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Dell - History

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In 1984, while attending the University of Texas, Michael Dell founded the company under the name PC’s Limited. With start-up money totalling $1000, Michael Dell operanted from his dorm room. He wanted to sell IBM-compatible computers made from stock parts. Dell believed that selling personal computer systems right to the customer would foster a better relationship with the customer. He dropped out of school to focus fully on his new business. The company made its first self-designed computer, the “Turbo PC” and advertised it in computer magazines. Each order was customized according to a selection of possible options. This allowed buyers to pay considerably lower prices than most major brands. PC’s Limited was not the first company to try this, but was the first to succeed, grossing $6 million in the first year alone.
In 1987, on-site service centers were opened to further cater to customers. This same year, the company set up operations in England with several more international operations following in the ensuing years. PC’s Limited became the Dell Computer Corporation in 1988. Dell tried to sell products through computer stores and warehouse clubs in 1990, but was unsuccessful and decided to re-focus on selling PCs directly to the customer. Fortune Magazine included Dell in its list of the largest companies in the world in 1992. Four years later, Dell started selling computers from its web site. In 1999, Dell beat Compaq, becoming the biggest seller of PCs in the U.S. Dell earned $25 billion in 2000. The company’s name was changed to Dell, Inc. in 2003.

In 2004, Dell tried to expand its sales to include televisions, printers, digital audio players and handhelds. This same year, Michael Dell decided to step down as the CEO, retaining only his position as chairman of the board. Kevin Rollins became the new CEO and announced that the company would build an assembly-plant in North Carolina. Winston-Salem, North Carolina provided Dell with over $37 million dollars in incentives with the state pitching in over $250 million in tax breaks. In 2005, international sales increased and Dell was ranked first in the “Most Admired Companies” published by Fortune Magazine. Later that year, BusinessWeek magazine published an article siting shortfalls in sales and bad performance within Dell. Kevin Rollins blamed this bad performance on Dell’s focus on low-end PCs. In 2006, Dell bought Alienware. One year later, Rollins quit the company following Michael Dell’s return to the roll of CEO.

In 2007, Dell was the subject of investigations by the U.S. Attorney General for the Southern District of New York because Dell had not formally filed financial reports for 2006. A number of class-action lawsuits have been filed in conjunction with this investigation. Under normal circumstances, failing to disclose financial information would result in a company being banned from the NASDAQ, but the NASDAQ granted a waiver to Dell. With Michael Dell’s return, immediate changes were implemented and many senior vice-presidents were fired or resigned with new blood being appointed to take their places.

Dell, Michael - Overview, Personal Life, Career Details, Social and Economic Impact, Chronology: Michael Dell [next] [back] Delia's

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