Dell 2006 Annual Report Download - page 41

Table of Contents
Overview
Our Company
As a leading technology company, we offer a broad range of product categories, including desktop computer systems,
mobility products, servers, storage, software and peripherals, and services. We are the number one supplier of desktop and
notebook systems in the United States, and the number two supplier worldwide. Our past performance has been the result of
a persistent focus on delivering directly to our customers relevant technology and services at the best value.
Our business strategy is evolving. Historically we utilized our direct customer model and highly efficient manufacturing and
logistics to lower the cost of technology for our customers. We are now simplifying information technology for our customers
from point of sale to the usability of our products to the service solutions we sell. Using this strategy, we strive to provide the
best possible customer experience by offering superior value; high-quality; relevant technology; customized systems;
superior service and support; and differentiated products and services that are easy to buy and use. We also offer various
financing alternatives, asset management services, and other customer financial services for business and consumer
customers. To reach even more customers globally we have launched new distribution channels to reach commercial
customers and individual consumers around the world.
Although the focus of our business strategy is selling directly to customers, we also utilize indirect sales channels when there
is a business need. During Fiscal 2008, we began offering Dell DimensionTM desktop computers and InspironTM notebook
computers in retail stores in the Americas and announced partnerships with retailers in the U.K., Japan, and China. These
actions represent one of the first steps in our retail strategy, which will allow us to extend our model and reach customers
that we have not been able to reach directly.
We manufacture most of the products we sell and have manufacturing locations worldwide to service our global customer
base. Our build-to-order manufacturing process is designed to allow us to significantly reduce cost while simultaneously
providing customers the ability to customize their product purchases. We also have relationships with third-party original
equipment manufacturers that build some of our products (such as printers and projectors) to our specifications, and we are
exploring the expanded use of original design manufacturing partnerships and manufacturing outsourcing relationships in
order to deliver products faster and better serve our customers in certain markets.
Current Business Environment
We participate in a highly competitive industry that is subject to aggressive pricing and strong competitive pressures;
however, we believe that our growth potential remains strong. In the U.S., rising energy prices, weakening real estate
markets, and inflationary pressures may lead to slower economic growth, which may affect IT and consumer spending during
the fourth quarter of Fiscal 2008. A slow down in the U.S. economy could adversely impact other regional markets. Economic
conditions in our international markets, which are key to our expansion goals, are highlighted by growing economies in
Central and Eastern Europe, expansion in Asia Pacific-Japan ("APJ"), and continued development in Latin America. Overall,
expected industry growth is in line with prior year growth.
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