Dell's Market Share example essay topic

Michael Dell-Dell Computer Corporation " If we all did the things we are capable of doing we would literally astound ourselves". -Thomas Edison When Michael Dell was a high school student he came across the product that would change his life-the personal computer. He would take it apart, learn about how it worked, what was inside, and how to upgrade the machine. Even as a small child, he seemed to be a very astute and inquisitive child. As a second grader, he had his first business selling candy; at age 12 he washed dishes in a Chinese restaurant to save money for his stamp collection. Business issues and current events were always discussed at home around the dinner table.

His mother was a financial advisor and his father an orthodontist. How the Business Started: According to his bio, Michael Dell went to college intending to become a doctor. Meanwhile, his hobby was working with computers. His hobby got the best of him. Dell began selling computers out of his dorm room with IBM personal computers (PCs) that he upgraded.

And as his new venture progressed, he developed an innovative approach to conducting business. His idea was to sell computers directly to the consumer without going through retailers, and in the process, design and deliver a computer based upon the customers' own specifications. Eventually, his mission grew to become "the most successful computer company in the world at delivering the best customer experience in the markets [they] serve". Thus in 1984, Dell founded the Dell Computer Corporation with $1,000 minimum as required by Texas law.

In 1985, he then shifted to assembling and marketing his own brand of PCs. In Dell's first full year of operation, company sales hit $6 million. In fiscal 2000, company sales soared to more than $25 billion. So just how has Dell managed to distinguish his company from the rest? According to the Census Bureau, in 1984, 8% of the household population had computers in their homes, by the year 2000, 51% of the household population had home computers.

Michael Dell's breakthrough idea was to bypass the middleman and sell custom-built PCs directly to the customers. No retailers, no bricks and mortar sales. To overcome consumer resistance to phone sales, Dell established a strong technical-support and service program. The strategy worked within the United States and abroad. Dell sells custom-ordered computers directly to consumers, enabling the company to keep costly inventory at a minimum. Though their business has not changed in 15 years, they have decided to refine rather than redefine the model.

The model was continuously refined through business process redesign and continuous process improvement. The direct model is simple in concept but involves great complexity and precision in actual execution. Dell's management believed that they have helped to improve and extend the business model by using Information Technology, rather than change it. THE DELL BUSINESS MODEL Refinement of the Dell model Business Strategy Information links IT Applications Performance Effects Direct Sales Customer orders are transmitted directly to Dell, where program does second check for technical and financial feasibility Call center automation, Premier Pages, Dell On-Line, Dell Product Services Accurate forecasting of demand Segmentation of demand Early indication of shifts in demand Build-to-order Order information travels with product through the build process, enabling inventory control, the meeting of special customer requirements, download of customer software, etc. Dell Order Management System, e-mail, Lotus Notes Better control of operations Reduced inventory and transit points Better communication during build process Improved monitoring and evaluation of production and supplier quality Direct Distribution Information sharing notifies supplier to ship monitors to arrive with PC Aggregation of information includes orders, inventory turnover, production throughput, supplier quality, on-time distribution Dell Logistics System, Lotus Notes, e-mail Information to Run the Business Accelerated outbound Logistics No Inventory Optimization of production, quality, and distribution, globally and locally. The Information Society Dell said he got the idea to sell directly to consumers from a competitor.

Actually, he got an idea of what not to do. In the business environment, the focus is on execution, getting things done. With a landscape wide open for renovation, Dell saw an obvious solution, and thus kicked off the 'build to order' revolution. Dell Computer Corporation is now one of the top vendors of personal computers worldwide, with offices in 34 countries and more than 35,000 employees serving customers in 170 countries and territories.

When Dell Computer Corporation joined the Fortune 500 list in 1992, Michael Dell became the youngest CEO of a company ever to earn a ranking on the list. Since 1995, the company has been included on Fortune's list of 'Most Admired Companies. ' A key to his continued success is that he sticks to the fundamentals, people questioned his direct model approach, but he believed in it and stuck with it. At the same time, however, Dell is 'man enough to know when something isn't working' and will retreat.

