Dell

A.

Case Abstract
This is a comprehensive strategic management case that includes the companys financial statements, organization chart, competitor information, and industry trends. Sufficient internal and external data are provided to enable students to evaluate current strategies and recommend a three-year strategic plan for the company. Dell is a diversified information-technology firm that sells computer products and services directly to customers worldwide. Recognized by Fortune magazine as America's most admired company and No. 3 globally, Dell designs, builds and delivers innovative, tailored systems that provide customers with exceptional value. Dells 2005 revenues were close to $55 billion and the company had 55,200 employees at year end. The company phone is 512-338-4400 and its Web site is http://www.dell.com. Headquartered in Round Rock, Texas, Dell offers enterprise systems, which include servers, storage, workstations, and networking products; client systems, such as notebook and desktop computer systems; printing and imaging systems; and software and peripherals, including titles, monitors, plasma and LCD televisions, MP3 players, handhelds, and notebook accessories. The company also offers various services, including information technology management services; professional services in technology consulting, application development, solutions integration, and infrastructure design; deployment services; support services; and training and certification services. In addition, it offers a range of financing alternatives, asset management services, and other customer financial services for its business and consumer customers in the United States. Dell faces large, fierce competitors such as Hewlett-Packard, Google, Apple Computer, and IBM. Dells customers include large corporate, government, healthcare, and education accounts, as well as small-to-medium businesses and individual customers. Dell is unique among rivals in that it markets and sells its products and services directly to its customers. The company was founded by Michael S. Dell in 1984 and he is still the firms CEO today.

B.

Vision Statement (actual)

Its the way we do business. Its the way we interact with the community. Its the way we interpret the world around usour customers needs, the future of technology, and the global business climate. Whatever changes the future may bring, our visionDell Visionwill be our guiding force.

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(proposed) To become the worlds largest and most admired consumer electronics firm specializing in computer products and services.

C.

Mission Statement (actual)

Dells mission is to be the most successful Computer Company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability (proposed) Dells mission is to be the most innovative consumer electronics products company (2) in the world (3), reaching out to businesses, institutional organizations, and individual customers (1). Dell strives to produce the most technologically advanced (4) products to make life and work easier and more enjoyable. Dells uniqueness centers around its tailoring of products and services for individual customers (7). Dell employees (9) respect all laws, values, and cultures wherever the firm does business (6). As Americas most admired firm, Dell strives to profitably grow (5) in all markets while contributing positively in every community we call home (8). 1. 2. 3. 4. 5. 6. 7. 8. 9. Customer Products or services Markets Technology Concern for survival, profitability, growth Philosophy Self-concept Concern for public image Concern for employees

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D.

External Audit
Opportunities 1. Demand for personal computers continues to grow. 2. Many customers switching from desktops to notebooks. 3. Microsoft desires to partner with Dell. 4. Consumer electronics is a profitable business. 5. Higher consumer spending in the US. 6. Incorporated managed and professional services. 7. Global enterprise systems. 8. Training and certification program. 9. Financial services offered. 10. Growth in the color printer market. Threats
1. 2.

3. 4. 5. 6. 7. 8. 9.

Consolidation in the PC industry (i.e., Lenove Group Ltd. of China purchase PC division of IBM in May 2005). Higher oil prices could crimp consumers spending. Commercial demand fails to accelerate. Competitors are strong. Slow growth in the PC market. Component price fluctuation Price for computing power has decreased. Computer market has broadened. Currency fluctuations in the international markets.

CPM Competitive Profile Matrix

Critical Success Factors Market Share Price Financial Position Product Quality Consumer Loyalty Advertising Management Global Expansion Innovation Web Development Total Weight 0.10 0.10 0.15 0.15 0.15 0.04 0.06 0.06 0.14 0.05 1.00 Apple Rating Weighted Score 2 0.20 2 0.20 3 0.45 4 0.60 4 0.60 4 0.16 4 0.24 2 0.12 4 0.56 3 0.15 3.28 HP Rating 3 3 4 3 2 2 3 2 2 2 Weighted Score 0.30 0.30 0.60 0.45 0.30 0.08 0.18 0.12 0.28 0.10 2.71 Dell Rating Weighted Score 4 0.40 4 0.40 3 0.45 3 0.45 3 0.45 3 0.12 3 0.18 3 0.18 2 0.28 3 0.15 3.06

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External Factor Evaluation (EFE) Matrix

