Dell Computer Corporation Dell Computer Corporation is a premier provider of computer products and services, founded in 1984 on a simple
concept of selling computer systems directly to customers. This direct business model is designed to eliminate retailers that add unnecessary time and cost, or can diminish Dell!s understanding of customer e"pectations and allo#s the company to build systems to order. $ver the past fe# years Dell has gro#n from number five in the personal computer mar%et to number one at the end of &''& (see table 1 belo#). *uch of that gro#th came in the %ey +, mar%et #here Dell improved its share from &4.1 to &9.& percent in 1& months at the e"pense of close rivals -. and /ate#ay (source0 1DC). 2s a measure of added shareholder value, a 31'' invested in Dell stoc% on flotation in 1988, #as #orth 3&8,4'' by the end of the firm s financial year in 5ebruary &''&. Table 1 Top Five PC Computer Companies (2002)
Computers ,old (m) Dell HP IBM Fujitsu N C
Source0 1DC, &'''
.C *ar%et ,hare /ro#th (&''1) (6) (6) 18.' 17.7 8.' 4.4 4.4 &4.4 9 4.9 9&.& 8.' 17.'
7.&& 7.'4 1.98 1.49 1.'8
The company s rise to mar%et leadership is reputed to be as a the result of a persistent focus on delivering the best possible customer e"perience by directly selling computing products and services based on industry9standard technology. The absence of shops and middlemen means Dell can sell its goods more cheaply than rivals. 1t is a structural advantage that Dell s main competitors, -e#lett9.ac%ard and 1:*, do not have. The company builds to order and has fo9 cused on mar%ets #here there is high volume and standardised technology. Thus, Dell s research and development budget is relatively small (37''m) and d#arfed by its rivals. 2lso, #hile for e"ample, 2pple drives sales #ith product innovation, Dell does so #ith its business model (see belo#).
Dell Pro!u"ts
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1n addition to supplying noteboo# an! !es#top "omputers, including monitors, peripherals and soft#are), Dell had recently moved into the areas of0 $ervers for business9critical applications, including e9mail, database and high9performance computing environments. $tora%e pro!u"ts to protect vital data. $&it"'es in the form of standards9based net#or% s#itches that connect computers and servers in small9 to medium9si;ed net#or%s or in the branch offices of larger organi;ations. (or#stations for highly9comple" applications, such as three9dimensional computer9aided design, digital content creation, soft#are development and financial<economic modelling.
(orl!&i!e )perations an! *lobal Mar#ets
The company manufactures its computer systems in si" locations0 2ustin, Te"as= >ashville, Tenn.= ?ldorado do ,ul, :ra;il (2mericas)= @imeric%, 1reland (?urope, *iddle ?ast and 2frica)= .enang, *alaysia (2sia .acific and Aapan) and Biamen, China (China). Dell Asia Pacific Japan is headCuartered in ,ingapore and Aapan and has operating subsidiaries in0 2ustralia, China, Aapan, Dorea, -ong Dong, 1ndia, Tai#an, *alaysia, >e# Eealand, ,ingapore and Thailand. Dell Europe, Middle East and Africa region is headCuartered in the +nited Dingdom #ith $perating subsidiaries in0 2ustria, :elgium, C;ech Fepublic, Denmar%, 5inland, 5rance, /ermany, /reece, 1reland, 1taly, the >etherlands, >or#ay, .oland, ,outh 2frica, ,pain, ,#eden, ,#it;erland and +nited 2rab ?mirates.
Dell+s C'airman an! C )
-ead of Dell Computer Corporation and a self9made billionaire, is *ichael Dell (born 1987), #ho began training for a career in medicine but abandoned his studies in his first year #hen he first recognised the opportunity for the business. The most surprising thing about him is that despite all his success, *ichael Dell lives in a state of apprehension.