Organizational Potentials The core competencies of this organization is that Dell makes the direct sales, build-to-order process and direct customer relations work individually and jointly with each other. The direct sales approach is built on two key elements: direct customer relationships and products and services targeted at distinct customer segments. Direct sales means that Dell must reach out to potential customers; either through its own sales force or through advertising and other marketing efforts. Dell does sell through resellers and integrators in some cases, especially outside the United States, but for the most part it does not use the services of the channel, nor does it support the profit margins of the channel. According to John Cone, Training and Development, Michael Dell sited some people-related indicators of hyper growth: "Employees cite tenure in quarters, not years; the ratio of good ideas to experienced people is 10: 1; you need three people to do the same job that used to take one; and there are no business cases to tell you how other companies have done it before you. Training as always been a part of the company's strategy since the beginning and is still continuing".

This is called Dell Learning and all employees usually attend these sessions. Some of its main objectives are as follows: To align learning with key business initiatives To make learning directly available to everyone who needs it To create clarity around competencies required for continued success To provide consistency, where needed, through global curricula Education should be business-issue based Learners (employees) are in control In the year 2000, it was reported that the company get approximately 200 new employees on board each week. These principles and the direct nature of the computer business have required Dell to move aggressively toward technology-enable learning. Dell has a reputation as an expert in strategy execution. It bases this execution on a solid business strategy that is continuously changing to fulfill unmet customer needs in large, growing market segments. Dell's strategic activities are highly aligned with creating financial value and its strategic competencies are highly synchronized.

Dell has achieved its success by using effective mail-order strategies to sell microcomputers. It stresses outstanding customer service as a way to assuage customers' reluctance to spend $3,000 on products they will not see until they are delivered to their homes. Dell also believes effective support services are a way to overcome the unreliable reputation of mail-order operations. Efficient factories and direct sales keep costs low, allowing the computer maker to undercut competitors and steal market share, especially while demand has been low. Dell also collects from customers long before it fills orders therefore it has little debt. Furthermore, the company acknowledges that it is facing the same reluctant buyers as the rest of the industry.

With the economy in low gear, spending on computer gear will rise just 3.7% in 2003 as big corporations make do with less according to market tracker IDC. Even though the company has expanded into new product lines, such as, networking switches and PDAs last year, Dell still generated about 80% of revenue from PC and notebook sales as its core product lines. Dell continues to launch efforts to reposition itself as an Internet technology firm, making servers and storage systems that compete with the products of Sun Microsystems, Inc. The firm also began offering various Internet services such as Web hosting and wireless Internet access.

The company is also restructuring core training and development programs to further improve their effectiveness and, for the second consecutive year, enhanced their compensation and benefits programs consistent with the philosophy of sharing their success with the employees. In January of 2003, the company has quietly announced that it would pilot sales kiosks for Sears. The goal of the kiosk program is improve retail market penetration. According to Marketing News, Dell wants to reach the retail shopper, particularly those that do not shop online. The kiosk will give you the benefit to see, feel, touch and talk to a subject matter expert. Consumers can also get a test drive and a demonstration of a product.

Then you can order it online at home or at the kiosk. Dell will remain in control of all products. If you go to a kiosk located at a Sears's pilot site and order from that location, it is still a direct transaction with Dell. Sears is not a party to the transaction or an intermediary in it.

Most likely, Sears may get a percentage of the gross sales but the details of the negotiations have not been released. Dell plans on investing more in the "direct after-sales service and support". On April 28th, an announcement was made about the release of a new PC targeted at Video Gamers. This item is a high end product geared for serious game players under their Dimension XPS division. It was also announced the induction of three new PowerConnectTM switches which will offer customers, especially small businesses that need high-performance connection to expand their networks. Also, plans are being made to standardized technologies to drive down the cost of their IT infrastructure, according to Computer Resell News.

