its products close to its customers. This also allows
for implementing a just-in-time (JIT) manufacturing approach, which
minimizes inventory costs. Low inventory is another signature of the Dell
business modela critical consideration in an industry where components
depreciate very rapidly.[148]

Dell's manufacturing process covers assembly, software installation,

functional testing (including "burn-in"), and quality control. Throughout most
of the company's history, Dell manufactured desktop machines in-house and
contracted out manufacturing of base notebooks for configuration in-house.
[149]
However, the company's approach has changed, as cited in the 2006
Annual Report, which states, "We are continuing to expand our use of original
design manufacturing partnerships and manufacturing outsourcing
relationships." The Wall Street Journal reported in September 2008 that "Dell
has approached contract computer manufacturers with offers to sell" their
plants.[150] By the late 2000s, Dell's "configure to order" approach of
manufacturingdelivering individual PCs configured to customer
specifications from its US facilities was no longer as efficient or competitive
with high-volume Asian contract manufacturers as PCs became powerful lowcost commodities.[48]
Assembly of desktop computers for the North American market formerly took
place at Dell plants in Austin, Texas (original location) and Lebanon,
Tennessee (opened in 1999), which have been closed in 2008 and early
2009, respectively. The plant in Winston-Salem, North Carolina received $280
million USD in incentives from the state and opened in 2005, but ceased
operations in November 2010, and Dell's contract with the state requires
them to repay the incentives for failing to meet the conditions.[52][53] Most of
the work that used to take place in Dell's U.S. plants was transferred to
contract manufacturers in Asia and Mexico, or some of Dell's own factories
overseas. The Miami, Florida facility of its Alienware subsidiary remains in
operation, while Dell continues to produce its servers (its most profitable
products) in Austin, Texas. [48]
Dell assembled computers for the EMEA market at the Limerick facility in the
Republic of Ireland, and once employed about 4,500 people in that country.
Dell began manufacturing in Limerick in 1991 and went on to become
Ireland's largest exporter of goods and its second-largest company and
foreign investor. On January 8, 2009, Dell announced that it would move all
Dell manufacturing in Limerick to Dell's new plant in the Polish city
of d by January 2010.[151] European Union officials said they would
investigate a 52.7million aid package the Polish government used to attract
Dell away from Ireland.[152] European Manufacturing Facility 1 (EMF1, opened
in 1990) and EMF3 form part of the Raheen Industrial Estate near Limerick.
EMF2 (previously a Wang facility, later occupied by Flextronics, situated in
Castletroy) closed in 2002,[citation needed] and Dell Inc. has consolidated

production into EMF3 (EMF1 now[when?] contains only offices).[153] Subsidies

from the Polish government did keep Dell for a long time.[154] After ending
assembly in the Limerick plant the Cherrywood Technology Campus in Dublin
was the largest Dell office in the republic with over 1200 people in sales
(mainly UK & Ireland), support (enterprise support for EMEA) and research
and development for cloud computing, but no more manufacturing
except [155] Dell's Alienware subsidiary, which manufactures PCs in an
Athlone, Ireland plant. Whether this facility will remain in Ireland is not
certain.[156] Construction of EMF4 in d, Poland has started: Dell started
production there in autumn 2007.[157]
Dell opened plants in Penang, Malaysia in 1995, and in Xiamen, China in
1999. These facilities serve the Asian market and assemble 95% of Dell
notebooks. Dell Inc. has invested[when?] an estimated $60 million in a new
manufacturing unit in Chennai, India, to support the sales of its products in
the Indian subcontinent. Indian-made products bear the "Made in India"
mark. In 2007 the Chennai facility had the target of producing 400,000
desktop PCs, and plans envisaged it starting to produce notebook PCs and
other products in the second half of 2007.[citation needed]
Dell moved desktop and PowerEdge server manufacturing for the South
American market from the Eldorado do Sul plant opened in 1999, to a new
plant in Hortolandia, Brazil in 2007.[158]
Products[edit]
Scope and brands[edit]

The corporation markets specific brand names to different market segments.