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G2s a general principle 1 live in fear of ne# technologies, ne# competitors, ne# things that may occur. 1n my case the fear motivates us to continue to ma%e sure #e do the things #e need to do to continue to succeed. 1 am Cuite confident that #e #ill succeed but 1 also have this fear that lives #ith me all the timeH.1t #as even greater #hen 1 started. 1 didn t have any confidence. Ie have a little confidence no# because #e have enJoyed some success and #e %no# more about the sustainability of our business than #e did 18 years ago.K (Sunday Times, 1 December, &''&) *ichael Dell believes that one of the challenges for a company that is succeeding, is running the ris% of complacency and pulling bac% from its #inning #ays. -e and Devin Follins, (chief operating officer) have al#ays striven to lay out the opportunities and to tal% about #hat needs to happen in the future, rather than #hat has already happened. 1n this #ay they set challenges for themselves, #hich then become challenges for the #hole organisation. 1nterestingly, *ichael Dell admits that he dra#s a lot of inspiration from ,am Ialton (founder of Ial9*art, the 2merican retail chain) #ho started his company #hen he #as 44 years old.
T'e Dell Business Mo!el
Dell s direct model starts and ends #ith its customers and ta%es five basic tenets as follo#s0 Most ,,i"ient Pat' to t'e Customer :ased on a belief that the most efficient path to the customer is through a direct relationship, #ith no intermediaries to add confusion and cost. $in%le Point o, -""ountabilit. 2 recognition that technology can be comple", so a need to #or% to %eep things simple. Buil!/to/)r!er To provide customers e"actly #hat they #ant in their computer systems, through easy custom configuration and ordering. 0o&/Cost 0ea!er Focusing resources on what matters to customers
The result of this model for e"ample, is reflected in the activities carried out at the Dell manufacturing plant in Found Foc%, Just north of 2ustin, Te"as in the +nited ,tates. -ere, an empty computer bo" starts off at one end of an automated and highly efficient factory line and moves do#n it, having various parts added along the #ay until a completed computer arrives at the other end, pac%ed in a Dell bo" and transported on its Journey to the customer. Ihen the system is #or%ing #ell, it can be Just 9' minutes from the time the order is placed for the computer on ###.dell.com, to the time it begins its Journey through the factory. ,uppliers have built their factories close by, inventory is do#n to an incredible four days and efficiency is the %ey ingredient.
Sales Performance (Adapted in part from Company Report, 2002)
2bout 1,7'' ne# business customers in the +nited ,tates did business #ith Dell in each Cuarter of &''&, helping the company regain the >o. 1 #orld#ide share ran%ing as it increased global share year9over9year to 17.86 for total .C shipments (see 2ppendi" 1 for financial details). -o#ever, Dell!s fiscal &''& #as unli%e any year in its history. Demand for computer systems and services declined for the first time in many years amid global economic #ea%ness. To manage costs and appropriately si;e #or% force in changing conditions, the company carried out its first Job reductions. 1n spite of a slo#ing economy Del1 s managed to %eep sales gro#ing #hile 1T spending had slumped. The company improved its #orld#ide mar%et share from 14.7 percent in &''1 to 18 percent in the third Cuarter of &''&. 1n ?urope, #here resellers #ere still dominant, the firm had 1'.7 percent share, up from 9.L percent in &''1. Des%top computers made up over half of the company s sales M 7& percent in the third Cuarter 9 #ith noteboo%s at &86 and enterprise (servers, storage and soft#are products for businesses) at &' percent. ?nterprise #as e"pected to drive the gro#th of the business. :usinesses made Dell the leading vendor in the +.,. for @inu" and Iindo#s on 1ntel9based servers in the third Cuarter of &''&, and the strength of Dell!s relationship #ith ?*C resulted in