By 'standardize', he meant Intel-based hardware, and he went on to say that Linux was the world's fastest growing operating system and the company hopes to incorporate this into their system. The PC Industry The PC industry is highly concentrated among the top vendors. In 1992, the top 10 sellers accounted for nearly half the market. From 1999 to 2002, roughly half of the market was held by only 5 vendors, which were Dell, HP, IBM, NEC and Toshiba. Dell claimed the top spot with 13.8% in 2001 while Compaq who was leading from 1994 to 2000 dropped to the second spot with 11.5%. HP retained a 7.3% share and its merger with Compaq in 2002 would give it briefly the lead over Dell with a 16.3% share.

After these firms, the next important players were IBM (6.2%), NEC (2.6%) and Toshiba (2.5%). When firms like Apple or Packard Bell failed to make the top five and are demoted to the other half of the market where there's a little piece of share to "eat", only the fittest producers would survive in this industry and thus making it difficult for newcomers to make room for themselves due to strong challenging barrier entries. Tough Challenges for Newcomers There is a small chance for new competitors to have a significant impact in the PC industry. Forecasters say that the top five vendors will hold 70% of the market in the near future. The concentration of industry sales among top vendors creates high barrier entries for new incoming firms to compete effectively and many tough challenges face them. First, there is the slowdown of sales growth in the PC industry, due to economic and political uncertainties and to the fact that the market has almost reached maturity.

There is now little room to grow and top firms are having a fierce price competition targeting small potential niches that newcomers would usually try to infiltrate to mark their presence in the market. Second, top firms have a certain number of competitive advantages that are difficult for smaller firms to acquire. For instance, small firms would be competing with reputable brands that have been around for more than 10 years. Dell, HP or IBM are all names that are associated with product quality, valuable customer service, etc. For a consumer, the purchase of a PC is an important investment, customer would much rather purchase a product from a renowned company. It took years for these companies to earn their prestigious image and it would take a similar amount of time for these newcomers to get that level.

Another competitive advantage would be the experience, knowledge and capabilities that Dell and the other companies possess. Dell's knowledge of the market enhances customer satisfaction, reduces costs and improves supply chain management. Their financial capabilities allow top firms to compete outside the home market and thus expand faster and dominate new markets in Asia or Latin America. To gain more market shares, top firms continuously seek new strategies to lower costs and to produce more innovations.

These savings turns into fuel for the price war. EMachines, a privately held company is perfect example. Located at the entry level of the market and with a strong strategy of cheap PCs (below-$800), this company is looking forward to taking the No 3 spot from Gateway, behind Dell and HP. Emachines is attempting to take away market shares from HP.

It had 11.1% in January 2000 while HP had 79.4% in the US retail market. A year later, HP's shares dropped to 68.3% while EMachines' grew to 21.3%. This shows that with a solid strategy and the right target market, it is possible to make an impact in this industry dominated by Dell and HP even though it is easier said than done. Dell vs. HP-Battle of the Titans There's a fierce and intense rivalry between Dell and Hewlett-Packard (HP) in the PC market industry for the number one spot.

From 1994 to 2000, Dell's main competitor was Compaq. This company was the largest PC seller in from 1999 to 2000. It held a 13.9% share in 1999 and 13% in 2000. Dell was just behind with market shares rising from 10.5% to 11.4% between 1999 and 2000.

In 2001, Dell finally passed its rival and took the crown with 13.8% shares while Compaq dropped to 11.5%. HP who had a secondary role so far took the third spot from IBM with 7.3% worldwide. Its merger with Compaq in May 2002 gave HP the edge over Dell with 15.1% shares. Thanks to an aggressive price strategy, Dell stayed on its heels and even managed to gain more shares with 14.8% in the second quarter of 2002. These shift in market shares reflect the different strategies used by these two giants. Most of Dell's market share comes from business sales (government, educational institutions) which dominate the first quarter of each year.