Key External Factors Opportunities Demand for personal computers continues to grow. Many customers switching from desktops to notebooks Microsoft desires to partner with Dell. Consumer electronics is a profitable business. Higher consumer spending in the US. Incorporated managed and professional services. Global enterprise systems. Training and certification program. Financial services offered. Growth in the color printer market. Threats Consolidation in the PC industry (i.e., Lenove Group Ltd. of China purchase PC division of IBM in May 2005). Higher oil prices could crimp consumers spending. Commercial demand fails to accelerate. Competitors are strong. Slow growth in the PC market. Component price fluctuation Price for computing power has decreased. Computer market has broadened. Currency fluctuations in the international markets. Total Weight 0.100 0.050 0.100 0.050 0.025 0.025 0.050 0.025 0.025 0.025 0.050 0.050 0.025 0.150 0.100 0.025 0.025 0.050 0.050 1.00 Rating 3 4 4 2 2 2 3 2 3 2 3 3 2 3 2 4 3 3 2 Weighted Score 0.300 0.200 0.400 0.100 0.050 0.050 0.150 0.050 0.075 0.050 0.150 0.150 0.050 0.450 0.200 0.100 0.075 0.150 0.100 2.85

E.

Internal Audit
Strengths
1.

2.
3. 4.

5. 6.
7. 8.

9.
10.

Built-to-order personal computers sold directly to customers. Direct sales via mail, phone orders, and the Internet. Built-to-order personal computers eliminates markups of resellers. Built-to-order personal computers greatly reduce the costs and risks associated with carrying large stocks of parts, components, and finished goods. Dell is the current PC industry leader. Dell has regional and manufacturing plants globally. Dell is a well-known brand name. Dells direct-to-consumer strategy has given the company a substantial cost and profit margin over its rivals. Dell has a good relationship with the companys large corporate and government customers and continues to focus on these sales and service relationships. Dell holds 29.1 percent of the total market for personal computer sales in the Americas, putting Dell ahead of its competitors.

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Dells built-to-order manufacturing process results in rapid inventory turnover and reduced inventory levels. 12. To ensure defect-free products, testing is performed by Dell along the process and on the final computer product. 13. Dell has a wide range of customers including large corporations, government agencies, healthcare, educational institutes, small business, and individuals. 14. Dell is ranked # 1 by Technology Business because of its Intel-based server satisfaction for 27 of the past 29 quarters. 15. Dell divides its sales and marketing force among the various customer groups in order to meet each groups specific needs. 16. Dell advertises its products on the Internet, TV, and by mailing a broad range of marketing publications.
11.

Weaknesses
1.

2. 3.
4.

5. 6.

Dell has only two manufacturing plants and one regional office in the United States. Dell computers cannot be purchased in retail stores. Dell has over 40 locations globally yet Dell is not the #1 supplier in Asia Pacific, European, Middle East, or African segments. Dell rebrands printers purchased from Lexmark, which is a major production cost for Dell. Dell is too reliant on foreign suppliers, because of this a disruption of fuel supply could make the price of shipping go up. Dell is so large now that it might not be able to grow at the same pace.

Financial Ratio Analysis (January 2006)

Growth Rates % Sales (Qtr vs year ago qtr) Net Income (YTD vs YTD) Net Income (Qtr vs year ago qtr) Sales (5-Year Annual Avg.) Net Income (5-Year Annual Avg.) Dividends (5-Year Annual Avg.) Price Ratios Current P/E Ratio P/E Ratio 5-Year High P/E Ratio 5-Year Low Price/Sales Ratio Price/Book Value Price/Cash Flow Ratio Profit Margins Gross Margin Pre-Tax Margin Net Profit Margin 5-Yr Gross Margin (5-Year Avg.) 5-Yr Pre-Tax Margin (5-Year Avg.) 5-Yr Net Profit Margin (5-Year Avg.) Financial Condition Debt/Equity Ratio Dell 11.30 7.70 (28.40) 11.94 13.76 NA 23.2 71.1 19.3 1.30 14.61 19.60 18.7 8.3 6.0 19.1 8.5 6.0 0.10 Industry 18.00 78.90 17.40 5.00 NA NA 31.6 NA NA 1.88 10.57 26.80 20.2 8.5 6.2 20.3 5.8 3.8 0.06 SP-500 14.20 16.30 17.00 4.93 10.40 4.27 18.8 64.8 17.4 1.48 2.83 12.40 47.2 11.9 8.0 47.3 9.4 5.8 1.06

