Sie sind auf Seite 1von 36

Dell, Inc.

Type Public (NASDAQ: DELL SEHK: 4331)

Founded Austin, Texas (November 4, 1984) (as "PC's Limited").

IPO on June 22, 1988, at $8.50/share[1]: approximately 3 years and 7 months after founding
Headquarters Round Rock, Texas
United States

Key people Michael Dell, founder, Chairman and CEO

Don Carty, CFO Industry Technology Products Desktops
Printers Market cap $45.09 Billion USD (2008)[2] Revenue ▲$62.49 Billion USD (2008)[3]
Operating income ▲$3.4 billion USD (2008)[3] Net income ▲$2.9 billion USD (2008)[3]
Employees 88,200 worldwide[3] Subsidiaries Alienware
ASAP Software
EqualLogic Website

The multinational company Dell, Inc. — based in Round Rock, Texas — develops,
manufactures, sells, and supports personal computers and other computer-related products. As of
2008 Dell employs more than 88,000 people worldwide.[3]

Dell grew during the 1980s and 1990s to become (for a time) the largest seller of PCs and
servers. As of 2008, it held the second spot in computer-sales within the industry behind the
Hewlett-Packard Company. The company currently sells personal computers, servers, data
storage devices, network switches, software, computer peripherals and televisions.

In 2006, Fortune magazine ranked Dell as the 25th-largest company in the Fortune 500 list, 8th
on its annual Top 20 list of the most-admired companies in the United States. In 2007 Dell
ranked 34th and 8th respectively on the equivalent lists for the year. A 2006 publication
identified Dell as one of 38 high-performance companies in the S&P 500 which had consistently
out-performed the market over the previous 15 years.[4]

• 1 History
o 1.1 Background and origins
o 1.2 Dell and AMD
o 1.3 Dell and desktop Linux
 1.3.1 First attempt (2000)
o 1.4 Ubuntu on Dell systems
o 1.5 Personnel
• 2 Products
o 2.1 Scope and brands
o 2.2 Manufacturing
• 3 Technical support
o 3.1 Support-levels
o 3.2 Service-tags
o 3.3 DellConnect
o 3.4 World-wide technical support
o 3.5 Criticism of support
• 4 Commercial aspects
o 4.1 Traditional business model
o 4.2 Organization
o 4.3 Marketing
o 4.4 Criticisms of Dell's Laptop Security Marketing
 4.4.1 Dell kiosks
 4.4.2 Dell stores in the U.S.
 4.4.3 Dell Partner Program
 4.4.4 Retail in the U.S.
 4.4.5 Retail in Canada
 4.4.6 Direct retail in Eastern Europe
 4.4.7 Retail in the UK
 4.4.8 Retail in Australia
o 4.5 Competition
• 5 Environmental record
• 6 Lawsuits and other legal action
• 7 SEC investigation
• 8 Criticism
• 9 Further reading
• 10 Footnotes
• 11 See also

12 External links

Michael Dell, founder of Dell

[edit] Background and origins

While a student at the University of Texas at Austin in 1984, Michael Dell founded the company
as PC's Limited with capital of $1000.[5] Operating from Michael Dell's off-campus dorm room at
Dobie Center [1], the startup aimed to sell IBM PC-compatible computers built from stock
components. Michael Dell started trading in the belief that by selling personal computer-systems
directly to customers, PC's Limited could better understand customers' needs and provide the
most effective computing solutions to meet those needs. Michael Dell dropped out of school in
order to focus full-time on his fledgling business, after getting about $300,000 in expansion-
capital from his family.

In 1985, the company produced the first computer of its own design — the "Turbo PC", sold for
US$795[6][need quote] — which contained an Intel 8088-compatible processor running at a speed of
8 MHz. PC's Limited advertised the systems in national computer-magazines for sale directly to
consumers, and custom-assembled each ordered unit according to a selection of options. This
offered buyers prices lower than those of retail brands, but with greater convenience than
assembling the components themselves. Although not the first company to use this model, PC's
Limited became one of the first to succeed with it. The company grossed more than $73 million
in its first year.

The company changed its name to "Dell Computer Corporation" in 1988. In 1989, Dell
Computer set up its first on-site-service programs in order to compensate for the lack of local
retailers prepared to act as service centers. Also in 1987, the company set up its first operations
in the United Kingdom; eleven more international operations followed within the next four years.
In June 1988, Dell's market capitalization grew by $30 million to $80 million from its initial
public offering of 3.5 million shares at $8.50 a share. In 1990, Dell Computer Corporation tried
selling its products indirectly through warehouse clubs and computer superstores, but met with
little success, and the company re-focused on its more successful direct-to-consumer sales
model. In 1992, Fortune magazine included Dell Computer Corporation in its list of the world's
500 largest companies.

