May 24, 2001 : Dell Goes After Market Share

📅 May 24, 2001 - In a series of press briefings in Austin, Texas, James Vanderslice, president of Dell Computer Corp. (dell.com) has declared war on the company's competitors, announcing price-cutting measures designed to grab market share for Dell, as well as suggesting that it might be interested in making an acquisition.

Dell says that although it is already the world's number one computer maker, it intends to take advantage of the slowing economy, and the resulting fall in component prices, to take a bigger piece of the computer market, and possibly remove some of the competition.
The company says its direct sales model is better suited than other companies to take advantage of the cost of components, falling at about 1 percent per week. Dell says that because it keeps virtually no inventory, its direct sales model allows it to pass on the falling prices to its customers within three days, compared to as much as 60 days for some competitors.
And while Dell announced earlier in May that it had surpassed Compaq Computer Corp. as the world's top server maker on a units-shipped basis, the company says it has set its sights on taking the number one spot in the server and storage market.
Dell says it is pricing to capture the market. Once it has the footprints, says the company, it has good evidence that it will keep the account.
In addition to the marketing strategy, Vanderslice said Dell is considering using its $8 billion in cash for a strategic acquisition. While Dell has typically been reluctant to buy other companies because of its concerns that mergers usually fail, the company says it is on the lookout for possible purchases that may even include business not operating on the direct sale model.