...Dell evolution Dell strategy past to present Daniel Spanier, Alexandra Bielková About the Presenters Daniel Spanier Alexandra Bielková Education: Education: Bachelors of Economics and International Management 6 Sigma Green Belt Certified Masters in Maths & Mgmt, Comenius University, 2002 PhD in Mathematics, Comenius University Work experience Dell: Work experience Dell: Finance Director – Commercial ESG Finance Director – EMEA FP&A Controller– EMEA Services Call Centers Services Globalization and Liberty Lead Americas Support Services Team Lead Worldwide Operations - Manufacturing North America PA FP&A Services FP&A manager Western EMEA FP&A EMEA RUM Forecast Coordinator OPEX controlling & consolidation EMEA Fin Systems Training 2 Agenda Dell strategy past to present Dell History Strategy Dell direct model Dell.com Dell embracing the channel Strategy shift 1) Going private – change in strategy? 2) 3 1) http://techaisle.com/blog/2012/04/dell-confirms-its-position-as-an-end-to-end-solutions-company/ 2) http://www.forbes.com/sites/connieguglielmo/2013/10/30/you-wont-have-michael-dell-to-kick-around-anymore/ Dell History 4 Dell Timeline 1986 1989 1988 1984 Industry's fastest performing PC (12MHz, 286based system) M. Dell founded company 5 1st Dell™ laptop computer, the 316LT Dell completes its initial public offering http://www.dell.com/learn/us/en/uscorp1/about-dell-company-timeline ...
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...1.0 INTRODUCTION: 1.1BRIEF ABOUT DELL: Dell was established in 1984 by Michael Dell. It is based in Texas, USA. It sells laptops, personal computers, cameras, printers, and related products and software. Dell is very well-known for its direct-sales model and its “configure to order” way of supply, where customers can have their own order with required specifications and got it delivered at their place. Recently, Dell gave more focus to IT services and software. By 2012, Dell established a new software group and focus on four areas: end user computing, enterprise solutions, software and services Table 1: Basic Information about Dell Basic Information about Dell Name Nature of Business Dell Inc. Computers, IT and related software and products 1. Individual users with low income who appreciates technology such as students, small Target Customers home office users and so forth. 2. Large to mid-size businesses. Main Competitors locally & Globally Sony, Samsung, Apple Inc, Lenovo, Fujitsu, HP, IBM, 1 Intel, Seagate, Best Buy, SGI, SMCI, CRAY, CUDA, CSCO, CDW, FIO, IN, Acer, Toshipa. Marketing Strategy Innovative Direct Model Build-to-order approach. 1.2 FINANCIAL SITUATION: From graph 1 we may see that Dell is doing well enough through the last 4 years. Its revenues, expenses and profit are quite stable. It’s notable that revenues grew dramatically between 2010 and 2011. Revenues dropped again in 2013. Graph 1: Performance of Dell 2010-2013 ($ billions) 70,000 60,000...
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...Managerial Finance Reflection Essay 5th July, 2015 DELL’S WORKING CAPITAL Dell computer Corporation, a company with a Build-to-order manufacturing system, focused mainly on selling directly to the customers. It was their Core Strategy. The company has reported impressive growth in FY-1996 and is predicting a future growth of 20% annually. Positive Inferences - DELL The primary advantage for the growth of the company is their Inventory Management. It followed the build-to-order strategy which resulted in Low Finished goods inventory. The Days Supply of inventory for Dell is the lowest in the industry. (ALSO A NEGATIVE EFFECT) DSI Dell Apple Compaq IBM 1993 55 52 72 64 1994 33 85 60 57 1995 32 54 73 48 Also, when we consider the income statement of the Company, it becomes clear that the company is growing in terms of its SALES per annum. The sales of the company have grown by 83% from 1992-1996. Income Statement - DELL Sales COGS Gross Margin Op. exp income financing tax net profit 1996 1995 1992 1996-‐1992 5296 100.00% 3475 100 890 100 4406 4229 79.85% 2737 78.76% 608 68.31% 3621 1067 20.15% 738 21.24% 282 31.69% 785 690 13.03% 489 14.07% 215 24.16% 475 377 7.12% 249 7.17% 67 7.53% 310 6 0.11% -‐36 -‐1.04% 7 0.79% -‐1 111 2.10% 64 1.84% 23 2.58% 88 272 5.14% 149 4.29% 51 5.73% 221 83.19% 11.54% -‐11.54% -‐11.13% -‐0.41% -‐0.67% -‐0.49% -‐0.59% The rate of...
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...of the booming computer industry, Dell needs to come up with a plan to finance the future growth. II. Dell Computer Corporation, founded in 1984, designed, manufactured, sold, and serviced high performance personal computers (PC’s). Its core strategy, and advantage over competitors, was selling directly to customers. In 1996, Dell reported an impressive growth in sales of 52%. III. We forecasted, using the percent of sales method, for the next three years financial statements and we have done two analyses. First by increasing sales 20% and the other we increased sales by 50%. The financial ratios of our pro forma were also calculated. All these information were used to figure out the Additional Fund Needed (AFN). Our final results came with negative AFN which means that Is this essay helpful? Upgrade your account to read more and access more than 650,000 just like it! GET BETTER GRADES the company doesn’t need external financing. IV. As we have seen in our analysis, Dell has it all worked out. By using its inventory system accurately, the company has more than enough resources to finance its growth internally and without any need for external financing. Moreover the company, using its internal funds, can payout its long term debt and increase its dividend policy without affecting its growth and future expansion potentials. Dell Computer Corporation Company Background Dell Computer Corporation was founded by Michael Dell in 1984. The company designed, manufactured...