In 1996, Dell began selling computers via its web site.

In 1999, Dell overtook Compaq to become the largest seller of personal computers in the United
States of America with $25 billion in revenue reported in January 2000.

In 2002, Dell attempted to expand by tapping into the multimedia and home-entertainment
markets with the introduction of televisions, handhelds, and digital audio players. Dell has also
produced Dell-brand printers for home and small-office use.

In 2003, at the annual company meeting, the stockholders approved changing the company name
to "Dell Inc." to recognize the company's expansion beyond computers.

In 2004, the company announced that it would build a new assembly-plant near Winston-Salem,
North Carolina; the city and county provided Dell with $37.2 million in incentive packages; the
state provided approximately $250 million in incentives and tax breaks. In July, Michael Dell
stepped aside as Chief Executive Officer while retaining his position as Chairman of the Board.
Kevin Rollins, who had held a number of executive posts at Dell, became the new CEO.

In 2005, the share of sales coming from international markets increased, as revealed in the
company's press releases for the first two quarters of its fiscal 2005 year. In February 2005 Dell
appeared in first place in a ranking of the "Most Admired Companies" published by Fortune
magazine. In November 2005 BusinessWeek magazine published an article titled "It's Bad to
Worse at Dell" about shortfalls in projected earnings and sales, with a worse-than-predicted
third-quarter financial performance — a bad omen for a company that had routinely
underestimated its earnings. Dell acknowledged that faulty capacitors on the motherboards of the
Optiplex GX270 and GX280 had already cost the company $300 million. The CEO, Kevin
Rollins, attributed the bad performance partially to Dell's focus on low-end PCs.

In 2006, Dell purchased the computer hardware manufacturer Alienware. Dell Inc.'s plan
anticipated Alienware continuing to operate independently under its existing management.
Alienware expected to benefit from Dell's efficient manufacturing system.[7]

On January 31, 2007, Kevin B. Rollins, CEO of the company since 2004, resigned as both CEO
and as a director, and Michael Dell resumed his former role as CEO. Investors and many
shareholders had called for Rollins' resignation because of poor company performance. At the
same time, the company announced that, for the fourth time in five quarters, earnings would fail
to reach consensus analyst-estimates.

In February 2007, Dell became the subject of formal investigations by the US SEC[8] and the US
Attorney General for the Southern District of New York.[9] The company has not formally filed
financial reports for either the third or fourth fiscal quarter of 2006, and several class-action
lawsuits[10] have arisen in the wake of its recent financial performance. Dell Inc's lack of formal
financial disclosure would normally subject the company to de-listing from the NASDAQ,[11] but
the exchange has granted Dell a waiver, allowing the stock to trade normally.[12]

On 1 March 2007, the company issued a preliminary quarterly earnings report which showed
gross sales of $14.4 billion, down 5% year-over-year, and net income of $687 million (30 cents
per share), down 33%. Net earnings would have declined even more if not for the effects of
eliminated employee bonuses, which accounted for six cents per share. NASDAQ extended the
company's deadline for filing financials to May 4.[13]
[edit] Dell and AMD

When Dell acquired Alienware early in 2006, some Alienware systems had AMD chips. On
August 17, 2006, a Dell press-release stated that starting in September 2006, Dell Dimension
desktop computers would have AMD processors and that later in the year Dell would release a
two-socket, quad-processor server using AMD Opteron chips, moving away from using Dell's
traditional Intel processors.

CNet's on August 17, 2006 cited Dell's CEO Kevin Rollins as attributing the move to
AMD processors to cost-advantage and to AMD technology. AMD's senior VP in commercial
business, Marty Seyer, stated: "Dell's wider embrace of AMD processor-based offerings is a win
for Dell, for the industry and most importantly for Dell customers."

On October 23, 2006, Dell announced new AMD-based servers — the PowerEdge 6950 and the
PowerEdge SC1435.

On November 1, 2006, Dell's website began offering notebooks with AMD processors (the
Inspiron 1501 with a 15.4-inch (390 mm) display) with the choice of a single-core MK-36
processor, dual-core Turion X2 chips or Mobile Sempron.

