Dell Economics Term Paper

2018 words - 8 pages

Jason AlexanderEconomics 1A 92116March 21, 2013Term PaperIntroduction:Dell, Inc. is a company that was founded by Michael Dell November 4th, 1984 while he was a student of the University of Texas at Austin. With $1000 of his own capital, Michael Dell started to produce custom IBM compatible computers. In 1985, Michael Dell dropped out of school and obtained a loan from his family for $300,000 to expand his company. That same year, the company introduced the Turbo PC, which was the first Dell designed computer. Customers were able to specify which components they wanted and the computers were custom built to fit their needs. Because Dell ordered the components wholesale, he was able to offer these custom designed computers at a much lower price than any of his competitors. In its first year of trading Dell Inc. grossed more than $73 million dollars. Today the company has grown exponentially from its humble beginnings. According to Douglas Perry at tomshardware.com, Dell sells more than 11 million computers per year. (Perry). Based on this information, Dell is and has been a very successful company. Dell continues to be a leading manufacturer of PC's and their peripherals, such as monitors and printers. As long as Dell continues their smart management practices and continues to be innovative in the industry, they will continue to be a leading force in the computer industry.Economic Indicators:This paper will take an in depth look at two economic indicators, Consumer Confidence and Unemployment. It will determine the relation, if any, between these indicators and the success or lack thereof of Dell Inc. Since Consumer Confidence directly affects purchases made by consumers, one would expect it to be a direct factor in the success of a technology based sales company such as Dell. One would also expect the success of Dell or the lack thereof, to be directly tied in with the unemployment rate, because out of work citizens have no money for purchases such as computers and their peripherals. This paper will attempt to confirm the above hypothesis.Consumer confidence is a report compiled monthly a non-profit business group known as the Conference Board and the Federal Reserve. It consists of a survey of 3,000 households. It tells how consumers view current business and employment conditions, as well as their outlook on the business and employment conditions for the next six months. Despite the small sample size, the indicator is statistically accurate to a 99.0% degree of confidence with a +-2.5% degree of accuracy according to www.research-advisors.com. Based on data from their website, a sample size of 2654 random people would give you this level of confidence for the entire US population of roughly 315 million people. The key to this degree of accuracy is that the sample must consist of random people. Over the past two years, Consumer confidence has generally been high. At the beginning of 2011 it was on a down slope, but since then has been...

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