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...Dell Inc. Tanner Dean Ashford Managerial Accounting BUS 630 Instructor Aisha Meeks March 05, 2012 Dell Inc. Dell, a Delaware corporation, was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs (Dell, 2005, p. 1). Dell Inc., with fiscal 2011 net revenue of $61.5 billion, is a premier provider of products and services worldwide that enable customers to build their information-technology and Internet infrastructures (Yahoo Finance, 2012). Dell offers a broad range of enterprise systems (servers, storage, workstations, and networking products), client systems (notebook and desktop computer systems), printing and imaging systems, software and peripherals, and global services. During calendar 2004, Dell was the number one supplier of personal computer systems worldwide as well as in the United States. Dell’s global market leadership is the result of a persistent focus on delivering the best possible customer experience by selling products and services directly to customers (Dell, 2005, p. 1). By selling products directly to the customer, Dell has developed a marketplace niche and strategy for itself that has enabled it to remain relevant and successful. Dell’s business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis...
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...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing...
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...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing the time required...
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...By controlling for the effect of firm size on the level of performance, ratios enable financial statement users to examine how a firm has performed relative to its peers and relative to its own historical performance. A firm’s ratios can differ from its peers or its own historical performance because it has selected a different product market strategy, because its management team has become more effective at implementing its strategy, or because it has selected a different financial strategy. Of course, as we have seen throughout the course, sometimes firms can appear to perform differently because they have selected different accounting methods for reporting the same underlying economic events. For this reason, a precursor to effective financial ratio analysis is the development of a clear understanding of how a firm’s accounting decisions compare with those of its competitors, or with its own decisions in prior years. If there are important differences in accounting decisions, it may be necessary to make adjustments to the affected firms’ financial statements to ensure that ratio comparisons isolate differences in strategy or performance. Common adjustments include: treating operating leases as capital leases; adjusting LIFO inventories to a FIFO basis; changing the write-off period of intangible assets; restating reserves and charges for bad debts warranties and product returns; recognizing the possible impact of unrecognized potential contingent liabilities; revaluing ...
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...lead to increase the market share, and to take advantage of the booming computer industry, Dell needs to come up with a plan to finance the future growth. II. Dell Computer Corporation, founded in 1984, designed, manufactured, sold, and serviced high performance personal computers (PC’s). Its core strategy, and advantage over competitors, was selling directly to customers. In 1996, Dell reported an impressive growth in sales of 52%. III. We forecasted, using the percent of sales method, for the next three years financial statements and we have done two analyses. First by increasing sales 20% and the other we increased sales by 50%. The financial ratios of our pro forma were also calculated. All these information were used to figure out the Additional Fund Needed (AFN). Our final results came with negative AFN which means that the company doesn’t need external financing. IV. As we have seen in our analysis, Dell has it all worked out. By using its inventory system accurately, the company has more than enough resources to finance its growth internally and without any need for external financing. Moreover the company, using its internal funds, can payout its long term debt and increase its dividend policy without affecting its growth and future expansion potentials. Dell Computer Corporation Company Background Dell Computer Corporation was founded by Michael Dell in 1984. The company designed, manufactured, sold, and serviced high performance personal computers...
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...about $ 1,687 billion from 2010. In 2011 the most active regions were USA, Canada and Latin America with 45% from the total revenue while the least active region was Asia-Pacific with 19% only. Personal system group achieved 31% of the total revenue, while there was lack in sales of HP software with only 3% of the total revenue. After reviewing income statement of 2011 it seems that HP has passed through up and down periods from first quarter were revenue was $ 32.3 billion then it been decreased during second and third quarter to $ 31.6 billion, to get increased again to $ 32.1 billion at the fourth quarter. In comparing to its competitors DELL and International Business Machines (IBM), HP registers the highest of revenue amount with $127.2 billion, while revenues for its competitors were $ 61,494 billion and $ 106, 916 billion for DELL and IBM respectively. However, when it comes to the net income HP comes behind IBM. Whereas, the net income of HP during 2011 is around 5.5% of the total revenue, according to Forbes the net...