Dell and desktop Linux

First attempt (2000)

In 1998 Ralph Nader asked Dell (and five other major OEMs) to offer alternate operating
systems to Microsoft Windows, specifically including Linux, for which "there is clearly a
growing interest"[14][15] Possibly coincidentally, Dell started offering Linux notebook systems
which "cost no more than their Windows 98 counterparts" in 2000,[16] and soon expanded, with
Dell becoming "the first major manufacturer to offer Linux across its full product line"[17]
However, by early 2001 Dell had "disbanded its Linux business unit."[18]

The reason(s) for such a quick reversal remain the subject of debate. Court documents accused
Microsoft of coercing OEMs to drop Linux:

Microsoft executive Joachim Kempin described his plan of retaliation and coercion to shut down
competition from Linux: "I am thinking of hitting the OEM harder than in the past with anti-
Linux actions" and will "further try to restrict source code deliveries where possible and be less
gracious when interpreting agreements — again without being obvious about it," continuing "this
will be a delicate dance"[19]

While in a 2003 interview Michael Dell denied that Microsoft pressured Dell Inc. into doing an
about-face with regard to desktop Linux, citing a lack of sales: "unfortunately the desktop Linux
market didn't develop in volume. It's more of a server opportunity" but adding: "We continue to
offer Linux on the desktop and there is nothing else to say."[20] However, a 2004 report noted that
Dell no longer offered pre-installed desktop Linux:
So what does it mean "factory installed Linux"? If you want Dell to install Linux for you, first
add on $119. But here is the annoying part. They won't send you a computer with Linux pre-
installed. They sell you the computer and the boxes of software on the side, and then they make
an appointment to send you someone who comes to your house or business and installs it there.

Ubuntu on Dell systems

On February 26, 2007 Dell announced that it had commenced a program to sell and distribute a
range of computers with pre-installed Linux distributions as an alternative to Microsoft
Windows. Dell indicated that Novell's SUSE Linux would appear first.[22] However, Dell on
February 27, 2007 announced that its previous announcement related to certifying the hardware
as ready to work with Novell SUSE Linux and that it (Dell) had no plans to sell systems pre-
installed with Linux in the near future.[23] On March 28, 2007, Dell announced that it would
begin shipping some desktops and laptops with Linux pre-installed, although it did not specify
which distribution of Linux or which hardware would lead.[24] On April 18, 2007 a report
appeared suggesting that Michael Dell used Ubuntu on one of his home systems.[25] On May 1,
2007, Dell announced it will ship the Ubuntu Linux distribution.[26] On May 24, 2007, Dell
started selling models with Ubuntu Linux 7.04 pre-installed: a laptop, a budget computer, and a
high-end PC.[27]

On June 27, 2007, Dell announced on its Direct2Dell blog that it planned to offer more pre-
loaded systems (the new Dell Inspiron desktops and laptops). After the IdeaStorm site supported
extending the bundles beyond the US market, Dell later announced more international marketing.
On August 7, 2007, Dell officially announced that it would offer one notebook and one
desktop in the UK, France and Germany with Ubuntu "pre-installed". At LinuxWorld 2007 Dell
announced plans to provide Novell's SUSE Linux Enterprise Desktop on selected models in
China, "factory-installed".[29] On 30 November 2007 Dell reported shifting 40,000 Ubuntu PCs.
On 24 January 2008 Dell in Germany, Spain, UK and France launched a second laptop, a
XPS M1330 with Ubuntu 7.10, for 849 euro or GBP 599 upwards.[31] On 22 February 2008 Dell
announced plans to sell Ubuntu in Canada and in Latin America[32]


On January 31, 2007 Michael Dell returned to the company as CEO. As chairman of the board,
Mr. Dell had significant input into the company's operations during Rollins' years as CEO.
However with the return of Michael Dell as CEO, the company saw immediate changes in
operations, the exodus of many senior vice-presidents and new blood brought in from outside the

Departures announced include:

• Kevin Rollins, CEO[33]

• James Schneider, CFO[33]
• John Medica, senior vice president, consumer products[34]
• Joe Marengi, senior vice president, Americas[34]
• John Hamlin, senior vice president, worldwide online operations[35]
• Paul McKinnon, senior vice president, human resources[34]
• Rosenda Parra, senior vice president/general manager, home and small business group[36]
• Glenn E. Neland, senior vice president, procurement[37]

Additions announced include:

• Michael Dell, CEO and co-Chairman of the Board (previously Chairman of the Board)
• Don Carty, CFO and co-Chairman of the Board (previously Board member)
• Michael R. Cannon, former CEO of Solectron, as President, Global Operations[38]
• Ron Garriques, who formerly headed Motorola's mobile phone unit, as President, Global
Consumer Group[39]
• Stephen F. Schuckenbrock, Senior Vice President, Global Services[37]