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Current Ratio Quick Ratio Interest Coverage Leverage Ratio Book Value/Share Investment Returns % Return On Equity Return On Assets Return On Capital Return On Equity (5-Year Avg.) Return On Assets (5-Year Avg.) Return On Capital (5-Year Avg.) Management Efficiency Income/Employee Revenue/Employee Receivable Turnover Inventory Turnover Asset Turnover Adapted from www.cnbc.com Date Avg. P/E 01/05 31.20 01/04 29.60 01/03 33.20 01/02 51.40 01/01 45.20 Adapted from www.cnbc.com Date Book Value/ Share 01/05 $2.61 01/04 $2.46 01/03 $1.89 01/02 $1.80 01/01 $2.16 Adapted from www.cnbc.com

1.2 0.9 NA 4.7 2.05 66.9 14.1 60.6 40.4 13.3 37.0 58,000 982,000 12.0 88.4 2.5 Price/Sales 2.11 2.06 1.74 2.29 2.13 Debt/Equity 0.08 0.08 0.10 0.11 0.09

1.5 1.2 NA 2.9 3.50 34.6 12.0 32.6 17.0 7.1 15.7 63,000 1 Mil 12.2 66.8 2.1 Price/Book 16.00 13.59 12.62 15.27 12.09 ROE (%) 46.9 42.1 43.5 26.5 39.8

1.4 0.9 3.5 5.7 13.26 15.3 2.7 7.4 11.9 2.0 5.6 29,000 367,000 7.7 7.8 0.4 Net Profit Margin (%) 6.2 6.4 6.0 4.0 7.0

ROA (%) 13.1 13.7 13.7 9.2 16.6

Interest Coverage NA 267.0 179.1 NA NA

Net Worth Analysis (January 2006 in millions)

1. Stockholders Equity + Goodwill = $6,485 + 0 2. Net Income x 5 = $3,043 x 5= 3. Share Price = $30.00/EPS(1.29) = 38.70 x Net Income $3,354 = 4. Number of Shares Outstanding x Share Price = 2,354 x $30.00 = Method Average $ 6,485 $ 15,215 $ 129,800 $ 70,620 $55,530

Internal Factor Evaluation (IFE) Matrix

Key Internal Factors Strengths Built-to-order personal computers sold directly to customers. Direct sales via mail, phone orders, and the Internet. Built-to-order personal computers eliminates Weight 0.100 0.050 0.025 Rating 4 3 3 Weighted Score 0.400 0.150 0.075

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markups of resellers. Built-to-order personal computers greatly reduce the costs and risks associated with carrying large stocks of parts, components, and finished goods. Dell is the current PC industry leader. Dell has regional and manufacturing plants globally. Dell is a well-known brand name. Dells direct-to-consumer strategy has given the company a substantial cost and profit margin over its rivals. Dell has a good relationship with the companys large corporate and government customers and continues to focus on these sales and service relationships. Dell holds 29.1% of the total market for personal computer sales in the Americas, putting Dell ahead of its competitors. Dells built-to-order manufacturing process results in rapid inventory turnover and reduced inventory levels. To ensure defect-free products, testing is performed by Dell along the process and on the final computer product. Dell has a wide range of customers including large corporations, government agencies, healthcare, educational institutes, small business, and individuals. Dell is ranked # 1 by Technology Business because of its Intel-based server satisfaction for 27 of the past 29 quarters. Dell divides its sales and marketing force among the various customer groups in order to meet each groups specific needs. Dell advertises its products on the Internet, TV, and by mailing a broad range of marketing publications. Weaknesses Dell has only two manufacturing plants and one regional office in the United States. Dell computers cannot be purchased in retail stores. Dell has over 40 locations globally yet Dell is not the #1 supplier in Asia Pacific, European, Middle East, or African segments. Dell rebrands printers purchased from Lexmark, which is a major production cost for Dell. Dell is too reliant on foreign suppliers, because of this a disruption of fuel supply could make the price of shipping go up. Dell is so large now that it might not be able to grow at the same pace. Total

0.050 0.100 0.050 0.050 0.050 0.0250

3 4 4 4 3 3

0.150 0.400 0.200 0.200 0.150 0.075

0.050 0.050 0.050 0.050

3 3 3 4

0.150 0.150 0.150 0.200

0.050 0.025 0.025 0.025 0.025 0.050 0.025 0.050 0.025 1.00

4 3 4 2 1 2 1 2 1

0.20 0.075 0.100 0.050 0.025 0.100 0.025 0.100 0.025 3.15

F.

