Dell Inc. Case Study
Michael Dell, a gifted entrepreneur at the age of 13 began a quest to make money through stamp collecting and trading then expanded to a national catalog business that earned him close to $2000 per month. Not knowing at that time that by 1984 he would be starting his own company with as little as $1000 in startup capital and would go on to grow his own business with a gross profit of $11,671 million as of February 2008.
In 1984 Michael Dell founded his company on a simple concept of selling computer systems directly to the customers, he felt that he could best understand the needs and provide the most effective computing solutions to meet those needs. He registered first started his business under the name of PC’s Unlimited, a company first in the industry to sell custom-built computers directly to the customers. With Dell’s first computer system of its own design in 1985 and by offering risk-free returns and next-day, at home product assistance, Dell was able to establish the customer experience and offer personal service. In 1987 Michael Dell renamed his company to Dell Computer and added and international sales office. With new management changes, the company then started selling to larger customers and government agencies in 1988. Within four years after the company’s founding, Dell increased the market capitalization of the company from $1,000 to $85 million.
In the 1990’s Dell shifted to larger operations by distributing in retail outlets in the U.S. and Latin America; however, by 1994 Michael Dell realized that the profit margins associated with selling through retail distribution were too tight. With this revelation, the company discontinued retail sales to refocus on direct sales efforts. It was this same year that Dell b ...