Mr. Dell announced a number of initiatives and plans (part of the "Dell 2.0" initiative) to
improve the company's financial performance. These include:

• elimination of 2006 bonuses for employees with some discretionary awards

• reduction in the number of managers reporting directly to Mr. Dell from 20 to 12
• in a noted departure from previous years, "build, partner, and buy" to increase services
• reduction of "bureaucracy"

On April 23, 2008, Dell announced the closure of one of its biggest Canadian call-centers in
Kanata, Ontario — terminating approximately 1100 employees, with 500 of those redundancies
effective on the spot, and with the official closure of the center scheduled for the summer. (The
call-center had opened in 2006 after the city of Ottawa won a bid to host it. Less then a year
later, Dell Inc planned to double its workforce to nearly 3,000 workers and to add a new
building. Journalists cited a high Canadian dollar and suggested high pay-rates as among the
reasons for the cuts.[40] The company had also announced the shutdown of its Edmonton, Alberta
office, losing 900 jobs. In total, Dell announced the ending of about 8,800 jobs in 2007-2008 —
10% of its workforce.[41]

Scope and brands

The corporation markets specific brand names to different market segments:

• Business Class: including OptiPlex, Latitude, and Precision, where the company's
advertising emphasizes long life-cycles, reliability and serviceability:

• OptiPlex - office desktop computer systems

• n Series - desktop and notebook computers shipped with Linux or
FreeDOS installed
• Vostro - small-business desktop and notebook systems
• Latitude - commercially-focused notebooks
• Precision - workstation systems and high-performance notebooks. (Some
of them including Linux pre-installed.[42])
• PowerEdge - business servers
• PowerVault - direct-attach and some network-attached storage (NAS)
• PowerConnect - network switches
• Dell EMC - storage area networks (SANs)
• EqualLogic - enterprise class iSCSI SANs

• Home/Consumer Class: including Inspiron and XPS brands, emphasizing value,

performance and expandability:

• Inspiron - consumer desktop and notebook systems

• Studio - medium-end consumer slim hybrid desktop and laptop systems
• XPS - enthusiast and high-performance desktop and notebook systems
• Alienware (XPS Extreme) - high-performance gaming systems

• Peripherals: Dell has also diversified its product line to include peripheral products such
as USB keydrives, LCD televisions, and printers.

• Dell monitors LCD TVs, plasma TVs and projectors for HDTV and

• Services and support:

• Dell On Call - extended support services (mainly for the removal of

spyware and computer viruses)
• Dell Support Center - extended support services (similar to "Dell On
Call") for customers in the EMEA. The Solution Centers also support hardware
for customers outside of warranty.
• Dell Business Support - a commercial service-contract that provides an
industry-certified technician with a lower call-volume than in normal queues; it
covers hardware- and some software-support.
• Your Tech Team - a new support-queue available to home users who
purchased their systems through either Dell's website or Dell phone-centers.
These customers gain access to a specialized queue currently located in Tampa,
Florida. Customers can requesting a technician with whom they have worked
previously, and the technicians can troubleshoot a wider range of problems —
including some that would fall under the "Dell on Call" category. Data backup
and virus removal remain out-of-scope for this queue.

Dell also offers Red Hat and SUSE Linux for servers; as well as "bare-bones" computers without
pre-installed software (available on n Series by default and by request on XPS and Inspiron
systems) at significantly lower prices. Due to Dell's licensing contract with Microsoft, Dell
allegedly[citation needed] cannot offer those systems on their website and customers have to request
them explicitly. (Dell does offer those systems on their web site at
c=us&cs=04&l=en&s=bsd&redirect=1 ). Dell has to ship such systems with a FreeDOS disk
included in the box and must issue a so-called "Windows refund" or a merchandise credit after
sale of the system at the "regular" retail price.

• Discontinued products/brands:

• Axim - PDAs using Microsoft's Windows Mobile (discontinued April 9,

• Dimension - home and "small office, home office" desktop computers
(discontinued July 2007; replaced by Inspiron desktops)
• Dell Digital Jukebox - MP3 players (discontinued August 2006)
• Dell PowerApp - application-based severs
• Dell Omniplex - 486 and Pentium based desktop and tower computers that
were supported to run server and desktop operating systems.