Its Business/Corporate class represent brands where the company
advertising emphasizes long life-cycles, reliability, and serviceability. Such
brands include:
Dell service and support brands include the Dell Solution Station (extended
domestic support services, previously "Dell on Call"), Dell Support
Center (extended support services abroad), Dell Business Support (a
commercial service-contract that provides an industry-certified technician
with a lower call-volume than in normal queues), Dell Everdream Desktop
Management ("Software as a Service" remote-desktop management,

originally a SaaS company founded by Elon Musk's cousin, Lyndon Rive,

which Dell bought in 2007[160]), and Your Tech Team (a support-queue
available to home users who purchased their systems either through Dell's
website or through Dell phone-centers).
Discontinued products and brands include Axim (PDA; discontinued April 9,
2007),[161] Dimension (home and small office desktop computers;
discontinued July 2007), Dell Digital Jukebox (MP3 player; discontinued
August 2006), Dell PowerApp (application-based servers), and Dell Optiplex
(desktop and tower computers previously supported to run server and
desktop operating systems).
Technical support[edit]
Dell routes technical support queries on products for the professional market
according to component-type and to the level of support purchased:[162]
1. Basic support provides business-hours telephone support and next
business-day on-site support/ Return-to-Base, or Collect and Return
Services (based on contracts purchased at point of sale)
2. Dell ProSupport provides 24x7x365 telephone and online support, a
selection of 4 or 6-hour onsite support after telephone-based
troubleshooting, and a Mission Critical option with two-hour onsite
support, for customers who choose the highest level of support for
their most critical hardware assets.[163]
In addition, the company provides protection services, advisory services,
multivendor hardware support, "how-to" support for software applications,
collaborative support with many third-party vendors, and online parts and
labor dispatching for customers who diagnose and troubleshoot their
hardware. Dell also provides Dell ProSupport customers access to a crisiscenter to handle major outages, or problems caused by natural disasters.
[164]
Dell also provide on-line support by using the computer's service-tag that
provides full list of the hardware elements installed originally, purchase date
and provides the latest upgrades for the original hardware drivers.
Dell's Consumer division has 24x7 phone based and online troubleshooting in
the United States and Canada. In 2008, Dell redesigned services-and-support
for businesses with "Dell ProSupport", offering customers more options to
adapt services to fit their needs.

Commercial aspects[edit]
Organization[edit]
The board consists of nine directors. Michael Dell, the founder of the
company, serves as chairman of the board and chief executive officer. Other
board members include Don Carty, William Gray, Judy Lewent, Klaus
Luft, Alex Mandl, Michael A. Miles, and Sam Nunn. Shareholders elect the
nine board members at meetings, and those board members who do not get
a majority of votes must submit a resignation to the board, which will
subsequently choose whether or not to accept the resignation. The board of
directors usually sets up five committees having oversight over specific
matters. These committees include the Audit Committee, which handles
accounting issues, including auditing and reporting; the Compensation
Committee, which approves compensation for the CEO and other employees
of the company; the Finance Committee, which handles financial matters
such as proposed mergers and acquisitions; the Governance and Nominating
Committee, which handles various corporate matters (including nomination
of the board); and the Antitrust Compliance Committee, which attempts to
prevent company practices from violating antitrust laws.[citation needed]
Day-to-day operations of the company are run by the Global Executive
Management Committee, which sets strategic direction. Dell has regional
senior vice-presidents for countries other than the United States, including
David Marmonti for EMEA and Stephen J. Felice for Asia/Japan. As of 2007,
other officers included Martin Garvin (senior vice president for worldwide
procurement) and Susan Sheskey (vice president and Chief Information
Officer).[citation needed]
Marketing[edit]
Dell advertisements have appeared in several types of media including
television, the Internet, magazines, catalogs and newspapers. Some of Dell
Inc's marketing strategies include lowering prices at all times of the year,
free bonus products (such as Dell printers), and free shipping to encourage
more sales and stave off competitors. In 2006, Dell cut its prices in an effort
to maintain its 19.2% market share. However, this also cut profit-margins by
more than half, from 8.7 to 4.3 percent. To maintain its low prices, Dell
continues to accept most purchases of its products via the Internet and
through the telephone network, and to move its customer-care division to
India and El Salvador.[165]

