Dell Technologies (US)

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Life has been challenging for Dell over the past ten years. First it struggled against relentless competition from HP, which cost it a place as the world's #1 computer manufacturer during 2007. It then faced an equally daunting challenge from Lenovo, which managed to over-leap both Dell and HP by 2013. Most damaging of all was the dramatic slump in PC sales as a result of surging demand for tablets. Key to Dell's original success had been its decision to focus on a direct sales model, selling only via the internet, telephone and mail order in order to provide high quality technology at the lowest cost. Other companies attempted to emulate the formula, but for many years none was able to match Dell's efficiency or success. Eventually though Dell became distracted by other issues, including internal control problems and a lack of cohesion in its approach to market, and it struggled to keep abreast of the fast-changing market. To fix those problems without the glare of a public listing, founder Michael Dell launched a $25bn bid to take the business private again in 2013. Two years later, he unveiled an equally bold plan to acquire storage and services company EMC for around $63bn. That deal, the biggest to-date in the tech industry, created a new IT giant with proforma combined sales of almost $80bn.

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Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. Subscribers may access the following website links:

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Brands

Dell Dimension PCs Dell Services
Dell Inspiron portables Dell Latitude
Dell OptiPlex desktops Dell PowerEdge
Dell Precision Dell PowerVault

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 9th Mar 2017: Research specialist Concave Brand Tracking published its ranking of the Top 100 Product Placement Brands in 2016 Movies after watching every movie released last year and timing the exposure for all noticeable brands. (What a fantastic job! Where do we apply?). You won't be too surprised by the market leaders. Dell took top spot with an hour of total screen time in over a dozen movies, including Captain America: Civil War and Jason Bourne. In second place is Samsung, with around a half-hour of total exposure, including more than 15 minutes in Batman v Superman. Next came Apple (appearing in 25 movies, though mostly less high-profile ones) and Ford (which appeared in more films than any other brand, but more fleetingly than the top three). Rounding out the Top Ten were Chevrolet, Ray-Ban, Audi, CNN and Dodge. The biggest surprise on the list is little-known eyewear manufacturer iGreen, which got around 30 minutes of significant screen time from being worn by Melissa McCarthy more or less throughout Ghostbusters. Concave put a value on screen time for the Top Ten of between $6m and $16m. See the full ranking and screenshots at Concave.

Adbrands Weekly Update 13th Oct 2016: HP closed the gap on rival Lenovo during 3Q 2016, bringing the two tech groups neck-and-neck in the global PC market, according to figures from IDC. Growth at HP lifted the US company's global share to 21.2%, only fractionally behind Lenovo, which slipped to 21.3%. Dell also powered up, hitting 15.8%. Apple and Asus rounded out the top five. Global shipments declined almost 4% year-on-year to just under 68m units, though that figure was better than had been expected. In the US alone, HP retained the top spot, ahead of Dell and Lenovo.

Adbrands Weekly Update 14th Jul 2016: PC sales were slightly better than expected in Q2, slipping by 4.5% rather than the 7.4% predicted by market-watcher IDC. The US market returned to growth, but all other regions experienced a decline. Lenovo retained the top position with 21.2% global share, but second-placed HP gained ground to end up only 0.4% behind. Dell too enjoyed a lift. However, Apple slipped back into 5th place behind Asus. In the US market, HP and Dell retained their comfortable lead over the rest of market, with HP seizing back the top position from 1Q leader Dell.

Adbrands Weekly Update 14th Apr 2016: The global PC market is still in decline according to latest figures from market watchers IDC and Gartner. According to IDC, total shipments fell by 11.5%, in line with expectations, with all five leading manufacturers losing sales on a global basis. However the big surprise was Dell's return to the top spot in the US, ending a six-year lead by HP, while Lenovo overtook Apple for the #3 position. On a worldwide basis, Lenovo remained the #1 manufacturer with 20.1% share, to HP's 19.2%. In the US, Dell took 25.6% share to HP's 25.3%. Gartner's figures were slightly different but the overall picture was the same. "The deterioration of local currencies against the US dollar continued to play a major role in PC shipment declines," said Gartner. "All major regions showed year-over-year shipment declines, with Latin America showing the steepest drop, where PC shipments declined 32.4%." IDC noted that "Demand for PCs in the US remains sluggish. However, we should be entering a period of reprieve. Peak corporate and education buying seasons have historically started in the second quarter... the PC market should experience a modest rebound in the coming months."