[edit] Manufacturing

Dell has a general policy of manufacturing its products close to its customers, implementing just-
in-time (JIT) manufacturing. Assembly of desktop computers for the North American market
takes place at Dell plants in Lebanon TN, Austin TX, and Winston-Salem NC[citation needed]; with
servers built in Austin TX. Dell assembles computers for the EMEA market at Limerick in the
Republic of Ireland, and employs about 4,500 people in that country. European Manufacturing
Facility 1 (EMF1, opened in 1990) and EMF3 form part of the Raheen Industrial Estate near
Limerick. EMF2 (previously a Wang facility, later occupied by Flextronics, situated in
Castletroy) closed in 2002,[citation needed] and Dell Inc has consolidated production into EMF3
(EMF1 now contains only offices[44]). Construction of EMF4 in Łódź, Poland has started, with
production planned to start there in autumn 2007.[45]

Dell's assembly-plants in China and Malaysia assemble 95% of Dell notebooks. Dell Inc has
invested an estimated (U.S.) $60 million in a new manufacturing unit in Chennai, India, to
support the sales of its products in the Indian subcontinent. Indian-made products will bear the
"Made in India" mark on them. In 2007 the Chennai facility has the target of producing 400,000
desktop PCs, and in the later half of 2007 it will start producing notebook PCs and other
products.[citation needed]

Dell has a Brazilian plant in the city of Eldorado do Sul, close to the state capital Porto Alegre, in
the state of Rio Grande do Sul — that assembles the PowerEdge server line.[46]

According to a front-page article in the September 5, 2008 issue of the Wall Street Journal, Dell
has factories in the following locations: Austin, Texas; Winston-Salem, North Carolina;
Lebanon, Tennessee; Limerick, Ireland; Penang, Malaysia; Xiamen, China; Hortolandia, Brazil;
Chennai, India; Lodz, Poland; Miami, Florida; Athlone, Ireland.

Technical support

Dell routes technical support queries according to component-type and to the level of support
purchased. Dell Inc brands its service agreements at five levels for their business customers:[47]

1. Basic support provides business-hours telephone support and next business-day on-site
2. Silver support provides 24×7 telephone support and 4-hour on-site support after
telephone-based troubleshooting.
3. Gold support provides additional benefits over and above Silver support, including:
customer-declared severity; priority access to support; expedited escalation of support; 4-
hour on-site support in parallel with telephone-support.
4. Platinum Plus support provides additional benefits to Gold Support, including:
performance benchmarking; real-time tracking; custom planning and reporting; a
dedicated technical account-manager.
5. 2-hour on-site support, offered in some cities: mostly limited to major metropolitan areas.

Dell's Consumer division offers 24x7 phone based and online troubleshooting rather than only
during business hours. Gold Technical support is not offered for customers purchasing through
the consumer department, and neither is Same-Day Onsite response.

On 4 February 2008 Dell launched a revamped services-and-support scheme for businesses

named "ProSupport", offering customers more options to tailor services to fit their needs. Rather
than take a one-size-fits-all approach, Dell has put together packages of options for each
category of its customers: small and medium-sized businesses, large businesses, government,
education, and health-care- and life-sciences.

Dell now offers separate support options for IT staff and for non-IT professionals. For the latter,
the company offers "how-to" support for software applications, such as Microsoft Office. Dell
also offers collaborative support with many third-party software vendors. For IT departments,
Dell offers "fast-track dispatch" of parts and labor and access to a crisis-center to handle major
outages, virus-attacks, or problems caused by natural disasters.

Besides offering response-options for handling problems, Dell has launched "Proactive
Maintenance", which offers assessment and recommendations for updating drivers and firmware
and for the application of customer-approved patches and system-updates. Dell also offers
assessment-services for storage area networks, as well as for Dell's computing hardware.

The new offerings replace Dell's tiered services-structure in which customers could choose from
a variety of service levels, such as platinum, gold, or silver. The latest system takes a more
customizable approach to support.


Dell associates a Service Tag, a unique alpha-numeric identifier, with most of its products, which
resembles a serial number. The Service Tag number, represented in base 36, has a length of five
or seven characters. Software can read the Service Tag in a computer's DMI table. Monitors
bought as part of a computer system get support via the Service Tag of the computer. Monitors
bought separately get support via the Dell Order Number or via the monitor's serial number.