more than 1,7'' Dell<?*C installations by the partnership s first anniversary in $ctober &''&. Dell s &''& third9Cuarter shipment gro#th outperformed industry averages in all product categories, including servers. Deployment of standards9based Dell servers in supercomputing clusters running on the Iindo#s or @inu" operating systems, #hile relatively small, sa# rapid increase. Fesearch by 1nternational Data Corp. sho#ed the company #as the leading provider of @inu"9based server clusters during the first half of the year, #ith about 4' percent of the global mar%et (1DC) ,ales of e"ternal storage systems increased L4 percent and continue on an annual run rate of more than 31 billion. 1n the first year of a partnership bet#een the t#o companies, more than 1,7'' customers purchased Dell N ?*C storage systems. Demand for related enterprise products and services gre# strongly. ?ngagements by Dell .rofessional ,ervices more than doubled year9 over9year, as the company continued to e"pand its services capabilities. Oolumes of Dell .recision #or%stations increased &L percent #orld#ide, 4L percent in the +nited ,tates. ,hipments of Inspiron and Latitude noteboo% computers #ere up &8 percent in the Cuarter, more than t#ice the rate of the rest of the industry. ,hipments in four strategically important national mar%ets9China, 5rance, /ermany and Aapan9rose a combined 4' percent in the Cuarter, as Dell significantly outpaced the rest of the industry in every region. 2mericas volumes #ere up 44 percent, higher still in @atin 2merica, #here shipments in *e"ico more than doubled from one year ago. 1n the +nited ,tates, shipments rose 44 percent= #ithout Dell, volumes #ere up & percent. ,ystems sold to +.,. businesses gre# &L percent, #hile total shipments to government and education customers increased &8 percent, and those to consumers surged 71 percent. Dell s &89percent unit gro#th in 2sia9.acific and Aapan #as more than three times the rate of the rest of the industry. The competitive gap #as similarly profound in servers. Dell volumes in the region rose &' percent, versus an average 1 percent for others. Total company shipments #ere up 4& percent in China, and 47 percent in Aapan.
Combined Dell shipments in ?urope, the *iddle ?ast and 2frica (?*?2) increased 14 percent= the industry #ithout Dell #as up 7 percent. The company!s regional server gro#th #as three times that of the rest of the industry, led by a 8'9percent surge in /ermany. Computer systems sold to consumers and small businesses in ?*?2 #ere &8 percent higher. Dell s revenue as a percentage by region in &''& #as as follo#s0 Table 2 1evenue b. 1e%ion
Q3 Q2 73 18 9 Q1 70 20 10
Americas Europe/Middle East/Africa Asia Pacific - apan
72 19 9
$our"e2 Compan. 1eport3 2002
Dell an! t'e Internet
Dell is ac%no#ledged as the largest online commercial seller of computer systems. The company is also redefining the role of the Ieb in delivering faster, better and more convenient service to customers. Dell launched ###.dell.com in 1994 and added e9commerce capability in 1998. The follo#ing year, Dell became the first company to record 31 million in online sales. The company s #ebsite, based on *icrosoft Iindo#s operating systems, received 9&' million page reCuests per Cuarter (in &''&) at 8' country sites in &L languages<dialects and 4' currencies
The company is increasingly realising 1nternet9associated efficiencies throughout its business, including procurement, customer support and relationship management. 2t www.dell.com, customers may revie#, configure and price systems #ithin Dell!s entire product line= order systems online= and trac% orders from manufacturing through shipping. 2t aluec!ain.dell.com, Dell shares information #ith its suppliers on a range of topics, including product Cuality and inventory. Dell also uses the 1nternet to deliver industry9leading customer services. 5or instance, thousands of business and institutional customers #orld#ide use Dell!s .remier Dell.com Ieb pages to do business #ith the company online (see 2ppendi" 7 for further information).