Thanks to its direct sale strategy, Dell usually surpasses HP during this period of the year. The fourth quarter of the year is traditionally ruled by holiday purchases and HP's strong presence in retail stores allows it to dominate Dell and switch the lead at the end of the year. Note that the two rivals have alternated as the world's top PC seller every quarter in 2002, signifying the strong competition between them. The first quarter was dominated by Dell. HP took the second because of its merger with Compaq.

Dell retook the third due to an intensive promotion and HP got the crown for the fourth. Analysts predicted that Dell would regain the lead in the first quarter of 2003, which did occur this year. Even though there's no clear line of domination in the fierce competition between Dell and HP, odds are in favor of Dell as a result of a strong presence and strong market share in the US market. In 2002, Dell had 29.2% share compared to 20.8% for HP. Strategies Dell has succeeded despite the current economic period thanks to a very innovative way of manufacturing. Just-in-Time inventory system is the magic behind Dell, giving it the power to become number one in the industry.

The way this system works is that it cuts inventory carrying costs by reducing inventory to an absolute minimum. Dell spends little on product research and development. It only spends $440 million a year compared to $4 billion a year at Hewlett-Packard. Yet in the entrance of one of its factories, the walls are lined with framed certificates for patents. Almost all of them are for manufacturing processes, which reveals Dell's priority. This shows that Dell basically adopts technology from its competitors and finds ways to efficiently manufacture the product and get it out to its customers in the quickest way possible.

The one thing Dell does better than anyone is efficiently make and deliver computers. Furthermore, a computer is built only after a customer orders one. This is their Build-to-Order approach. This keeps inventory costs down allowing the company to stay competitive.

Dell has no warehouses to store parts and takes delivery of parts only when it has orders that require them. This allows them to structure a short period of inventory time. It holds, on average, seven hours of inventory compared to weeks of inventory for most technology manufacturers. On the factory floor, parts and products whiz overhead on conveyors so that the right items get to the right places at the right time. Rather than have an assembly line which would rely heavily workers and increase carrying cost, Just-In-Time uses what is called, preventive maintenance. In essence they don't wait until something breaks to fix it because if that were to occur, the whole system would halt.

If the conveyor that is transporting the parts to the builders were to break down, the worker at the other end of the assembly line could not continue their task, thus increasing idle time and costs for the company. Companies that utilize this remarkable system focus on maintaining their machinery in excellent working order. Each PC or other product is built by one person, and it can be tracked back to that person if something goes wrong, making individuals accountable and keeping quality high. This factor also makes Dell superior in the market place because not ony does it shell out products much faster than other companies but it maintains the highest quality possible. For instance, workers on an assembly line would not provide the highest quality because if a product came out damaged at the other end, tracing back to the one who made the mistake would be difficult to accomplish.

It also relieves the tediousness of the assembly line which can make work repetitive and monotonous. A very important factor in the Just-in-Time system is that it inherently utilizes the Pull system which opposite to its counterpart, the Push System, is more consumer oriented and can quickly adapt to changes in consumer needs and wants. Because Dell utilizes this system it gives consumer the feeling that it is sensitive to their needs. Looking at the Push system seems like an archaic way of doing business when the companies would basically decide what the consumer needed, mass produce it, and then hire salespersons to talk them into buying it. In a sense the system creates the needs and wants of the customer. In every business where middlemen are used, prices are always increased because middle men are considered to be an additional cost.

Dell sells directly through the Web or phone -- or, in the case of corporate customers, through a direct sales force. By cutting out retailers, Dell saves money and time. As a result, Dell starts out with a 10% cost advantage over other PC makers. If costs Gateway $500 to make a computer, it only costs Dell $450.