Dell links its Service Tags to Express Service Codes, usually found together with the service tag
on a sticker physically attached to a system. Computer-owners can usually find this tag on the
bottom of laptops; or on the side or on the back of the computer tower of desktops. The Express
Service Code, a purely numerical conversion of the service tag, serves for use in Dell's trunkline
for routing a customer to the appropriate phone-technician. Dell's technical support for
consumers requires the customer to enter in their Express Service Code into their touch-tone
phone and if they do not provide it when prompted customers will experience increased hold-
time before reaching a support-representative.


The DellConnect program, a remote-access tool, gives technicians within Dell Support the ability
to access customer computers from a remote location for troubleshooting purposes. By using this
tool, support technicians can analyze the configuration of a computer system, view and edit its
files and software environment, view and comment on the screen, or take control of the computer
system (with the customer's approval) to carry out troubleshooting.

As of 2007 Dell Inc replaced its proprietary remote-access tool with the newer DellConnect 2.0
manufactured by Citrix — a Dell-branded GoToAssist. After reaching the website, customers
simply run this software, which can permit a support technician to view and work on their
computer from a remote location; including the ability to reboot the computer remotely and
continuing the same session, to share clipboards, and to redirect customers to a specific website.

World-wide technical support

In the Americas, Dell has Customer Contact Centers in Central Texas; Salt Lake City, Utah;
Nashville, Tennessee; Chesapeake; Twin Falls, Idaho; Oklahoma City, Oklahoma; San Salvador,
El Salvador; Guadalajara, Mexico and Brazil[48], as well as in Glace Bay, Nova Scotia; Panama
City, Panama and Tampa, Florida.

In the Asia-Pacific region Dell provides customer support from Pasay City and Quezon City,
Philippines; Cyberjaya and Penang, Malaysia[49]; and Xiamen and Dalian, China.

In India, Dell has customer support centers in the northern cities of Gurgaon and Mohali; and in
the southern cities of Hyderabad and Bangalore.[50]

On January 31, 2008 Dell announced that it would close its call center in Edmonton, Alberta
effective May 2, 2008, laying off over 900 workers and abandoning the sweetheart-deal it had
agreed to with the city of Edmonton. The Ottawa center will close in July 2008, leaving no
support centers in Canada.

Criticism of support
Some criticism targets the Dell technical-support system. In 2006 The New York Times published
a humorous review of the company's situation in an article by David Pogue. Pogue lamented the
difficulties customers face when attempting to reach tech-support by phone. "When you are
ready to MAKE THE CALL", he wrote, "go to the bathroom, take an aspirin, get a book or
crossword, stock up on water and nibbles (preferably ones with high sugar content and no
nutritional value; Twinkies are good)".[51]

Commercial aspects
Traditional business model

Traditionally, Dell has sold all its products — whether to end-use consumers or to corporate
customers — using a direct-sales model via the Internet and the telephone-network. Dell
maintains a negative cash conversion cycle (CCC) through use of this model: in other words,
Dell Inc. receives payment for the products before it has to pay for the materials. Dell also
practises just-in-time (JIT) inventory-management, profiting from its attendant benefits. Dell's
JIT approach utilizes the "pull" system by building computers only after customers place orders
and by requesting materials from suppliers as needed. In this way Dell mirrors Toyota by
following Toyota Way Principle #3 ("Use 'pull' systems to avoid overproduction"). Since the
days of the original dominance of telephone-ordering, the Internet has significantly enhanced
Dell’s business model, making it easier for customers and potential customers to contact Dell
directly. This model also has enabled Dell to provide very customizable systems at an affordable
rate, since Dell's manufacturing arm builds specifically for each customer. Other computer-
manufacturers, including Gateway and Hewlett-Packard, have attempted to adapt[citation needed]
similar business-models, but due to timing and/or retail-channel pressures[citation needed] they have
not achieved the same results as Dell.

A Dell executive writes[52]:

Analysts say : They (Dell) have a negative 45 days CCC, which means that their sales are
converted in hard cash 45 days BEFORE the sale.

I say : They have a negative 45 days CCC, which means that their sales are converted in hard
cash 45 days BEFORE Dell needs to pay for purchase invoices to vendors.

Dell has also sold at retail, as explained in the "Marketing" section of this article.


A board of directors of nine people runs the company. Michael Dell, the founder of the company,
serves on the board. Other board members include Don Carty, William Gray, Judy Lewent,
Klaus Luft, Alex Mandl, Michael A. Miles, and Sam Nunn. Shareholders elect the nine board
members at meetings, and those board members who do not get a majority of votes must submit
a resignation to the board, which will subsequently choose whether or not to accept the
resignation. The board of directors usually sets up five committees which have oversight over
specific matters. These committees include the Audit Committee, which handles accounting
issues, including auditing and reporting; the Compensation Committee, which approves
compensation for the CEO and other employees of the company; the Finance Committee, which
handles financial matters such as proposed mergers and acquisitions; the Governance and
Nominating Committee, which handles various corporate matters (including nomination of the
board); and the Antitrust Compliance Committee, which attempts to prevent company practices
from violating antitrust laws.

