Dell 2008 Annual Report Download - page 5

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 risk factors affecting our business and prospects, see "Part I — Item 1A — Risk Factors."
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 full 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.
ITEM 1 —BUSINESS
General
Dell listens to customers and delivers innovative technology and services they trust and value. As a leading technology company, we offer a broad
range of product categories, including mobility products, desktop PCs, software and peripherals, servers and networking, services, and storage.
According to IDC, we are the number one supplier of computer systems in the United States and the number two supplier worldwide.
Our company is a Delaware corporation and was founded in 1984 by Michael Dell on a simple concept: by selling computer systems directly to
customers, we can best understand their needs and efficiently provide the most effective computing solutions to meet those 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. Our
corporate headquarters are located in Round Rock, Texas, and we conduct operations worldwide through our subsidiaries. To optimize our global
supply chain to best serve our global customer base, we have manufacturing locations around the world and are expanding our relationships with
third-party original equipment manufacturers. When we refer to our company and its business in this report, we are referring to the business and
activities of our consolidated subsidiaries. We operate principally in one industry, and we manage our business in four operating segments: Americas
Commercial; Europe, Middle East and Africa ("EMEA") Commercial; Asia Pacific-Japan ("APJ") Commercial; and Global Consumer.
We are committed to managing and operating our business in a responsible and sustainable manner around the globe. This includes our commitment
to environmental responsibility in all areas of our business. See "Part I — Item 1— Business — Sustainability." This also includes our focus on
maintaining a strong control environment, high ethical standards, and financial reporting integrity. See "Part II — Item 9A — Controls and
Procedures."
Business Strategy
Direct relationships with our customers give us an advantage of seeing changing customer requirements and needs earlier than companies who do
not have the same breadth of direct relationships. As a result, we are able to develop products with simpler and more productive technology to better
serve our customers. As we continue to expand our global presence, we are further diversifying our revenue and profit streams. Our strategy is to
focus on higher margin products, services, and solutions to increase overall profitability as we balance our liquidity, profitability, and growth. We
are also focused on improving our competitiveness by reducing overall costs. In May 2008, we announced a $3 billion cost reduction initiative,
which includes both cost of goods sold and operating expenses. In the fourth quarter of Fiscal 2009, we identified additional savings opportunities
and have increased our cost-reduction target to $4 billion by the end of Fiscal 2011. Our growth strategy involves reaching more customers
worldwide through new distribution partners, such as retail, expanding our relationships with value-added resellers and distributors, and augmenting
select areas of our business through targeted acquisitions. Our goal continues to be to optimize the balance of liquidity, profitability, and growth with
a focus on increasing the mix of our product portfolio to higher margin products and recurring revenue streams.
• Provide great value to customers and partners through direct relationships. We are committed to innovating without legacy, creating efficient
solutions, and providing price, performance, and feature leadership across all of our businesses. In addition, we will deliver the power of cloud
computing and connect with our customers through the Internet. We are focused on helping customers identify and remove unnecessary cost and
complexity in IT architecture and operations. In addition, we seek to broaden our profit stream to capture complementary opportunities in new
solutions for customers that include search, services, and 3G originations. To that end, during Fiscal 2009 we released a broad lineup of dedicated
virtualization solutions, including software, servers, services, and storage.
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