SWOT Matrix
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Strengths 1. Built-to-order personal computers sold directly to customers. 2. Direct sales via mail, phone orders, and the Internet. 3. Built-to-order personal computers eliminates markups of resellers. 4. Built-to-order personal computers greatly reduce the costs and risks associated with carrying large stocks of parts, components, and finished goods. 5. Dell is the current PC industry leader. 6. Dell has regional and manufacturing plants globally. 7. Dell is a well-known brand name. 8. Dells direct to consumer strategy has given the company a substantial cost and profit margin over its rivals. 9. Dell has a good relationship with the companys large corporate and government customers and continues to focus on these sales and service relationships. 10. Dell holds 29.1% of the total market for personal computer sales in the Americas putting Dell ahead of its competitors. 11. Dells built-to-order manufacturing process results in rapid inventory turnover and reduced inventory levels. 12. To ensure defect-free products, testing is performed by Dell along the process and on the final computer product. 13. Dell has a wide range of customers including large corporations, government agencies, healthcare, educational institutes, small business, and individuals. 14. Dell is ranked # 1 by Technology Business because of its Intel-based server satisfaction for 27 of the past

Weaknesses 1. Dell has only two manufacturing plants and one regional office in the United States. 2. Dell computers cannot be purchased in retail stores. 3. Dell has over 40 locations globally yet Dell is not the #1 supplier in Asia Pacific, European, Middle East, or African segments. 4. Dell rebrands printers purchased from Lexmark, which is a major production cost for Dell. 5. Dell is too reliant on foreign suppliers, because of this a disruption of fuel supply could make the price of shipping go up. 6. Dell is so large now that it might not be able to grow at the same pace.

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Opportunities 1. Demand for personal computers continues to grow. 2. Growth from desktops to notebooks. 3. Partnership with Microsoft. 4. Expansion of product portfolio and consumer electronics. 5. Higher consumer spending in the US. 6. Incorporated managed and professional services. 7. Global enterprise systems. 8. Training and certification program. 9. Financial services offered. 10. Growth in the color printer market. Threats 1. Consolidation in the PC industry (i.e., Lenove Group Ltd. of China purchase PC division of IBM in May 2005). 2. Higher oil prices could crimp consumers spending. 3. Competitive landscape. 4. Commercial demand fails to accelerate. 5. Threat from competitors. 6. Slow growth in the PC market. 7. Component price fluctuation 8. Price for computing power has decreased. 9. Computer market has broadened. 10. Competitors in the commercial market have increased. 11. Currency fluctuations in the international markets.

29 quarters. 15. Dell divides its sales and marketing force among the various customer groups in order to meet each groups specific needs. 16. Dell advertises its products on the Internet, TV, and by mailing a broad range of marketing publications. S-O Strategies 1. Further expand into the personal computer market (S1, S5, O1, O2, O4). 2. Ensure computers are compatible with most technological updates (S14, O1, O4).

W-O Strategies 1. Build more manufacturing firms and retail offices in the United States (W1, W3, O5). 2. Continue to expand the color printer market (W4, O10).

S-T Strategies 1. Offer discounts on products for commercial consumers (S9, T4). 2. Increase mail-in rebates to minimize the threat from competitors (S15, T3, T5).

W-T Strategies 1. Hedge threats from US companies by increasing marketing efforts into Asia and Europe, (T1,W3).

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G.

SPACE Matrix
FS 6 5 4 3 2 1

Conservative

Aggressive

CA

-6

-5

-4

-3

-2

-1 -1 -2 -3 -4 -5 -6

IS

Defensive

ES

Competitive

Financial Strength (FS) Return on Investment Leverage Liquidity Working Capital Cash Flow Financial Strength (FS) Average

6 3 4 5 6 4.8

Environmental Stability (ES) Rate of Inflation Technological Changes Price Elasticity of Demand Competitive Pressure Barriers to Entry into Market Environmental Stability (ES) Average

-1 -5 -3 -4 -4 -3.4

Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Technological Know-how Control over Suppliers and Distributors Competitive Advantage (CA) Average

-1 -2 -2 -3 -2 -2.0

Industry Strength (IS) Growth Potential Financial Stability Ease of Entry into Market Resource Utilization Profit Potential Industry Strength (IS) Average

4 5 3 5 5 4.4

y-axis = FS + ES = 4.8 + (-3.4) = 1.4 x-axis = CA + IS = -2.0 + (+4.4) = 2.4

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H.

Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

1. 2. 3. 4. 5. 6. 7.

Market development Market penetration Product development Forward integration Backward integration Horizontal integration Related diversification

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I.

The Internal-External (IE) Matrix

The IFE Total Weighted Score Strong 3.0 to 4.0 I Americas Average 2.0 to 2.99 II Weak 1.0 to 1.99 III

High 3.0 to 3.99

Europe

Medium The EFE Total 2.0 to 2.99 Weighted Score

IV

VI

Dell

Low 1.0 to 1.99

VII

VIII

IX

Asia-Pacific

Hold and Maintain Region Americas Europe Asia-Pacific Total Revenues (1-28-05) $32,940M $10,787M $5,478M $49,205M Profit (operating) $2,978M $818M $458M $4,254M

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J.

QSPM
Build another manufacturing plant in the US. AS TAS ----------3.0 1.0 4.0 --1.0 3.0 ----4.0 ------4.0 --1.0 --------0.300 0.050 0.200 --0.025 0.150 ----0.200 ------0.050 --0.050 --Expand marketing efforts in Asia and Europe AS TAS ----------2.0 4.0 3.0 --2.0 2.0 ----3.0 ------2.0 --4.0 --------0.200 0.200 0.150 --0.050 0.100 ----0.150 ------0.050 --0.200 ---

Strategic Alternatives Key Internal Factors Strengths Built-to-order personal computers sold directly to customers. Direct sales via mail, phone orders, and the Internet. Built-to-order personal computers eliminates markups of resellers. Built-to-order personal computers greatly reduce the costs and risks associated with carrying large stocks of parts, components, and finished goods. Dell is the current PC industry leader. Dell has regional and manufacturing plants globally. Dell is a well-known brand name. Dells direct-to-consumer strategy has given the company a substantial cost and profit margin over its rivals. Dell has a good relationship with the companys large corporate and government customers and continues to focus on these sales and service relationships. Dell holds 29.1% of the total market for personal computer sales in the Americas, putting Dell ahead of its competitors. Dells built-to-order manufacturing process results in rapid inventory turnover and reduced inventory levels. To ensure defect free products, testing is performed by Dell along the process and on the final computer product. Dell has a wide range of customers including large corporations, government agencies, healthcare, educational institutes, small business, and individuals. Dell is ranked # 1 by Technology Business because of its Intel-based server satisfaction for 27 of the past 29 quarters. Dell divides its sales and marketing force among the various customer groups in order to meet each groups specific needs. Dell advertises its products on the Internet, TV, and by mailing a broad range of marketing publications. Weaknesses Dell has only two manufacturing plants and one regional office in the United States. Dell computers cannot be purchased in retail stores. Dell has over 40 locations globally yet Dell is not the #1 supplier in Asia Pacific, European, Middle East, or African segments. Dell rebrands printers purchased from Lexmark, which is a major production cost for Dell. Dell is too reliant on foreign suppliers, because of this a Weight 0.100 0.050 0.025 0.050 0.100 0.050 0.050 0.050 0.025 0.050 0.050 0.050 0.050 0.050 0.025 0.025 0.025 0.025 0.050 0.025

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disruption of fuel supply could make the price of shipping go up. Dell is so large now that it might not be able to grow at the same pace. SUBTOTAL

0.050 0.025 1.00

3.0 1.0

0.150 0.025 1.20

1.0 2.0

0.050 0.050 1.20

Key External Factors Opportunities Demand for personal computers continues to grow. Many consumers switching from desktops to notebooks. Microsoft desires to partner with Dell. Consumer electronics is a profitable business. Higher consumer spending in the US. Incorporated managed and professional services. Global enterprise systems. Training and certification program. Financial services offered. Growth in the color printer market. Threats Consolidation in the PC industry (i.e., Lenove Group Ltd. of China purchase PC division of IBM in May 2005). Higher oil prices could crimp consumers spending. Commercial demand fails to accelerate. Competitors are strong. Slow growth in the PC market. Component price fluctuation Price for computing power has decreased. Computer market has broadened. Currency fluctuations in the international markets. SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE

Weight 0.100 0.050 0.100 0.050 0.025 0.025 0.050 0.025 0.025 0.025 0.050 0.050 0.025 0.150 0.100 0.025 0.025 0.050 0.050 1.00

Build another manufacturing plant in the US. AS TAS 2.0 0.200 --------3.00 0.150 3.00 0.075 ----2.0 0.100 ------------2.0 ----2.0 --------1.0 0.100 ----0.300 --------0.050 0.98 2.18

Expand marketing efforts in Asia and Europe AS TAS 4.0 0.400 --------1.0 0.050 1.0 0.025 ----4.0 0.200 ------------4.0 ----3.0 --------3.0 0.200 ----0.450 --------0.150 1.48 2.68

K.