A popular United States television and print ad campaign in the early 2000s
featured the actor Ben Curtis playing the part of "Steven", a lightly
mischievous blond-haired youth who came to the assistance of bereft
computer purchasers. Each television advertisement usually ended with
Steven's catch-phrase: "Dude, you're gettin' a Dell!"[citation needed]
A subsequent advertising campaign featured interns at Dell headquarters
(with Curtis' character appearing in a small cameo at the end of one of the
first commercials in this particular campaign).
A Dell advertising campaign for the XPS line of gaming computers featured in
print in the September 2006 issue of Wired. It used as a tagline the common
term in Internet andgamer slang: "FTW", meaning "For The Win". However,
Dell Inc. soon[when?] dropped the campaign.
In 2007, Dell switched advertising agencies in the US from BBDO to Working
Mother Media. In July 2007, Dell released new advertising created by Working
Mother to support the Inspiron and XPS lines. The ads featured music from
the Flaming Lips and Devo who re-formed especially to record the song in the
ad "Work it Out". Also in 2007, Dell began using the slogan "Yours is here" to
say that it customizes computers to fit customers' requirements.[166]
Beginning in the year 2011, Dell began hosting a Conference in Austin, TX at
the Austin Convention Center titled "Dell World". The event featured new
technology and services provided by Dell and Dell's partners. In 2011, the
event was held October 1214.[167] In 2012, the event was held December
1113.[168] In 2013, the event was held December 1113.[169]
Dell partner program[edit]

In late 2007, Dell Inc. announced that it planned to expand its program
to value-added resellers (VARs), giving it the official name of "Dell Partner
Direct" and a new Website.[170]
Dell India has started Online Ecommerce website[171] with its Dell Partner
www.compuindia.com GNG Electronics Pvt Ltd[172] termed as Dell Express
Ship Affiliate(DESA). The main objective was to reduce the delivery time.
Customers who visit Dell India official site are given option to buy online
which then will be redirected to Dell affiliate website compuindia.com. [146]
Criticisms of marketing of laptop security[edit]

In 2008, Dell received press coverage over its claim of having the world's
most secure laptops, specifically, its Latitude D630 and Latitude D830.[173] At
Lenovo's request, the (U.S.) National Advertising Division (NAD) evaluated
the claim, and reported that Dell did not have enough evidence to support it.
[174]

Retail[edit]
Dell first opened their retail stores in India.[146]
United States[edit]

In the early 1990s, Dell sold its products through Best Buy, Costco and Sam's
Club stores in the United States. Dell stopped this practice in 1994, citing low
profit-margins on the business, exclusively distributing through a direct-sales
model for the next decade. In 2003, Dell briefly sold products in Sears stores
in the U.S. In 2007, Dell started shipping its products to major retailers in the
U.S. once again, starting with Sam's Club and Wal-Mart. Staples, the largest
office-supply retailer in the U.S., and Best Buy, the largest electronics retailer
in the U.S., became Dell retail partners later that same year.
Kiosks[edit]
Starting in 2002, Dell opened kiosk locations in shopping malls across the
United States to provide personal service to customers who preferred this
method of shopping to Internet or telephone orders.[citation needed] Despite the
added expense, prices at the kiosks match or beat prices available through
other retail channels. Starting in 2005, Dell expanded kiosk locations to
include shopping malls across Australia, Canada, Singapore and Hong Kong.
On January 30, 2008, Dell shut down all 140 kiosks in the U.S. due to
expansion into retail stores.[175]
By June 3, 2010, Dell had also shut down all of its mall kiosks in Australia.[176]
NorthPark Service Center[edit]
In 2006, Dell Inc. opened one full store, 3,000-square-foot (280 m2) in area,
at NorthPark Center in Dallas, Texas. It operates the retail outlet seven days
a week to display about 36 models, including PCs and televisions. As at the
kiosks, customers can only see demonstration-computers and place orders