Adbrands Weekly Update 31st Mar 2016: Dell is to exit the IT consultancy sector with the agreed sale of its services business to NTT of Japan for $3.05bn. Dell entered the market in 2009 with the acquisition of what was then Perot Systems for $3.9bn. That acquisition was designed to give Dell a foothold in a market increasingly dominated by IBM and HP. However, Dell's own subsequent strategic path has moved in a different direction. This deal will allow it to pay down some of the substantial debt accumulated in its private buyout and, more recently, the acquisition of storage specialist EMC.


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Background

Free for all users | see full profile for current activities: Michael Dell was a teenage entrepreneur long before he founded the computer company which made his fortune. As a kid he ran a mail-order stamps business from home, and followed this by selling newspaper subscriptions. His success in this area enabled him to buy a BMW when he was 17. As a pre-med student at the University of Texas, he started a computer components business from his dormitory room, buying disk drives and chips cheap from IBM dealers and reselling them through newspapers and magazines.

By 1984, this business was already generating sales of close to $1m a year, so Dell dropped out of college to begin building PC clones. He named his company PCs Limited, launching the first model, the Turbo in 1985. As before, he sold his computers exclusively through mail order, and by cutting out the middle man retailer, found he could market his machines at 40% below other companies' prices. In 1987, renamed Dell Computer, the company opened its first international office, in the UK, and went public in 1988. Following the launch of manufacturing centres in Europe and then Asia, Dell had become one of the world's top five computer manufacturers before its 10th birthday. The company also briefly toyed with retail sales, licensing office suppliers Staples and CompUSA to retail its computers at mail order prices. This experiment was unsuccessful, and Dell returned to pure mail order in 1994.

The company launched its e-commerce site at Dell.com in 1996, and in less than a year, this had become the company's fastest-growing sales channel, generating sales of more than $4m a day within a year. The range of products also gradually expanded. The first notebooks were introduced in 1991, followed by servers in 1996, workstations in 1997 and storage products in 1998. By 2000, internet sales were exceeding $50m every day. One year later Dell overtook Compaq to become the #1 computer manufacturer by market share.

Having already earned the title as the longest-serving chief executive in the computer industry, Michael Dell stepped down as CEO of the company in 2004, but remained chairman. Kevin Rollins, previously president & COO, was appointed as CEO. However after a terrible year in 2006 in which Dell came within a whisker of losing its position as the global #1 in PCs, Rollins was dismissed in February 2007, and Michael Dell took back the role of chairman & CEO. In the meantime, in 2005, the group had also become the subject of an investigation from US financial regulators over alleged accounting irregularities. This prompted Dell to launch its own probe. After an extensive internal investigation lasting some two years, Dell announced in August 2007 that it had discovered evidence that several unidentified senior executives had sought to manipulate past quarterly financial performance in order to achieve performance goals. The group said it would restate its financial results for the four years 2002 to 2006, as well as for 1Q 2007, to reduce combined net profits by between $50m and $150m. The actual figure finally confirmed in October 2007 was $92m.

Also in 2007, Dell announced plans to consolidate all its global marketing with WPP. That group began construction of a dedicated global network to handle the business, drawing staff members and resources from its existing agencies. In May 2008, rumours emerged that the agency would be named Synarchy Worldwide. This news was greeted with derision by industry pundits, since it referred to a historical political movement from the late 19th century with connections to Nazism. WPP finally confirmed in June that the real name of the agency would be Enfatico. However, that experiment was generally regarded as unsuccessful if not disastrous. There were long delays getting Enfatico fully operational, and most of Dell's most visible advertising continued to be produced by other agencies. By early 2009, the two Dell marketing executives who had championed the strategy to create Enfactico, CMO Mark Jarvis and VP Casey Jones, had both left the company. Soon afterwards, the Enfatico project effectively stalled, with WPP's Y&R taking charge of Dell's marketing. See full profile for current activities


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