As slackening demand has pushed prices down, Dell has sold competitively priced PCs at a profit, while HP, Gateway, IBM and others have lost money on them. When the market is declining, companies cannot hide a 10-pt disadvantage. Amidst all this, efficiency would take Dell only so far. It wouldn't fuel the kind of growth that doubles revenue in five years. The other key is Dell's ability to re-apply its super efficient model to the right products at the right time.

If other companies come out with an innovative product and Dell decides to incorporate it as its own, Dell would still remain competitive because of the low costs due to its effective business model. Strengths Online Sales Dell products can only be brought online. This is a great advantage to them because bypassing retailers can eliminate commissions and other costs that a store requires. It leverages the internet so extensively that it gets half of its business through the web. This eliminates middlemen and benefits buyers. The company's website receives 920 million page requests per quarter at 80 country sites in 27 languages and dialects, and 40 currencies.

Furthermore, since there is no third party involved, price flexibility remains high for Dell. The price that Dell originally sets for the product is guaranteed to be sold at the specified price. Its competitors cannot be as adaptable because they sell their products through physical stores. This involves additional costs and problems may arise if inventory does not move out quickly.

Relationship with Suppliers Dell maintains a strong relationship with their suppliers. This is crucial because suppliers need to be ready to ship out the necessary components in order for Dell to manufacturer their products efficiently. Thus, Dell implemented the value chain. dell. com. This is a secure extra net that acts as a portal allowing Dell suppliers to collaborate in managing the supply chain. This site allows suppliers to "see" their materials as it works it way through Dell operations. Suppliers can also log-on, drop off invoices, check engineering change orders, review negotiated and forecast ed cost reports and track their overall performance.

Through this site, Dell suppliers are able to predict upcoming demands to assist in their own planning requirements and use supply chain data to work with their own suppliers. Customer Service Dell places heavy emphasis on customer service. Since there is no middleman between Dell and its customers, the employees play an important role in purchasing. Dell tracks three major elements of the customer experience: order fulfillment, performance, and service and support. One salesperson will work with the customer until the product is delivered. If there's a problem, one support person or customer service representative will work with the customer until the problem is solved.

There's less runaround for the customer and more personal investment for the employee. Furthermore, to maintain the ongoing high levels of customer satisfaction, employees are constantly monitored through the use of various unobtrusive techniques by a third-party audit. Likewise, customers too are randomly asked to give their views on the level of services they get and how they rate them. Dell also keeps close tabs on the market. By dealing with customers directly over the phone or online, Dell gathers valuable data on purchasing habits that allow it to quickly change its products and services.

Says Dell: "One of the great things about our business is we have immediate information. We don't have to wait a week or a month or until the end of the quarter for information. We get information about our customers every single day". Incentives for Employees Dell is organized around two types of customers.

There are individual consumer sales and large corporate sales, involving storage, servers, and multiple PCs. Incentive programs vary depending on the segment, although all sales personnel are paid a combination of salary and commission. For the staffs who deal with consumer sales, rewards may range from a simple pizza party to a lavish trip. One contest awarded one-year leases on luxury cars.

There were others that gave out mountain bikes, snowmobiles and various personal watercraft's as prizes. Dell also tries to maintain company morale by touching their employees emotionally. It tries to keep its workforce aware of how Dell products can influence the world in a positive manner. For instance, the staff was informed about an international aid organization in sub-Saharan Africa that uses Dell wireless notebooks to help impoverished farmers increase their annual incomes.

Furthermore, a National Geographic expedition used Dell systems to analyze sonar data. With capturing stories like these and by publicizing them internally, Dell hopes that this will help renew employees' focus. Quality Dell ensures excellent quality in each product that they produce. Each PC or other product is built by one person, and it can be tracked back to that person if a faulty product is made, making the person responsible and ensuring excellent quality. In the company, the product should be correctly manufactured the first time.