through agents. Dell then delivers purchased items just as if the customer
had placed the order by phone or over the Internet.
In addition to showcasing products, the stores also support on-site warranties
and non-warranty service ("Dell Solution Station"). Services offered include
repairing computer video-cards and removing spyware from hard drives.
On February 14, 2008, Dell closed the Service Center in its Dallas NorthPark
store and laid off all the technical staff there.[citation needed]
Retail Stores[edit]

As of the end of February 2008, Dell products shipped to one of the largest
office-supply retailers in Canada, Staples Business Depot. In April
2008, Future Shop and Best Buybegan carrying a subset of Dell products,
such as certain desktops, laptops, printers, and monitors.
Since some shoppers in certain markets show reluctance to purchase
technological products through the phone or the Internet, Dell has looked
into opening retail operations in some countries in Central Europe and
Russia. In April 2007, Dell opened a retail store in Budapest. In October of the
same year, Dell opened a retail store in Moscow.
In the UK, HMV's flagship Trocadero store has sold Dell XPS PCs since
December 2007. From January 2008 the UK stores of DSGi have sold Dell
products (in particular, throughCurrys and PC World stores). As of 2008, the
large supermarket-chain Tesco has sold Dell laptops and desktops in outlets
throughout the UK.
In May 2008, Dell reached an agreement with office supply
chain, Officeworks (part of Coles Group), to stock a few modified models in
the Inspiron desktop and notebook range. These models have slightly
different model numbers, but almost replicate the ones available from the
Dell Store. Dell continued its retail push in the Australian market with its
partnership with Harris Technology (another part of Coles Group) in
November of the same year. In addition, Dell expanded its retail distributions
in Australia through an agreement with discount electrical retailer, The Good
Guys, known for "Slashing Prices". Dell agreed to distribute a variety of
makes of both desktops and notebooks, includingStudio and XPS systems in
late 2008. Dell and Dick Smith Electronics (owned by Woolworths Limited)
reached an agreement to expand within Dick Smith's 400 stores throughout

Australia and New Zealand in May 2009 (1 year since Officeworks owned
by Coles Group reached a deal). The retailer has agreed to distribute a
variety of Inspiron andStudio notebooks, with minimal Studio desktops from
the Dell range. As of 2009, Dell continues to run and operate its various
kiosks in 18 shopping centres throughout Australia. On March 31, 2010 Dell
announced to Australian Kiosk employees that they were shutting down the
Australian/New Zealand Dell kiosk program.
In Germany, Dell is selling selected smartphones and notebooks via Media
Markt and Saturn, as well as some shopping websites.[177]
Competition[edit]
Dell's major competitors include HewlettPackard (HP), Acer, Fujitsu, Toshiba, Gateway, Sony, Asus, Lenovo, IBM, MSI, P
anasonic with its Toughbook series, Samsung andApple. Dell and its
subsidiary, Alienware, compete in the enthusiast market
against AVADirect, Falcon Northwest, VoodooPC (a subsidiary of HP), and
other manufacturers. In the second quarter of 2006, Dell had between 18%
and 19% share of the worldwide personal computer market, compared to HP
with roughly 15%.
In late 2006, Dell lost its lead in the PC-business to Hewlett-Packard.
Both Gartner and IDC estimated that in the third quarter of 2006, HP shipped
more units[178] worldwide than Dell did. Dell's 3.6% growth paled in
comparison to HP's 15% growth during the same period. The problem got
worse in the fourth quarter, when Gartner estimated[179] that Dell PC
shipments declined 8.9% (versus HP's 23.9% growth). As a result, at the end
of 2006 Dell's overall PC market-share stood at 13.9% (versus HP's 17.4%).
IDC reported that Dell lost more server market share than any of the top four
competitors in that arena. IDC's Q4 2006 estimates show Dell's share of the
server market at 8.1%, down from 9.5% in the previous year. This represents
an 8.8% loss year-over-year, primarily to competitors EMC and IBM.
Partnership with EMC[edit]
The Dell/EMC brand applies solely to products that result from Dell's
partnership with EMC Corporation.[citation needed] In some cases, Dell and EMC
jointly design such products. Other cases involve EMC products that Dell
supportsgenerally midrange storage systems, such as fibre

