Dell Inc., currently a US$60 billion company, was started by Michael Dell in 1984 when he was an undergraduate student at the University of Texas, in the United States. Within two decades, Dell, with headquarters in Round Rock, Texas, grew to become one of the world’s great computer companies, with near leading shares in the personal computer (PC) and server markets. Nearly 65 per cent of its revenue originated in North and South America; 23 per cent in Europe, the Middle East and Africa; and 12 per cent in the Asia–Pacific region. In 2003, a year in which most computer makers lost money due to slumping global demand for PCs, Dell saw its annual revenues jump by US$5 billion to US$36 billion, made US$2.8 billion in operating profit, and gained 2.3 per cent in global market share. By this time Dell had gained, and held for five years, the position of market-share leader. However, during the mid to late 2000s, Dell’s position in the global PC market began to change. In 2005 it lost its market-share lead to one of its main rivals, Hewlett-Packard. By 2008–9, Dell’s second-place PC ranking came under threat from the Taiwanese computer maker Acer. In 2003, Acer had ranked seventh in PC sales around the world, but by 2008–9 Acer’s share of the global market had risen to 11.8 per cent, just behind Dell with 13.7 per cent and HP still on top with 19.6 per cent.

The hallmarks of Dell’s early success in the PC market were direct selling and build-to-order manufacturing, underpinned by supply chain and inventory efficiencies. Dell’s cost structure was the lowest in the industry. Dell grew quickly by giving customers exactly what they wanted at a price that no other competitor could match at the time.
While Dell outsourced some operations—for example, component production and express shipping—it assembled its computers in its own manufacturing plants. In addition to its four