Dell Hell

CASE STUDY ON DELL

Dell Hell

In 1983, Michael Dell attended the University of Texas in Austin as a premed student. However, Dell had long developed a passion for computers. At the age of 15, Dell purchased (and dismantled much to the horror of his parents) his first computer, an Apple II. As a result of his interest, during his freshman year of college, Dell began to buy, upgrade and resell computer components from his college dorm room. By the end of his freshman year, Dell was earning approximately $80,000.00 per month . The following year, Dell incorporated his business as PCs Unlimited and moved his headquarters to Austin Texas. In 1985, Dell hired and engineer and the company began to design and build computers with purchased components. In 1986, Dell introduced the fastest PC of that time, with a 12 megahertz, and 286 processor. The model generated a great deal of attention and success. Sales that year were reports at $60 million dollars.

In 1987, Dell renamed his company Dell Computer Corporation and a year after that took it public.Much of the company’s success was a direct result of Michael Dell’s original concept of a direct sales model. Consumers were able to customize their machines to their exact specifications and place the orders directly by phone. The advantage of this model of custom configuration and a direct relationship with the customer was that Dell, Inc. was providing the customer with exactly what they asked for and did not have to guess what the customer might want. One of the drawbacks to the direct model was that customers were not able to see or handle their product before purchasing it. As a solution to counter this issue, Dell offered his customers a 30 day money back guarantee and next day at home product assistance. Both of these initiatives were industry firsts and they served to establish Dell, Inc. as a consumer friendly company. By 1994, Dell, Inc. had become one of the top five...