channel and iSCSI storage area networks. The relationship also promotes and
sells OEM versions of backup, recovery, replication and archiving software.
[180]

On December 9, 2008, Dell and EMC announced the multi-year extension,

through 2013, of their strategic partnership that began in 2001. In addition,
Dell plans to expand its product line-up by adding the EMC Celerra NX4
storage system to the portfolio of Dell/EMC family of networked storage
systems, as well as partnering on a new line of de-duplication products as
part of its TierDisk family of data-storage devices.[181]
On October 17, 2011, Dell announced officially discontinued reselling all EMC
storage products, ending a 10 year long partnership 2 years early.[182]
Environmental record[edit]
Dell committed to reduce greenhouse gas emissions from its global activities
by 40% by 2015, with 2008 fiscal year as the baseline year.[183] It is listed
in Greenpeaces Guide to Greener Electronics that scores leading electronics
manufacturers according to their policies on sustainability, climate and
energy and how green their products are. In November 2011, Dell ranked
2nd out of 15 listed electronics makers (increasing its score to 5.1 from 4.9,
which it gained in the previous ranking from October 2010).[184]
Dell was the first company to publicly state a timeline for the elimination of
toxic polyvinyl chloride (PVC) and brominated flame retardants (BFRs), which
it planned to phase out by the end of 2009. It revised this commitment and
now aims to remove these toxics by the end of 2011 but only in its
computing products.[185] In March 2010, Greenpeace activists protested at
Dell offices in Bangalore, Amsterdam and Copenhagen calling for Dells
founder and CEO Michael Dell to drop the toxics and claiming that Dells
aspiration to be the greenest technology company on the planet[186] was
hypocritical.[187] Dell has launched its first products completely free of PVC
and BFRs with the G-Series monitors (G2210 and G2410) in 2009.[188]
In its 2012 report on progress relating to conflict minerals, the Enough
Project rated Dell the eighth highest of 24 consumer electronics companies.
[189]

Green initiatives[edit]
Dell became the first company in the information technology industry to
establish a product-recycling goal (in 2004) and completed the
implementation of its global consumer recycling-program in 2006. [190] On
February 6, 2007, the National Recycling Coalition awarded Dell its
"Recycling Works" award for efforts to promote producer responsibility. [191]On
July 19, 2007, Dell announced that it had exceeded targets in working to
achieve a multi-year goal of recovering 275 million pounds of computer
equipment by 2009. The company reported the recovery of 78 million
pounds (nearly 40,000 tons) of IT equipment from customers in 2006, a 93percent increase over 2005; and 12.4% of the equipment Dell sold seven
years earlier.[192]
On June 5, 2007, Dell set a goal of becoming the greenest technology
company on Earth for the long term.[citation needed] The company launched
a zero-carbon initiative that includes:
1. reducing Dell's carbon intensity by 15 percent by 2012
2. requiring primary suppliers to report carbon emissions data during
quarterly business reviews
3. partnering with customers to build the "greenest PC on the planet"
4. expanding the company's carbon-offsetting program, "Plant a Tree for
Me"
The company introduced the term "The Re-Generation" during a round
table in London commemorating 2007 World Environment Day. "The ReGeneration" refers to people of all ages throughout the world who want to
make a difference in improving the world's environment. Dell also talked
about plans to take the lead in setting an environmental standard for the
technology industry and maintaining that leadership in the future.[citation needed]
Dell reports its environmental performance in an annual Corporate Social
Responsibility (CSR) Report that follows the Global Reporting Initiative (GRI)
protocol. Dell's 2008 CSR report ranked as "Application Level B" as "checked
by GRI".[193]
The company aims to reduce its external environmental impact through
energy-efficient evolution of products, and also reduce its direct operational