The corporate structure and management of Dell extends beyond the board of directors. The Dell
Global Executive Management Committee sets the strategic direction for how the corporation
keeps customers at the forefront, from designing and manufacturing computer systems to
offering products that meet customers' requirements to providing sufficient service and support.
Dell has regional senior vice presidents for countries other than the United States, including
David Marmonti for EMEA and Stephen J. Felice for Asia/Japan. As of 2007, other officers
included Martin Garvin (senior vice president for worldwide procurement) and Susan E. Sheskey
(vice president and chief information officer).


Dell advertisements have appeared in several types of media including television, the Internet,
magazines, catalogs and newspapers. Some of Dell Inc's marketing strategies include lowering
prices at all times of the year, offering free bonus products (such as Dell printers), and offering
free shipping in order to encourage more sales and to stave off competitors. In 2006, Dell cut its
prices in an effort to maintain its 19.2% market share. However, this also cut profit-margins by
more than half, from 8.7 to 4.3 percent. To maintain its low prices, Dell continues to accept most
purchases of its products via the Internet and through the telephone network, and to move its
customer-care division to India and El Salvador.[53]

A popular United States television and print ad campaign in the early 2000s featured the actor
Ben Curtis playing the part of "Steven", a lightly mischievous blond-haired kid who came to the
assistance of bereft computer purchasers. Each television advertisement usually ended with
Steven's catch-phrase: "Dude, you're gettin' a Dell!"

A subsequent advertising campaign featured interns at Dell headquarters (with Curtis' character
appearing in a small cameo at the end of one of the first commercials in this particular

A Dell advertising campaign for the XPS line of gaming computers featured in print in the
September 2006 issue of Wired Magazine. It used as a tagline the common term in Internet and
gamer slang: "FTW", meaning "For The Win". However, Dell Inc. soon dropped the campaign.

In the first-person shooter game F.E.A.R. Extraction Point, several computers visible on desks
within the game have recognizable Dell XPS model characteristics, sometimes even including
the Dell logo on the monitors.

In 2007 Dell switched advertising agencies in the US from BBDO to Mother.[citation needed] In July
2007, Dell released new advertising created by Mother to support the Inspiron and XPS lines.
The ads featured music from the Flaming Lips and Devo who re-formed especially to record the
song in the ad "Work it Out".
Criticisms of Dell's Laptop Security Marketing

Recently Dell has received a lot of press coverage over its claim of having the world's most
secure notebooks, specifically, its Latitude D630 and Latitude D830. [54] [55] [56]

According to a National Advertising Division (NAD) report released in late June 2008, Dell did
not have enough evidence to support its claim as maker of the "world's most secure laptops" [57]
within its marketing campaign. Lenovo filed the complaint to NAD accusing Dell of making
unverified claims. [58]

Most of the criticism made by NAD relates to data encryption, both disk-encryption software and
disk-encryption hardware, used in Dell's commercial notebooks. Dell uses hardware-based full
disk encryption and software-based full disk encryption from third-party vendors such as Seagate

"Although NAD determined that the advertiser could truthfully advertise its position as the first
in the industry to combine these particular third-party components in creating secure systems for
large businesses, NAD observed the distinction between the security provided to the individual
computers and the security provided to a large network of computers." "Since not all of the
components of the FDE Encryption Solution are equally relevant for all sizes of business, NAD
recommended the advertiser make this distinction to the extent it intends to make broad security
claims." "On the basis of the evidence in the record, NAD determined that advertiser
demonstrated that it offered features of computer security that were both unique and meaningful
to consumers."

The market expects laptops with full disk encryption to have data-at-rest (DAR) protection, but
they remain vulnerable to cold boot attack, a type of side channel attack, which takes advantage
of data remanence[60] [61] "However, it also determined that the broad claim "World's Most
Secure" was not adequately supported and was appropriately discontinued."[62]

Dell voluntarily discontinued the "world's most secured laptops" advertisement after the
announcement of the NAD investigation.

