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Seed Stage

Dell traces its origins to 1984, when Michael Dell created PC's Limited while a student of the University of Texas at Austin. The dorm-room headquartered company sold IBM PCcompatible computers built from stock components. Dell dropped out of school to focus full-time on his fledgling business, after getting about $300,000 in expansion-capital from his family. In 1985, the company produced the first computer of its own design, the Turbo PC, which sold for $795. PC's Limited advertised its systems in national computer magazines for sale directly to consumers and custom assembled each ordered unit according to a selection of options. The company grossed more than $73 million in its first year of operation.

Start Up Stage
In 1986, Michael Dell brought in Lee Walker, a 51-year-old venture capitalist, as president and chief operating officer, to serve as Michael's mentor and implement Michael's ideas for growing the company. Walker was also instrumental in recruiting members to the board of directors when the company went public in 1988. Walker retired in 1990 due to health, and Michael Dell hired Morton Meyerson, former CEO and president of Electronic Data Systems to transform the company from a fast-growing medium-sized firm into a billion-dollar enterprise

Growth Stage
Originally, Dell did not emphasize the consumer market, due to the higher costs and unacceptably low profit margins in selling to individuals and households, however this changed when the companys Internet site took off in 1996 and 1997. While the industrys average selling price to individuals was going down, Dells was going up, as second- and third-time computer buyers who wanted powerful computers with multiple features and did not need much technical support were choosing Dell. Dell found an opportunity among PC-savvy individuals who liked the convenience of buying direct, customizing their PC to their means, and having it delivered in days. In early 1997, Dell created an internal sales and marketing group dedicated to serving the home market and introduced a product line designed especially for individual users.

Establishment Stage
From 1997 to 2004, Dell enjoyed steady growth and it gained market share from competitors even during industry slumps. During the same period, rival PC vendors such as Compaq, Gateway, Inc., IBM, Packard Bell, and AST Research would struggle and eventually leave the market or get bought out Dell surpassed Compaq to become the largest PC manufacturer in 1999. Operating costs made up only 10 percent of Dell's $35 billion in revenue in 2002, compared with 21 percent of revenue at Hewlett-Packard, 25 percent at Gateway, and 46 percent at Cisco In 2002, when Compaq merged with Hewlett Packard (the 4th place PC maker), the newly combined Hewlett Packard took the top spot but struggled and Dell soon regained its lead. Dell grew the fastest in the early 2000s.

Dell attained and maintained the #1 rating in PC reliability and customer service/technical support, according to Consumer Reports, year after year, during the mid-to-late 90s through 2001 right before Windows XP was released.

Expansion Stage
In the mid-1990s, Dell expanded beyond desktop computers and laptops by selling servers, starting with low-end servers. The major three providers of servers at the time were IBM, Hewlett Packard, and Compaq; many of which were based on proprietary technology, such as IBM's Power4 microprocessors or various proprietary versions of the Unix operating system. Dell's new PowerEdge servers did not require a major investment in proprietary technologies, as they ran Microsoft Windows NT on Intel chips, and could be build cheaper than its competitors Consequently, Dell's enterprise revenues, almost nonexistent in 1994, accounted for 13 percent of the company's total intake by 1998. Three years later Dell passed Compaq as the top provider of Intel-based servers, with 31 percent of the market. Dell's first acquisition occurred in 1999 with the purchase of ConvergeNet Technologies for $332 million, after Dell had failed to develop an enterprise storage system in-house, however ConvergeNet's elegant but complex technology did not fit in with Dell's commodity-producer business model, forcing Dell to write down the entire value of the acquisition. In 2002, Dell expanded its product line to include televisions, handhelds, digital audio players, and printers. Chairman and CEO Michael Dell, however, had repeatedly blocked President and COO Kevin Rollin's attempt to lessen the company's heavy dependency on PCs, which Rollins wanted to fix by acquiring EMC Corporation. In 2003, the company was rebranded as simply "Dell Inc." to recognize the company's expansion beyond computers. In 2004, Michael Dell resigned as CEO while retaining the position of Chairman, handing the CEO title to Kevin Rollins who had been President and COO since 2001. Despite no longer holding the CEO title, Dell essentially acted as a de facto co-CEO with Rollins. Under Rollins, Dell began to loosen its ties to Microsoft and Intel, the two companies responsible for Dell's dominance in the PC business. During that time, Dell acquired Alienware, which introduced several new items to Dell products, including AMD microprocessors. To prevent cross-market products, Dell continues to run Alienware as a separate entity, but still a wholly owned subsidiary. The Maturity Stage and Decline Stage has yet not faced by Dell.

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