Dell Inc.

Type: Public (NASDAQ: DELL SEHK: 4331)
Founded: Austin, Texas (November 4, 1984) (as PC's Limited)
Headquarters: Round Rock, Texas, United States of America
Key people: Michael Dell, Founder and CEO, Don Carty, CFO
Industry: Computer hardware
Products: Desktops, Servers, Notebooks, Peripherals, Printers
Website: www.dell.com

General Information

Dell Inc. (NASDAQ: DELL SEHK: 4331), an American computer-hardware company based in Round Rock, Texas, develops, manufactures, sells and supports personal computers, servers, data storage devices, network switches, personal digital assistants (PDAs), software, televisions, computer peripherals and other technology-related products. As of 2006, Dell employed more than 78,700 people worldwide. Formerly holding a substantial lead in sales of PCs and of servers[citation needed], the company recently slipped behind Hewlett-Packard (HP) in these markets[citation needed].

In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th on its annual Top 20 list of the most-admired companies in the United States. A 2006 publication identified Dell as one of 38 high-performance companies in the S&P 500, which consistently out-performed the market over the previous 15 years.

Business Model

Dell sells all its products both to end-use consumers and to corporate customers, using a direct-sales model via the Internet and the telephone network. Dell maintains a negative cash conversion cycle through use of this model: in other words, Dell Inc. receives payment for the products before it has to pay for the materials. Dell also practices just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell’s JIT approach utilizes the “pull” system by building computers only after customers place orders and by requesting materials from suppliers as needed. In this way Dell mirrors Toyota by following Toyota Way Principle #3 ('Use 'pull' systems to avoid overproduction'). Since the days of the original dominance of telephone-ordering, the Internet has significantly enhanced Dell’s business-model, making it easier for customers and potential customers to contact Dell directly. This model also has enabled Dell to provide very customizable systems at an affordable rate, since Dell manufacturing builds specifically for each customer. Other computer-manufacturers, including Gateway and Hewlett-Packard, have attempted to adapt[citation needed] this same business-model, but due to timing and/or retail-channel pressures they have not achieved the same results as Dell.