BUSINEES ENGLISH 1
Hello, my name is Agustín Berger and I´m going to introduce the topic that concerns us today. We´re going to talk about “Dell Inc.”, one of the most admired and respected computer companies in the world. Our aim is to show you Dell´s athypical production method.
Firstly, my partner Danilo Villanueva isgoing to describe the company history, and how they turned from a U$S 1000 company into a U$S 15 Billion.
Secondly, I will explain the structure and the company philosophy in detail, with a description of the particular production process that Dell has.
Finally, my partner Yenien Rey is going to explain the benefits of this particular production process with a very interesting example.
Our talkwill last 20 minutes approximately, and at the end or our presentation, we will answer any doubts or questions you have.
While a student at the University of Texas at Austin in 1984, Michael Dell founded the company as “PC´s Limited” on a simple concept: “by selling computer systems directly to customers we could understand their needs”.
With a capital of $1.000 and operatingfrom Michael Dell´s dormitory room, the startup aimed to sell IBM PC-Compatibe computers built from stock components. Michael Dell dropped out school in order to focus fulltime on his promising business, after getting about $ 300.000 in expansion capital from his family.
In 1985, the company produced the first computer of its own desing, the “TURBO PC” sold for u$s795. To promote the cmputer andcustom assembly system, they use a campaign in national computer magazines. Although not the first company to use this model, they became one of the first to secceed with it. The company grossed more than $ 73 millon on its first year of trading.
Three years later the company changed its name to “DELL COMPUTER CORPORATION” and a year after that set up its first on site-service programs in order tocompensate for the lack of local retailers prepared to act as service centers.
For that year Dell´s profits amounted to 80 millon from the sale of computers and the sale of 3.5 million shares.
In 1996 Dell started to sell computers via its web site.
In 2002 Dell businnes expands and begins to make TV´s, handhelds, digital audio players and printers for home and small-office use.
A year afterthat, in 2003 Dell changed his name to “DELL INC.” to recognize the company´s expansion beyond computers.
Finally in 2004 Michael Dell stepped down as CEO to Kevin Rollins to take a break and then return to it in 2007.
Dell is now one of the most important computer companies in the world, with an annual income of $ 14.4 billions and is ranked # 1 of the “MOST ADMIRED COMPANIES” by FORTUNEMAGAZINE. All thanks to the effort and the idea of a simple collage student.
STRUCTURE AND COMPANY PHILOSOPHY
To minimize the delay between purchase and delivery, Dell has a general policy of manufacturing its products close to its customers. This also allows for implementing a just-in-time (JIT) manufacturing approach, which minimizes inventory costs. Low inventory is anothersignature of the Dell business model – a critical consideration in an industry where components depreciate very rapidly.
Traditionally, Dell has sold all its products — whether to end-use consumers or to corporate customers — using a direct-sales model via the Internet and the telephone-network. Dell maintains a negative cash conversion cycle (CCC) through use of this model: inother words, Dell Inc. receives payment for the products before it has to pay for the materials. Dell also practices just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell's JIT approach utilizes the "pull" system by building computers only after customers place orders and by requesting materials from suppliers as needed.
Since the days of the original dominance of...