Recommendations
Add two new manufacturing plants in the United States totaling $250M each. Expand into Europe and Asia building new manufacturing plants and retail stores at a cost of $5B Continue research and development in the color printer market for $50M Amount Needed Over Next 3 Years = $5.3 Billion

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L.

EPS/EBIT Analysis
$ Amount Needed: $ 5,300M Stock Price: $30 Tax Rate: 32% Interest Rate: 7% # Shares Outstanding: 2,354M
Common Stock Financing Debt Financing Recession Normal Boom Recession Normal $2,000,000,000 $4,000,000,000 $6,000,000,000 $2,000,000,000 $4,000,000,000 0 0 0 371,000,000 371,000,000 2,000,000,000 4,000,000,000 6,000,000,000 1,629,000,000 3,629,000,000 640,000,000 1,280,000,000 1,920,000,000 521,280,000 1,161,280,000 1,360,000,000 2,720,000,000 4,080,000,000 1,107,720,000 2,467,720,000 2,530,666,667 2,530,666,667 2,530,666,667 2,354,000,000 2,354,000,000 0.54 1.07 1.61 0.47 1.05 Boom $6,000,000,000 371,000,000 5,629,000,000 1,801,280,000 3,827,720,000 2,354,000,000 1.63

EBIT Interest EBT Taxes EAT # Shares EPS

EBIT Interest EBT Taxes EAT # Shares EPS

70 Percent Stock - 30 Percent Debt 70 Percent Debt - 30 Percent Stock Recession Normal Boom Recession Normal Boom $2,000,000,000 $4,000,000,000 $6,000,000,000 $2,000,000,000 $4,000,000,000 $6,000,000,000 111,300,000 111,300,000 111,300,000 259,700,000 259,700,000 259,700,000 1,888,700,000 3,888,700,000 5,888,700,000 1,740,300,000 3,740,300,000 5,740,300,000 604,384,000 1,244,384,000 1,884,384,000 556,896,000 1,196,896,000 1,836,896,000 1,284,316,000 2,644,316,000 4,004,316,000 1,183,404,000 2,543,404,000 3,903,404,000 2,477,666,667 2,477,666,667 2,477,666,667 2,407,000,000 2,407,000,000 2,407,000,000 0.52 1.07 1.62 0.49 1.06 1.62

M.

Epilogue
On January 5, 2006, at the International Consumer Electronics Show in Las Vegas, CEO Michael Dell introduced several new products aimed at the high-end gaming, entertainment, and multimedia markets. The new Dell products include the XPS desktop and Inspiron notebook systems and a 30-inch LCD monitor. Mr. Dell also previewed a Dell XPS mobile concept based on a new industrial design and complete with a 20.1-inch display with high-definition TV. The new XPS product features integrated surround-sound audio, and a slim slot-load DVD player mean no compromise for enthusiasts or users performing demanding multimedia tasks. When it comes to gaming and home entertainment, Mr. Dell believes that the personal computer continues to reign as the consumer product of choice. In 2006, his firm will be the first to offer a desktop with certified NVIDIA quad core graphics, one of the first notebooks with dual-core technology and the first 30-inch flat panel monitor list-priced less than $2,200. With the limited-edition XPS 600 Renegade(TM) offered new in 2006, Dell is the first firm to support two new NVIDIA GeForce 7800 SLI graphics cards, which can link four graphics processors to speed up overall video performance or draw images with intense realism. The new desktop system also features Dell's first overclocked and

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factory-set 4.26 GHz Intel Extreme Edition dual-core processor. Overclocking is designed to increase the processor speed beyond mainstream usage to deliver over-thetop performance critical to extreme gamers. Dell's implementation of the processor is supported by the expertise of specially trained XPS technicians. Dell continues to be one of the most admired firms in the world in terms of its management, marketing, finance, and information technology performance but H-P, IBM, Apple, and even foreign firms have taken aim on Dell as the firm to focus upon.

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