Dell Inc

Dell, Inc

• For success in the marketplace, Dell’s business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis on standards-based technologies (SEC 2005). Although Dell uses a combination of customer intimacy, operational excellence and product leadership, this strategy primarily relies on the “Customer Intimacy” approach. This is true because the key tenets of Dell’s business strategy are: “A direct relationship is the most efficient path to the customer” (SEC 2005).

• Business risks that Dell faces that may threaten its ability to satisfy stockholder expectations are the fact that product transitions present some of the greatest execution challenges and risks for any technology company. Accordingly, if Dell is unable to effectively manage a product transition, its business and results of operations could be negatively affected (SEC 2005). Control activities that the company could use to reduce these risks are to hire the best talent in the field of technology and to continuously invest their earnings into research and development.

• The Sarbanes-Oxley Act of 2002 explicitly affected the disclosures contained in Dell’s 10-K report because it states that the annual report must contain an internal control report and that independent accountants have to certify the company’s internal control over its financial reporting, where originally the accountants only had to certify the the annual report must contain an internal

• Dell is a manufacturer. Its inventory balance contains items a merchandiser would not have such as finished goods, production materials and work-in-process.

• Examples of direct inventoriable costs for Dell are labor for computer products and materials. Indirect inventoriable costs for Dell are depreciation costs of equipment and manager’s salaries. Dell’s gross margin (in dollars) steadily increased from 2003 to 2005, yet the gross margin as a...