Rigorous quality control procedures are maintained in its plants to ensure that errors are kept to a minimum. Moreover, if there are any problems with the product, there is a commitment to "fix it on time, the first time". If defects are found, the quality team will work backwards to find the source of the flaw. If, for example, it resulted from a mistake by a worker on the assembly line, then that person's work will be checked for a period of time afterwards to ensure the problem does not reoccur. Weaknesses Research and Development Dell does not invest a lot on product research and development. For example, compared with Hewlett-Packard's annual R&D budget of about $4 billion, Dell spends about $500 million dollars a year.

Furthermore, in the last quarter, Dell spent just 1 percent of revenues on R&D whereas Sun Microsystems, a technology pioneer, spent 16 percent. In an industry that values innovation, Dell relies on the original technological ideas of other companies. The company depends on the technology investments of its two biggest suppliers, Microsoft, for its new software development and Intel, for its hardware development. Such a heavy dependence may ultimately be harmful for the firm because its suppliers can offer their inventions to other competitors. One-Stop Shop One disadvantage that Dell has is that it tries to be a one-stop shop. At their website, Dell offers a variety of products that are made by other companies.

For instance, a customer can buy a Canon digital camera or an Apple Computer i Pod MP 3 player. While this may seem to be a strategy that is both efficient and convenient to the consumer, Dell runs the risk of tainting its image when something goes wrong with the suppliers. If Canon or Apple Computer runs out of stock, causing a delay in shipment, the customer may attribute this lateness to Dell, which may effect its reputation. Suppliers Dell has incorporated a strategy that forces suppliers to wait longer to get paid to cut back on costs. Its suppliers now wait on average 71 days for payment, up from 58 days two years ago. Although this may increase Dell's cash flow in the short run, the long term effect is that it may hurt the suppliers.

For example, the strain was too much for SMTC Corp., a Canadian contract manufacturer. The company terminated a deal making circuit boards for Dell this year. Dell was SMTC's biggest customer. But it dropped the deal because it Dell contracts "were not generating sufficient returns".

If Dell starts to lose its current suppliers, then it has the task of looking for new ones and building new relationships. Opportunities Even though Dell has achieved the prestigious status of being the Top 5 PC Company for the global market, it still has not reached the "plateau" of its enterprise, where it begins to level off. Dell has much room for potential growth. One market that the company has not fully penetrated is the retail market.

Retail Business Dell has realized that many opportunities lie within retail. This is why Dell has made an alliance with leading independent software vendors (ISVs). The firm has developed relationships with ISVs to assist retail customers in reducing costs and in managing their store operations more efficiently. The software that they will produce combined with Dell desktops and servers will help to automate store operations, which include customer sales transactions, inventory management, payments, accounting, customer data and communications.

If Dell continues this path and eventually incorporates into the retail industry, there will be many other markets that Dell can go into. Printers Dell has recently partnered with Lexmark in selling printers made by Lexmark. By entering this market, the company can expand its resources. Stepping into the printer industry was a smart strategy, because it comes with a profitable consumables market.

Producing printers also allows Dell to consider the long range of products, from ink jets to photo sheets, that they can provide to their consumers. Furthermore, the company offers good technological service that enable customers to remain loyal to Dell branded cartridges. Software that ships with the printer includes a feature that allows users to know how much ink is left, warns when it is too low and lets them click directly to Dell's website to re-order. Shipping on consumables is also free. Market in China Dell is also currently shifting its attention away from the saturated American PC market to the potentially profitable country of China. This is a place where a small niche in the market can generate into huge returns.

Since Internet use has not been widely adopted in China yet, Dell has deviated from its plans to obtain customers through its e-commerce website. Instead, the company is setting up demonstration booths in malls, similar to the kiosks that will be coming out soon in Sears. The kiosks will not stock computers, but it will offer consumers a chance to test out the products before placing orders. If Dell is able to penetrate into China's market, there are a lot of opportunities in the consumer sector, large businesses and in organizations. Dell is China's third-largest selling PC brand last year, therefore, the company should be able to gain a stronghold in the country with relative ease. Threats Market Decline The PC market seems to be slowly declining.