impact through energy-efficiency programs. Internal energy-efficiency

programs reportedly save the company more than $3 million annually in
energy-cost savings. The largest component of the company's internal
energy-efficiency savings comes through PC power management: the
company expects to save $1.8 million in energy costs through using
specialized energy-management software on a network of 50,000 PCs.
Criticism[edit]
See also: Lawsuits involving Dell Inc.
In the 1990s, Dell switched from using
primarily ATX motherboards and PSU to using boards and power supplies
with mechanically identical but differently wired connectors. This meant
customers wishing to upgrade their hardware would have to replace parts
with scarce Dell-compatible parts instead of commonly available parts. While
motherboard power connections reverted to the industry standard in 2003,
Dell continues to remain secretive about their motherboard pin-outs for
peripherals (such as MMC readers and power on/off switches and LED's). [194]
[195]

In 2005, complaints about Dell more than doubled to 1,533, after earnings
grew 52% that year.[196]
In 2006, Dell acknowledged that it had problems with customer service.
Issues included call transfers[197] of more than 45% of calls and long wait
times. Dell's blog detailed the response: "We're spending more than a
$100 million and a lot of blood, sweat and tears of talented people to fix
this."[198] Later in the year, the company increased its spending on customer
service to $150 million.[199] Despite significant investment in this space, Dell
continues to face public scrutiny with even the company's own website
littered with complaints regarding the issue escalation process.[200]
On August 17, 2007, Dell Inc. announced that after an internal investigation
into its accounting practices it would restate and reduce earnings from 2003
through to the first quarter of 2007 by a total amount of between $50 million
and $150 million, or 2 cents to 7 cents per share.[201] The investigation,
begun in November 2006, resulted from concerns raised by the U.S.
Securities and Exchange Commission over some documents and information
that Dell Inc. had submitted.[202] It was alleged that Dell had not disclosed
large exclusivity payments received from Intel for agreeing not to buy

processors from rival manufacturer AMD. In 2010 Dell finally paid

$100 million to settle the SEC's charges of fraud. Michael Dell and other
executives also paid penalties and suffered other sanctions, without
admitting or denying the charges.[203]
In July 2009, Dell apologized after drawing the ire of the Taiwanese Consumer
Protection Commission for twice refusing to honour a flood of orders against
unusually low prices offered on its Taiwanese website. In the first instance,
Dell offered a 19" LCD panel for $15. In the second instance, Dell offered its
Latitude E4300 notebook at NT$18,558 (US$580), 70% lower than usual
price of NT$60,900 (US$1900). Concerning the E4300, rather than honour
the discount taking a significant loss, the firm withdrew orders and offered a
voucher of up to NT$20,000 (US$625) a customer in compensation. The
consumer rights authorities in Taiwan fined Dell NT$1 million (US$31250) for
customer rights infringements. Many consumers sued the firm for the unfair
compensation. A court in southern Taiwan ordered the firm to deliver 18
laptops and 76 flat-panel monitors to 31 consumers for NT$490,000
(US$15,120), less than a third of the normal price.[204] The court said the
event could hardly be regarded as mistakes, as the prestigious firm said the
company mispriced its products twice in Taiwanese website within 3 weeks.
[205]

After Michael Dell made a $24.4 billion buyout bid in August 2013, activist
shareholder Carl Icahn sued the company and its board in an attempt to
derail the bid and promote his own forthcoming offer.[206]