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...PROCESS OF DELL. EXECUTIVE SUMMARY Every organisation has different processes it uses to be successful and there are some that are quite essential for a business to identify what it is doing right and what it is not doing. Through this process clearly analysed in Dell Corporation in this report it is able to help a business grow, and thus by identifying all this factors a business is able to make starategic decisions on what is best for the business and develop goals that will help move the company forward. So by looking at Dell we will be able to identify all this important processes and thus run a successful business. INTRODUCTION. Dell which was formed by Michael Dell in his university dorm room as shown in http://www.bizface.co.uk/bizfaceforum/blogs-leading-articles/43905-famous-dell-case-study-finance-case-study-dell-s-dilemma-brazil-del.html in 1984 when he was only 19years and is now one of the biggest computer seller worldwide. It has over 100,000 employees in the world and sells 110,000 systems daily to over 180 countries. In its’ second quarter of the fiscal year ended 30th June 2010, dell generated a net income of $545 million. All this huge figures just show how big a corporation dell is and many may ask what were the factors that attributed to this dells’ success. There are a number of factors that attribute to dells success and according to http://ivythesis.typepad.com/term_paper_topics/2008/02/dell-strategic.html the main ones being; • Dells direct model...
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...Dell Inc: From Humble Beginnings to Computer Giant When you make the decision to purchase a computer, whether it is a tablet, desktop or laptop, the next choice is to select the company, and one of the candidates may very be Dell. Dell is a company that came from humble beginnings, the brainchild of the technologically savvy mind of Michael Dell in 1983 in his dorm room at the University of Texas. Michael Dell enrolled in the pre-med program at the urging of his parents who had a desire from him to become a doctor. Within the first year he was earning $80,000 per month, which prompted him to drop out of school and begin his company entitled PC's LTD, selling PC's and PC components (MHHE.com, 1999). The strategy he employed was one of creating and distributing his IBM compatible clones directly to the consumer, cutting out the large retail mark-up. This strategy was so successful, that by the end of the fiscal year 1986, his sales had reached $33 million dollars. This paper will examine Dell Inc., their financial ratios and plans for the future and whether it is a reasonable choice for potential investors. The company that was started in a dorm room in Texas, grew fast, but Mr. Dell soon realized there was areas lacking that would be needed if he were to achieve his goal, which to become one of the top 3 PC companies in the world (MHHE.com, 1999). During the next several years, however, PCs Ltd. was hampered by a lack of money, people, and resources. Michael Dell sought to...
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...DELL'S STRATEGY IS AN UNCONVENTIONAL APPROACH. • 1984 The company becomes the first in the industry to sell custom-built computers directly to end-users, bypassing the dominant system of using computer resellers to sell mass-produced computers. • 1986 Dell unveils the industry's fastest-performing computer, pioneers the industry's first thirty-day money back guarantee, and offers the industry's first onsite service program. • 1996 The company's quiet bid to sell custom-built computers over the Internet quickly becomes a public revolution when the company announces that sales over www.dell.com have exceeded $1 million per day. Dell introduces also its first custom custom-made web links for customers. Called "Premier Pages", the links allow customers to tap directly into the company's own service and support databases. 1998 Dell establishes web-based connections with its suppliers to speed the flow of inventory and quality information ================================ THE THREE GOLDEN DELL RULES Disdain inventory Always listen to the customer Never sell indirect ===================================== DELL COMPETITIVE STRATEGIES • Speed to market • Superior customer service • A fierce commitment to producing consistently high quality, custom-made computer systems that provide the highest performance and the latest relevant technology to the customers An early exploitation of the INTERNET. ========================================== ...
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...Executive Summary This paper provides the historical background and financial data of two of the leading information technology (IT) corporations in the United States. Going beyond their humble beginnings to the present, an analysis is made of their current financial performance. This serves to compare and contrast the differing business strategies of the two financial juggernauts. The two companies are direct competitors in the IT market place. Developing cutting edge software that is futuristic and enticing is what Apple does best. Apple has the ability to offer a diverse product line that caters to a wide variety of consumers, especially tech savvy earlier adapters. Dell’s marketing approach is to create a product line that is affordable and easily used by the general computing public. Audit reports, ratios, cash flows and income statements are analyzed to gain a clearer picture of which marketing strategy is proving to be the more successful. Corporate Histories and Strategies: In 1976, high school friends Steven Jobs and Stephen Wozniak shared a common love and interest in electronics. In their early stages, Apple I & II were designed as a hobby. Apple I was actually created in Steven’s bedroom. “They would showcase the computers at the Homebrew Computer Club (of which they were members) as a demonstration (Apple Museum, 2011)”. The highlights were the video screens, and the fact that it used few chips...
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...inventory ratio of 15 might seem a bit high, although the denominator of the current liability to inventory ratio is inventory and it is really low. It’s really hard to compare the company to the industry average because there is no other company that handles its inventory like Dell does. The company’s operation ratio expense is 12.64, way below compare to their industry do to their very low inventory. Assets Utilization: Asset utilization is vital to the success of an organization, the way assets are used within the organization is their biggest and strongest strategy making Dell a leader in its industry. A reflection of this strategy is their impressive inventory turnover ratio of 45.45. Unlike the industry average low numbers on the rest of the asset utilization ratios such as fixed assets turnover, total assets ratio and asset to equity ratio, Dell’s average 50% higher than its competitors. Profitability: Dell has been successful due to its differentiated strategy compared to its competitors. The Direct Model' that Dell adopted has been highly successful in reducing its bottom line costs. By this its return on asset ratio is 9.2% and an extraordinary return on equity ratio of closed to 50%, Dell,...
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