Analysing Product Development Within Dell Computers

Analysing Product Development Within Dell Computers The Product Development at the Dell Computer Corporation case can be summarized with just its name, product development. The case focuses on development of Dell’s personal computers, highlighting the area of the laptops. The personal computer industry can be dated back to the 1830’s and Charles Babbage with his invention of the first digital computer. However with limitations of materials and marketing his vision mainly stayed on what is called â€Å"the drawing board.† It was not until the time period of World War II when a factory size computer was created by army engineers, they were named Mark I and Colossus and they were 50 feet in size. Through the 1960s and the 1970s only the government, mainly for defense, and big business had the opportunity to use computers. As technology increased and microchips replaced the wires and transistors, and financial availability became friendlier for consumers the microcomputer revolution began. In the 1970s and 1980s Appl e Computer was a successful leader in a commercialized interface that was easy to use. Apple set the technological pace for cramming as much new technology in to their products as possible. IBM who was always trying to play catch up with Apple kicked off its traditional corporate based computer line, with strong direct sales and service. Dell also released its own branded personal computer in 1981. During the 1980s personal computer sales grew from nothing to $40 billion dollars. It was in 1983 when Dell Computer was started by Michael Dell, who at this point in time was a freshman at the University of Texas. He would upgrade IBM compatible computers and go door to door selling them. The success was overwhelming for Dell, and he moved off campus and dropped out of school, with the initial idea of returning back to school if there was failure with the business. However, with $180,000 in sales during his first month the idea of going back to school never entered his mind. The next ste p for Dell was to buy and assemble his own brand name personal computers and get them directly to the customers. This is where Dell’s principle to eliminate the middle man began. With this premise in mind, high growth rates and attractive margins the building of the Dell name began. Soon, Dell would start a 24 hour complaint hotline and they would offer a supply of backup replacement equipment. By 1990, Dell computers had a distinctive line of its own personal computers which won several trade magazine awards for service and products. By 1990 microcomputers accounted for 40% of all computers sold. And there was major competition the brands helping to drive down the costs of manufacturing as well the cost for the consumers. With the development and success of Dell and their direct to consumer sales as well as their laid back sales manner, imitators such as Gateway 2000 and CompuAdd began business. While focusing on the competition Dell expanded in to the retail market attempti ng to gain more revenue. However, this was unsuccessful since Dell overshot the target budget of sales, finding them in a cash crunch. It was then decided on that that needed to do something different. They needed to stand out again