Dell 2002 Annual Report Download - page 4

Table of Contents
This Report contains forward-looking statements that are based on Dell's current expectations. Actual results in future periods may differ materially from
those expressed or implied by those forward-looking statements because of a number of risks and uncertainties. For a discussion of factors affecting
Dell's business and prospects, see "Item 1 — Business — Factors Affecting Dell's Business and Prospects."
PART I
ITEM 1 — BUSINESS
General
Dell Computer Corporation, with annual revenue of $35.4 billion, is a premier provider of computing products and services. As result of its direct business
model, Dell is the leading seller of computer systems worldwide and the number one seller in all customer segments in the United States.
Dell was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to customers, it could best understand customer needs
and efficiently provide the most effective computing solutions to meet those needs. Dell's climb to market leadership is the result of a relentless focus on
delivering the best customer experience by selling computer systems and services directly to customers.
Dell is a Delaware corporation that was incorporated in May 1984, succeeding to the business of a predecessor Texas corporation. Dell is based in Round
Rock, Texas and conducts operations worldwide through wholly owned subsidiaries. See "Item 1 — Business — Geographic Areas of Operations." Unless
otherwise specified, references in this Report to Dell include its consolidated subsidiaries. Dell operates principally in one industry segment.
Dell's common stock is listed on The Nasdaq National Market under the symbol DELL. See "Item 5 — Market for Registrant's Common Equity and Related
Stockholder Matters — Market Information."
Business Strategy
Dell's business strategy combines its direct customer model with a highly efficient manufacturing and supply chain management organization and an emphasis
on standards-based technologies. This strategy enables Dell to provide customers with superior value; high-quality, relevant technology; customized systems;
superior service and support; and products and services that are easy to buy and use. The key tenets of Dell's business strategy are as follows:
• A direct relationship is the most efficient path to the customer. Dell believes the most efficient path to the customer is through a direct relationship. Direct
customer relationships provide a constant flow of information about customers' plans and requirements and enable Dell to continually refine its product
offerings. Further, the direct model eliminates the need to support an extensive network of wholesale and retail dealers. As a result, Dell reduces customers'
prices by avoiding expenditures associated with the retail channel, such as higher inventory carrying costs, obsolescence associated with technology
products, and retail mark-ups.
• Customers can purchase custom-built products and custom-tailored services. The direct model allows customers to purchase custom-built products and
custom-tailored services. Dell believes this is the most effective business model for providing solutions that truly address customer needs. Further, Dell's
flexible, build-to-order manufacturing process enables Dell to achieve faster inventory turnover and reduced inventory levels. This allows Dell to rapidly
incorporate new technologies and components into its product offerings and to rapidly pass component cost savings directly to its customers.
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