)bje"tives an! Tar%ets
Dell!s stated obligation to customers is to Ginnovate products and services that deliver great value, and our people are doing that #ith e"ceptional s%ill and efficiencyP #hile continuing to differentiate Dell from other companies. 2ttention is also directed to demonstrating a solid balance bet#een its long term priorities of liCuidity, profitability and gro#th. 5urthermore, the company sees e"panding operating profit over time as a primary and attainable obJective Dell s stated ambition #as to double annual revenues to 38'bn by &''L and to achieve this target, the company had planned to e"pand into printers, handheld devices and unbranded 9#hite bo" 9 .Cs. The G#hite bo"K mar%et #as estimated at 34bn a year in sales, and in the gro#ing hand9held mar%et, Dell aimed to produce a product that #ould retail at 3&99, undercutting -. by 3&''. The company s primary mar%et #as Judged to be maturing and these ne# product areas appeared to enhance Dell s future prospects. 5or e"ample at -e#lett9.ac%ard (-.), printers made oper9 ating profits of around 3&.8bn in &''&, #hereas Just 196 of Dell s 34&bn in revenues came from non9.C business. 1n ,eptember &''&, Dell signed a deal #ith @e"mar% to produce Dell branded printers and in% cartridges. The main opportunity ho#ever, #as considered to be the corporate solutions mar%et, offering servers, storage and services. 1nterestingly, the solutions mar%et #as behind the revival of 1:* during the 199's and #as a %ey consideration of the -. and CompaC merger (see belo#). >onetheless, it #as also the mar%et segment that probably reCuired the biggest shift for Dell and possibly posed the biggest ris%. To successfully handle all the data needs of a large organisation reCuires the ability to offer a broad spectrum of products and vast bac%9up resources and consultants.
Costs
Dell %ept costs at a minimum 9 about 1'6 of revenues compared #ith &16 at -. 9 partly through buying components in huge volumes at lo#er prices. ,uppliers are also as%ed to locate #ithin a fe# miles so that parts can be delivered Just hours ahead of being needed. GThe short story is that they (Dell) have maintained a lo#9cost position in an increasingly commoditised mar%et. The company follo#s a model of operational e"cellence. Their fortress is built from many little bric%s instead of one big idea. There is a lot of fine tuning and attention to detail.K (T!e "uardian &9 $ctober, &''&).
Dell Customers an! 1elations'ips
1n $ctober &''&, ?D, selected Dell as its global provider of 1ntel9based servers, noteboo% and des%top computers to standardi;e computing hard#are and soft#are for more than 1'',''' employees in 8' countries #orld#ide. 1n the same period, Dell announced that Co" Communications, 1nc., one of the nation!s leading broadband communication companies serving 8.4 million customers, e"panded its relationship #ith Dell by installing eight Dell<?*C storage area net#or%s (,2>s) in data centres across the country. Dell systems also moved into global la# firms such as .aul, -astings, Aanofs%y Q Ial%er @@. and Dorsey Q Ihitney @@., as #ell as retail chains including ,ears, Foebuc% and Co. and ,elect Comfort. 1n the entertainment and sports industries, Dell servers played an important role in 1*2B!s digital re9mastering of +niversal .ictures! and 1magine ?ntertainment!s Apollo #$% T!e IMA& E'perience, #hile a Dell<?*C ,2> moved into the data center at Creative 2rtists 2gency (C22), the #orld!s premier talent and literary agency. Dell became the official des%top, noteboo% and server of the >:2 and I>:2 in $ctober. 1DC estimates that Dell installed more than &&,''' $racle databases in &''&. Dell also completed more than &'' high9performance computing cluster installations at businesses and institutions around the #orld.
T'e HP / Compa4 Mer%er
2 merger bet#een -e#lett9.ac%ard and CompaC Computer Corporation M both of the +, M #as agreed in *ay &''&! ran%ing the combined company number one in sales of .Cs and servers and rivalling leader 1:* in the services sector.
-. officials e"pected to complete the integration of CompaC by the end of &''4 and save 34bn billion in operating e"penses during the same time span= #hich #as about 37''m more than it had proJected before completing the 318.7 billion acCuisition. -. Chairman and Chief ?"ecutive Carly 5iorina had also promised to limit revenue declines from the merger, to 4.9 percent of estimated revenue for &''4. The three %ey hurdles for -. #ere considered to be ma%ing bottom9line numbers, maintaining a customer base and improving employee morale. 1ntegrating CompaC completely #as li%ely to ta%e t#o to three years and considered a serious ris% in a business #here the product life cycle is less than three years. 2lso, research sho#ed that an estimated 8' percent of acCuisitions fail to add value for shareholders. ?ven before the deal #as announced, the t#o companies had discussed several areas for change and integration (see 2ppendi" 4).
