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DELIVERING THE GOODS 299

Dell computers were not sold by
computer retailers; instead they were
available directly from the manufacturer.
Dell took the bold step of cutting out
retailers to undercut the competition.

a company’s survival. For example,
in the past, many independent food
venues offered meals produced in a
traditional, labor-intensive manner,
cooked from scratch with fresh
ingredients. Some business chains,
looking to capitalize on the growing
demand for low-cost food, adopted Michael Dell
a simpler approach. They began to
Born in 1965 in Houston,
serve food that had been bought in
Texas, to an orthodontist
Dell’s simplified business model a prepared state and simply heated
father and a stockbroker
delivered lower costs, enabling in a microwave in response to a
mother, Michel Dell was a
the company to gain market share customer order. There was no need
natural entrepreneur. He made
by undercutting the prices charged for trained cooks, and no time spent his first $1,000 by dealing in
by rival computer suppliers. preparing fresh ingredients. stamps at 12-years-old, and
The success of Dell’s model of Removing these steps cuts costs sold newspaper subscriptions
selling directly to consumers was and enables the establishment to for the now-defunct Houston
adopted by companies in other offer lower prices to consumers Post. Dell attended pre-medical
industries. In 1996, Amazon, now without losing profit margins. college in Texas in 1983,
the world’s biggest online store, However, innovations such as but soon left to focus on his
began selling books online without these can be cyclical. A rising computer business, which
the need—or costs—of running market for freshly prepared food has he named PC’s Limited. Dell
a bookstore. led to new fast-food chains selling opened his first international
However, since 2000 Dell has meals prepared on the premises. In subsidiary in the UK two years
later, and in 1998 changed
lost ground to a revitalized the current climate, many companies
the business’s name to Dell
competition. Some companies are looking to cut costs by
Computer Corporation, making
copied Dell’s idea to sell computers streamlining processes. But the
it a public company and raising
directly to customers, while others, businesses most likely to survive
$30 million. In 1992, Dell
such as Hewlett-Packard, were able are those that can lower prices, but became the youngest-ever
to nullify Dell’s price advantage by not quality, for the consumer. ■ CEO of a Fortune 500 business
making their production process at 27. By 2000, the company’s
more efficient. The resurgence of direct-sales website (launched
Apple has also dented Dell’s market in 1996) was generating
share. Apple produces a range of revenue of $18 million per day.
products to suit different budgets, Dell resigned as CEO in 2004
and also allows its customers to Simplicity—the art of to focus on his charitable
make some adjustments to the maximizing the amount of work, but returned in 2007,
computer’s specifications. taking the business private
work not done—is essential. in 2013.
Principles behind
Simpler services The Agile Manifesto (2001) Key works
Companies that sell services also
work to improve efficiency by trying
1999 Direct from Dell:
to remove unnecessary steps from
Strategies That Revolutionized
their production systems. Sometimes an Industry
these changes are needed to ensure