SUCCESSFUL BUSINESS MODELS PRESENTATION EIN 5322 Prof : Dr. Ted Lee

1. SUCCESSFUL BUSINESS MODELS PRESENTATION EIN 5322 Prof : Dr. Ted Lee Prepared by: Devesh Sujan and Michael Argueta

3. Dell Computers Statement • Mission Statement : To be the most successful computer company in the world at delivering the best customer experience in markets we serve. • Vision Statement : Through effective and strategic community partnerships, Dell supports educational and literacy services programs that address the critical and most basic educational needs of its neighbors in Dell Communities - prerequisites to success in the digital world.

4. Company Facts • Dell was founded in 1984 by Michael Dell. • Dell introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels, having inventory turned over every four days on average. • Dell’s market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling standards-based computing products and services. • Manufacturing of Dell computers take place around six locations around the globe. • Revenue for the last four quarters totaled $54.2 billion and the company employs approximately 63,700 team members around the globe.

5. Soul of Dell • Customers: Dell believes in creating loyal customers by providing a superior experience at an affordable value. Dell is committed to direct relationships, providing the best products and services based on standards-based technology, and outperforming the competition with value and a superior customer experience. • The Dell Team: Continued success lies in teamwork and the opportunity each team member has to learn, develop and grow. Dell is committed to being a meritocracy, and to developing, retaining and attracting customers, reflective of the worldwide marketplace.

6. Soul of Dell • Direct Relationships: Direct in everything. Committed to behaving ethically; responding to customer needs in a timely and reasonable manner; fostering open communications and building effective relationships with customers, partners, suppliers and each other; and operating without inefficient hierarchy and bureaucracy. • Winning: Dell’s committed to operational excellence, superior customer experience, leading in the global markets, being known as a great company and great place to work, and providing superior shareholder value over time.

7. Dell Global Product Development • Dell design engineers are focused on technology leadership and have a track record of innovative product and technology solutions, many of which were first-to-market.

8. Innovation at Dell • DDR2-SDRAM is considered an evolutionary upgrade over existing DDR memory. It maintains the same core functions, transferring 64 bits of data twice every clock cycle for an effective transfer rate twice that of the front-side bus (FSB) of a computer system, and an effective bandwidth equal to its speed x 8. • DDR2 picks up where DDR memory currently stops, which is at 400MHz

9. Standard-Based Products • Ability to drive industry standards that directly address customer challenges. • Open standards enable flexible solutions to meet evolving computing models. Unlike proprietary technologies, standards allow customers : • Increased choice • Decreased cost and complexity • Product and process interoperability

10. Standard-Based Products • Dell’s leadership in standards organizations drives standards that benefit both the customer and partner communities. • Out of every five standards-based computer system sold in the world today is a Dell.

11. Dell & Lean Manufacturing • Dell's direct business model slows down strong production inventory and capital investment efficiencies that translate into tangible benefits for the environment. • Since all products are made to order, Dell currently maintains only three days of inventory for most parts and equipment, which keeps the environmental impact of warehousing to a minimum. • Components and parts are only ordered and shipped to Dell when they are ready to be assembled into the final computer product, thereby saving energy and operational costs associated with storing inventory. • Lean Manufacturing at its best.

12. Manufacturing Locations

13. Products and Services • Dell is among the world's leading computer manufacturers that has transformed and diversified into variety of business segments over the years. • Today Dell is the third largest computer manufacturer in the world.

14. Something for Everyone • Dell makes electronic consumer products for various classes such as college students, IT professionals, Professors, Business leaders and the Government. • Products range from Dell PowerEdge servers, Power Vault, Dell EMC storage systems as well as PowerConnect switches for corporate clients. • For individuals and professional customers products range from Dell Precision workstations, OptiPlex desktops, Dimension desktops, Inspiron and Latitude notebooks. • In addition to this, the company also manufactures accessories for computers such as printers, projectors, fax machines ,Axim handhelds, LCD monitors and their own version of IPOD called DJ Dell.

15. Why Consumers buy Dell ? • Quality products for affordable prices • Dell’s online purchase system enables consumers to customize laptops and desktops according to their needs. • Financing available for qualified customers. • Excellent customer service and online support system. • Extended warranty on many products and services. • Wide variety of products.

16. Annual Financial Highlights (in millions except per-share data) FY' 05 FY' 04 FY' 03 FY' 02 Net Revenue $31,168.00 $49,205.00 $41,444.00 $35,404.00 $3,544.00 $2,844.00 Operating Income $4,254.00 $2,271.00 Net Income $3,323.00 $2,645.00 $2,122.00 $1,780.00 Earnings per Share $1.29 $1.01 $0.80 $0.65 $26.80 Closing Stock Price $41.06 $33.44 $23.86

17. Revenue

18. Earnings

19. World Market Share

20. Environmental Management • All of Dell's manufacturing sites are certified to the ISO 14001 Environmental Management System standard. • The Environment, Health and Safety (EHS) management system at Dell involves several key components, including: • Identification of health and safety risks at each site and the significant environmental aspects and impacts of manufacturing and other activities. • Setting EHS goals, measuring performance and reviewing progress.

21. Establishing procedures to reduce or control the risks and impacts, respond to emergencies, and take corrective actions. • Communicating policies and requirements, and providing appropriate training to employees, contractors and others at Dell sites. • Maintaining adequate records and other documentation. • Auditing regulatory compliance and performance of the management system.

22. Effective Waste Management • Company’s R3 policy (Reduce, Reuse and Recycle) has introduced permanent recycling operations that have resulted in significant waste reductions. • These sites collect more than 10 different materials such as cardboard, office paper, plastics, foams, metals, batteries, disks and pallets.

24. Work Cited • www.dell.com