-PP NDI5 1 Finan"ial 1esults ,or 6 Mont's en!e! 1 November (in 7millions e8"ept s'are !ata)
Net revenue Cost of revenue *ross mar%in ,elling, general and administrative Fesearch, development and engineering ,pecial charge Total operating e"penses )peratin% in"ome 1nvestment and other income(loss) 1ncome before income ta"es 1ncome ta" provision Net in"ome arnin%s per "ommon s'are2 :asic Diluted (ei%'te! avera%e s'ares outstan!in%2 :asic Diluted -PP NDI5 2 2002 293::6 &1,1'1 =39:> &,&'7 448 9 &,744 23029 141 &,188 84L 13916 3'.79 3'.7L &,78L &,871 2001 2;310< 19,'18 =3061 &,'L1 444 48& &,898 13169 (98) 1,'9L 4'L <60 3'.4' 3'.&9 &,8'4 &,L48
Con!ense! Consoli!ate! Balan"e $'eet an! 1elate! Finan"ial Hi%'li%'ts (in 7millions)
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-ssets2 Current -ssets2 Cash and cash eCuivalents ,hort term investments 2ccounts receivable, net 1nventories, net $ther Total "urrent assets .roperty, plant and eCuipment, net 1nvestments $ther non9current assets Total assets 0iabilities an! $to"#'ol!ers? 4uit.2 Current liabilities2 2ccounts payable 2ccrued and other Total "urrent liabilities @ong term debt $ther Total liabilities ,toc%holders! eCuity Total liabilities and stoc%holders! eCuity 2002 4,'44 &L' &,881 4'L 1,484 >3<99 88& 4,L77 4&' 1=3<12 2001 4,44& 4'9 &,4'4 &89 1,4LL <3<00 8'8 4,&8L 714 1;32><
7,948 &,78& >3=6> 714 1,'7& 1030:= 4,848 1=3<12
4,LL1 &,448 <321< 718 LL' >3909 4,L8& 1;32><
-PP NDI5 ; -nnual Finan"ial Hi%'li%'ts (in millions e8"ept s'are !ata) 2002 >et revenue $perating income >et income Diluted earnings per share Closing share price -PP NDI5 = HP-Compaq Merger $our"e2 :ehind the ,cenes of the -.9CompaC *erger, Aames >iccolai, ID" (ews Ser ice, ,eptember &8, &''& "31!1#8 "2!271 "1!780 "0&#$ "2#&80 2001 "31!888 "2!7#8 "2!310 "0&8% "2$&19 2000 "2$!2#$ "2!%$7 "1!8#0 "0 "37&2$ 1999 1998
"18!2%3 "12!327 "2!0%# "1!31# "1!%#0 "9%% "0&$3 "0&32 "$0&00 "12&%3
1'
?"ecutives at -e#lett9.ac%ard and CompaC Computer had figured out 97 percent of their Joint product strategy by mid9December last year, almost five months before the plans #ere made public. PThe product part #as one of the easiest things99#e too% the products #ith the leading mar%et momentum and share,P said 2nn @ivermore, head of -.!s services group, #ho discussed the merger at an industry dinner here *onday night. GThey #ere some of our most important decisions, but they #ere also the least debated.K The fast #or% in this area is only one e"ample of ho# Cuic%ly the merger team #or%ed to ma%e the deal happen, trying to lay the ground#or% for a successful acCuisition that #ould buc% an industry trend for giant corporate mergers99for the most part, they don!t #or% out. 1ea!. to *o :efore the deal #as even announced, the companies had decided #hich managers #ould lead the combined company in its various global mar%ets, said .eter :lac%more, head of -. s enterprise systems group, #ho Joined @ivermore in the discussion. ?ach company had had its o#n country manager, he said, meaning one of them in each country had to go. Ihen the deal received official shareholder approval on *ay 1, signs bearing the CompaC name at its factories and offices #ere hauled a#ay immediately, to be replaced #ith those of -.. The companies! e9mail systems #ere merged from day one, :lac%more said, and #hen CompaC staff got their first paychec%s later that month, they arrived #ith an -. logo. GThis #as very much designed to sho# our customers and our employees that #e #ere ready,K :lac%more said. motional 1ea"tions Despite the efforts, ne#s of the deal came as a shoc% to most #or%ers #hen it #as announced a year ago. Dealing #ith employees emotional reaction #as the biggest hurdle to overcome, @ivermore said, admitting that even she #as blindsided. G*y initial reaction #hen Carly told me #as, Rou ve got to be %idding,K she said, referring to -. Chairman and Chief ?"ecutive Carly 5iorina. G1t #as the last thing on my mind.K @oo%ing ahead, -. hopes to gro# its business selling products for consolidating servers and storage eCuipment, deploying mobile infrastructures