Dell Inc.: Changing the Business Model

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Case Analysis Case 9 – Dell Inc.: Changing the Business Model Situation Analysis The case presents the situation of Dell Inc. It was founded in 1984 by Michael Dell while he was a freshman at the University of Texas. He started his computer business in a very simple way: he bought personal computers from local retailers and add features to improve its performance and then sell it out of the trunk of his car. It did not take long an the business became a success. By the end of the first year the sales reached $600,000 and they kept increasing significantly for many years. To be able to give full attention to the business Michael Dell decided to quit school by the end of his freshman year in college. Some Chronological Facts: In 1985 Michael Dell began assembling his own computers In 1987 the company launched its first catalog. They went public and changed their name from PC's Limited to Dell Computer Corporation In 1989 Michael Dell was named “Enterpreneur of the year” by Inc. In 1992 the company was listed on the Fortune 500 for the first time. In 1995 their sales reached $3.5 billion, and they were considered one of the top 5 PC vendors in the world. In 2001 the company changed its name to Dell Inc. In 2005 Dell reached the top of Fortune's List “Most Admired Comapanies”. Problems: The problems started when the increasing in competition and cost pressures started to reach Dell's business. In 2007 they suffered their first significant drop in net income. As most of other business they also got hit by the “Great Recession” that happened in 2008-2009. The business grew too fast and that resulted in disorganization in different levels of the company. Their sales jumped from $546 million in 1991 to $3,4 billion in 1995. Michael Dell tried to slow down the company's growth strategy while he recruited experts from competitors like

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