Dell 2008 Annual Report Download - page 25

Table of Contents
ITEM 7 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SPECIAL NOTE: This section, "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains
forward-looking statements that are based on our 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 risk factors
affecting our business and prospects, see "Part I — Item 1A — Risk Factors." This section should be read in conjunction with "Part II —
Item 8 — Financial Statements and Supplementary Data."
All percentage amounts and ratios were calculated using the underlying data in thousands. Unless otherwise noted, all references to industry
share and total industry growth data are for computer systems (including desktops, notebooks, and x86 servers), and are based on information
provided by IDC Worldwide Quarterly PC Tracker, February 17, 2009. Industry share data is for the calendar year and all our growth rates are
on a fiscal year-over-year basis. Unless otherwise noted, all references to time periods refer to our fiscal periods.
Overview
Our Company
As a leading technology company, we offer a broad range of product categories, including mobility, desktop PCs, software and peripherals, servers
and networking, services, and storage. We are the number one supplier of computer systems in the United States, and the number two supplier
worldwide.
We have manufacturing locations around the world and relationships with third-party original equipment manufacturers. This structure allows us to
optimize our global supply chain to best serve our global customer base. We continue to expand our supply chain which allows us to enhance
product design and features, shorten product development cycles, improve logistics, and lower costs, thus improving our competitiveness.
We were founded on the core principle of a direct customer business model, which included build to order hardware for consumer and commercial
customers. The inherent velocity of this model, which included a highly efficient global supply chain, allowed for low inventory levels and the
ability to be among the industry leaders in selling the most relevant technology, at the best value, to our customers. Our direct relationships with
customers also allowed us to bring to market products that featured customer driven innovation, thereby allowing us to be on the forefront of
changing user requirements and needs. Over time we have expanded our business model to include a broader portfolio of products, including
services, and we have also added new distribution partners, such as retail, system integrators, value added resellers, and distributors, which allow us
to reach even more end-users around the world. We also offer various financing alternatives, asset management services, and other customer
financial services for business and consumer customers. As a part of our overall growth strategy, we have executed targeted acquisitions to augment
select areas of our business with more products, services, and technology.
Our new distribution partnerships include the launch in Fiscal 2008 of our global retail initiative, offering select products in retail stores in the
Americas, Europe, Middle East, and Africa ("EMEA"), and Asia Pacific-Japan ("APJ") regions. In Fiscal 2008, we also launched PartnerDirect, a
global program that brings our existing value-added reseller programs under one umbrella including training, certification, deal registration, focused
sales and customer care, and a dedicated web portal.
We continue to simplify technology, enhance value, and lower costs for our customers while expanding our business opportunities. Underpinning
these goals is our commitment to achieving world-class competitiveness, any-to-any supply chain, services and solutions, and sales effectiveness.
We are currently focused on five key growth priorities which, when coupled with our core competencies, we believe will drive an optimal balance of
long-term sustained growth, profitability, and liquidity:
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Global Consumer — In the first quarter of Fiscal 2009, we realigned our management and financial reporting structure to focus on worldwide sales
to individual consumers and retailers as a part of an internal consolidation of our consumer business. Our global consumer business sells to
customers through our on-line store at www.dell.com, over the phone, and through our retail channel. The global consolidation of this business has
improved our global sales execution and coverage through better customer alignment, targeted sales force investments in rapidly growing
countries, and improved marketing tools. We are also designing new, innovative products with faster development cycles and competitive features
including the new Studio line of notebooks, which allow consumers greater personalization and self expression. Finally, we have rapidly expanded
our retail business in order to reach more consumers.
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