and building CF* (Customer Felationship *anagement) systems, :lac%more said. GCF* systems do help customers, they absolutely help them get a return on investment,K he said. ?"panding -. s services division is also a big priority, and the company sees outsourcing as another potential moneyspinner, @ivermore said. The merger propelled -. from around number eight in the services mar%et to number three, she said, behind 1:* and ?lectronic Data ,ystems, and has made -. big enough to matter. The division no# boasts 87,''' service staff #orld#ide, she said. Business Plans 1ndeed, gro#ing its business overall is a maJor goal for the ne# company. .ounded by the tough economy, -. sa# its revenue fall 9 percent in its most recent Cuarter, to 318.7 billion. ,ales from its enterprise systems group fell && percent from the year earlier, #hile its personal systems
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group reported a decline of 19 percent. $nly its printing and imaging business sa# gro#th, gro#ing revenue 1' percent. :ut the e"ecutives insisted *onday that the merger #as the right move. 1n 2pril last year, :lac%more said, over dinner at the home of *ichael Capellas, CompaC!s top brass ste#ed over changes that #ere s#eeping across the 1T industry. ,tandard server sales #ere gro#ing, profit margins #ere being sCuee;ed, and only one ans#er seemed to ma%e sense0 consolidation. @i%e @ivermore, :lac%more #ouldn!t learn of the merger plans until later, some t#o months before it #as announced. :ut in hindsight, he said, the conversation that night seemed to set the tone for the rationale behind the acCuisition to come0 *argins #ere being sCuee;ed, economies of scale #ere imperative, and only the very biggest companies #ould survive the years ahead. 1ndeed, he said, of the five remaining hard#are giants in the +.,.99-., ?*C, Dell Computer, ,un *icrosystems, and 1:*99only three #ill survive in the long term. 5alling margins ma%e further consolidation inevitable, he predicted. 0oo#in% For&ar! 2s%ed ho# far along the merger is no#, @ivermore said about one9third of the integration #or% has been done. G:y *ay #e ll be at closer to 9' percent,K she said. The e"ecutives #ere sanguine about the future. They tal%ed of long hours and of endless travel, but seemed to relish the e"perience and e"hilaration that comes from being a part of a merger so big. G>ot everything #as perfect, but the launch #as very good,K :lac%more said. -PP NDI5 9 Dell Mi"roso,t @N T nterprise $erver $.stem (Source0 adapted from0 GDell.com .repares for /reater /ro#th #ith Dell *icrosoft .>?T ?nterprise ,erver ,ystem
1ncluding *icrosoft 2pplication Center &'''K, *icrosoft Corporation, &''')
$ituation
To maintain the most fle"ible, responsive development environment possible, Dell has built Dell.com on the *icrosoft Ieb9solution platform. PIe need to respond to business and customer needs and do it Cuic%ly,P e"plains ,teve ,civally, 1nternet technologist at Dell. P2pplication development cycles are collapsing under 1nternet time. *ore and more competitors are pushing Dell harder and harder to match features and then some. Ie need a development platform that #ill enable us to build solutions any #ay that ma%es sense, #hether purchasing components or developing in9house. ,calability, performance, and reliability are more important than ever, because they impact the customer e"perience.P
$ite $erver ;@0 Commer"e !itionAa Fle8ible Foun!ation
The success of Dell.com is largely due to the personali;ed treatment it provides to every visitor. ,ite ,erver 4.' Commerce ?dition is behind each uniCue user e"perience. 5or e"ample, customers at +.,. government agencies are able to access pricing for systems that have been approved through /eneral ,ervices 2dministration contracts. *aJor customers can access customer9specific products and pricing, enabling authori;ed shoppers to build their o#n configurations as dictated by their contracts #ith Dell. Dell!s system ensures that customers can access the data they are loo%ing forSsuch as pricing and model configurationsS#ith minimal #aiting.