As the increase on next generation computers and electronic devices are being introduced to the market, the demands for PCs are decreasing. Part of the reason is that consumers seem to be leaning towards the use of lab tops. For instance, more corporations are allocating notebooks to its employees rather than assigning them a PC to sit next to. Smith Barney estimates that shipments of desktops units will grow 3%, but notebooks will jump to 17%. Also, there are more new inventions that involve portable and smaller gadgets, made by new companies, that have the computing power to do some of the tasks that were traditionally done by the PCs. A PC is not needed anymore to surf the web, check our e-mails, play online games or watch interactive TV.

Competition Dell is also in constant competition against other technological giants. Hewlett Packard, IBM, and Dell are constantly battling for market share. For instance, HP has been increasing its direct sales in response to Dell's growing market share in personal computers and low-end servers. Furthermore, Dell may be opening itself to other threats by spreading itself too thin. Dell has recently entered the PDA, printer and networking equipment segment in the same period.

They are competing with other companies that have already established their expertise and capabilities in these markets. Dell has yet to demonstrate their skills in these areas. Economic Downturns Dell has also been affected by world economic downturns. The war with Iraq combined with a weak economy has had an adverse impact on IT spending. These economic conditions have kept technology markets down. As a result, the life cycle for existing large systems was extended and corporate buyers delayed purchases of high-end equipment.

Moreover, macroeconomic threats are difficult to predict. Tariffs, trade barriers, and currency fluctuations can affect the operations of any company, as well as, the market and consumer demand in specific countries regardless of the actions of corporations. Recommendations Personal computers might not be the future of computing. Given this, Dell should consider expanding its markets in a timely manner so that it will not spread itself too thin over too many projects. Dell should increase its research in other technologies, such as, cell phone software and game consoles. Since cell phones have become almost a necessity in today's business world, Dell should invest more emphasis in this market.

The company can implement a similar method that it is currently using with Lexmark. Dell can partner with a cell phone producer and provide them with the necessary software for their products. A probable company that Dell can join with is Samsung. Since Samsung is the ranks number three in worldwide market sales, this shows that it is a mid-sized profitable firm. A joint venture between Samsung and Dell could benefit both corporations. Dell has recently launched a new PC, the Dimension XPS, which is geared towards gamers.

Since Dell is trying to diversify its product mix, it should also consider the idea of manufacturing game consoles. The video game industry shows much potential growth. Dell should try to penetrate this market if the XPS system is successful, which would help to establish their brand in the gaming business. Dell can also consider forming a consulting division. Both HP and IBM offer their own IT consulting services to provide businesses with the technological assistance that they need. Dell has already gained a strong status in the computer industry, and it has honed and proven its capabilities and credibility.

The company can help clients solve their business issues by exploiting their own IT technology and promote their products. In light of this, it should not have a problem acquiring corporate businesses. Conclusion Michael Dell, a renown entrepreneur, has successfully launched his business to become a global firm. Established in 1984, the Dell Computer Corporation has managed to achieve the highest worldwide market share in 2003. By implementing his innovative strategies, such as direct selling and Just-in-Time, Dell has met success upon success. Furthermore, no other company has managed to apply these methods profitably.

By using efficiency and mass customization, Dell has managed to surpass the tough competitive obstacles and reach the pinnacle of the market. Although there are still certain problems that the company needs to address, Dell has gained many accomplishments within a decade. Most might say that Dell has reached its peak and that it should be heading towards the downward slope of its business. However, by expanding its product mix and diversifying, Dell can encounter many growing opportunities. Dell has proven successful at diversifying in the past, from its expansion in the server, services and storage markets, to PDAs and projectors, there is no doubt that the success will carry on. As an established firm, the company has much room to expand.

With increasing prospects in different markets, the road does not end here for Dell.

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