0o&er Costs3 asier Development an! Mana%ement
The *icrosoft Ieb9solution platform is giving Dell fast and easy development and lo#ering costs at the same time. :ecause developers are already familiar #ith the *icrosoft C$* component model, ,civally e"pects the migration to C$*T to provide ne# enhancements #hile preserving the programming model the development staff already %no#s. P5eatures in C$*T are easier to learn and use than those in *icrosoft Transaction ,erver, so ma%ing the transition #ill be elemental,P he says.
1&
0oo#in% For&ar! to @N T nterprise $ervers
PCommerce ,erver &''' #ill give us the ability to post multiple product catalogs, support different types of customers, and do much richer and more scalable user profiling, including targeting and discounting,P ,civally says. P1t #ill also give us higher order velocitySthe ability to ta%e more orders online.P PThe obJective is to gain better scalability and performance,P ,civally says. P2n e"ample might be ta" and shipping functions. Today, #e calculate ta" and shipping on each and every server. Iith C$*T obJects and Component @oad :alancing, #e!ll be able to build this capability once and run it on a fe# second9tier servers. The benefits are better customer service and lo#er resource usage.P 2ll the *icrosoft .>?T ?nterprise ,ervers products #ill build on the reliability enhancements of Iindo#s &''' and give Dell greater scalability and performance for databases, commerce, management issues, and customer service. Dell.com, riding on Dell servers and the *icrosoft platform, reduces costs for customers and for Dell, adapts Cuic%ly to customer demands, provides faster, higher Cuality service to customers, and enhances customer relationships. P$ur Ieb strategy is our company strategy,P ,civally says. P2lmost every one of our customers interacts #ith Dell in some #ay over the Ieb. The *icrosoft platform helps us Cuic%ly, easily, and cost9effectively direct access to this vital channel.P
2>,I?F T-? 5$@@$I1>/ U+?,T1$>, 1> F?.$FT ,TR@? 5$F*2T. R$+F F?.$FT ,-$+@D :? C$>T21>?D I1T-1> I$FD @1*1T, $5 &7'' M 4''' I$FD,. 1T 1, O1T2@ T-2T R$+ C1T? 2@@ R$+F F?5?F?>C?, 1> -2FO2FD ,TR@? 5$F*2T. T-1, @1,T $5 F?5?F?>C?, 2>D 2>R :1:@1$/F2.-R D$ >$T C$+>T 1> T-? I$FD ,C$F?. U1 ?valuate Dell s strategy over the period of the case, paying particular attention to sources of competitive advantage, strategic development and performance U&. Ihat strategic alliances has Dell formed and in #hat #ay do these assist and complement Dell s gro#th and developmentV U4. Comment on the rationale behind the -.<CompaC merger and consider the li%ely impact on Dell s position in the future
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