Dell's original claim[63] included:

"The industry-first solution delivers improved performance versus software-based encryption

and automated compliance reports so customers are confident that encryption is enabled." "'Dell
is at the forefront of laptop security because it ranks as a top concern for customers in an
environment where more data is produced by an increasingly mobile work force,' said Margaret
Franco, director, Dell Product Group. 'The industry-first solution we’re announcing today adds to
our multi-pronged approach to security that delivers an ironclad assurance of protection.'”

Dell kiosks
Dell Direct Store, Brisbane, Queensland

Starting in 2002, Dell opened kiosk locations in shopping malls across the United States in order
to give personal service to customers who preferred this method of shopping to using the Internet
or the telephone-system. Despite the added expense, prices at the kiosks match or beat prices
available through other retail channels. Starting in 2005, Dell expanded kiosk locations to
include shopping malls across Australia, Canada, Singapore and Hong Kong.

On January 30, 2008 Dell shut down all 140 kiosks in the US due to expansion into retail stores
such as Wal-Mart, Best Buy, and Staples.

Dell stores in the U.S.

In 2006 Dell Inc. opened one full store, 3,000-square-foot (280 m2) in area, at NorthPark Center
in Dallas, Texas. It operates the 3,000-square-foot (280 m2) retail outlet seven days a week to
display about 36 models, including PCs and televisions. As at the kiosks, customers can only see
demonstration-computers and place orders through agents. Dell then delivers purchased items
just as if the customer had placed the order by phone or over the Internet.

Dell Inc planned to use the Dallas store to house about three times as many products as it
displayed in more than 160 kiosks in malls and airports.[citation needed] In addition to showcasing
products, the stores also support on-site warranties and non-warranty service ("Dell on Call").
Services offered include repairing computer video-cards and removing spyware from hard

On Valentine's Day, February 14, 2008, Dell closed the Service Center in its Dallas NorthPark
store and laid off all the technical staff there.

Dell Partner Program

In late 2007 Dell Inc announced[citation needed] that it planned to expand its program to value-added
resellers (VARs), giving it the official name of "Dell Partner Direct" and a new website [2]. Dell
Inc realized[citation needed] that this program, once a small factor in Dell Inc sales, had become a
growing sector of its business and it desired[citation needed] to leverage this growing outlet for its
products. It promised VARs who joined this program increased discounts on product and the
ability to use the Dell name and logo in their marketing efforts. ConnectU became an early
member[citation needed] of the program.

The overall success of this program — as a new development for Dell Inc — remains
unclear[citation needed].
[edit] Retail in the U.S.

In the early 1990s, Dell also sold its products through Best Buy, Costco and Sam's Club stores in
the United States. Dell stopped this practice in 1994, citing low profit-margins on the business.
In 2003, Dell briefly sold products in Sears stores in the U.S. In 2007, Dell started shipping its
products to major retailers in the U.S. once again, starting with Sam's Club and Wal-Mart.
Staples, the largest office-supply retailer in the U.S., and Best Buy, the largest electronics retailer
in the U.S., became Dell retail partners later that same year.

[edit] Retail in Canada

As of the end of February 2008, Dell products shipped to one of the largest office-supply
retailers in Canada, Staples Business Depot. In April 2008, Future Shop and Best Buy began
carrying a sub-set of Dell products, such as certain desktops, laptops and monitors.

[edit] Direct retail in Eastern Europe

Since some shoppers in certain markets show reluctance to purchase technological products
through the phone or the Internet, Dell has looked into opening retail operations in some
countries. In April 2007, Dell opened a retail store in Budapest. In October of the same year,
Dell opened a retail store in Moscow.

[edit] Retail in the UK

Since December 2007 HMV's flagship Trocadero store has sold Dell XPS PCs. From January
2008 the UK stores of DSGi have sold Dell products (in particular, through Currys and PC
World stores). As of 2008, the large supermarket-chain Tesco has sold Dell laptops and desktops
in stores throughout the UK.

[edit] Retail in Australia

In May 2008, Dell reached an agreement with office supply chain, Officeworks, to stock a few
modified models in the Inspiron desktop and notebook range. These models have slightly
different model numbers, but almost replicate the ones available from the Dell Store.

[edit] Competition

Dell's major competitors include Apple, Hewlett-Packard (HP), Sun Microsystems, Gateway,
Lenovo, Sony, Acer, Toshiba and Asus. Dell and its subsidiary, Alienware, compete in the
enthusiast market against Falcon Northwest, Voodoo PC (a subsidiary of HP), and other
manufacturers. In the second quarter of 2006 Dell had between 18% and 19% share of the
worldwide personal computer market, compared to HP with roughly 15%. By leveraging its
business-model, Dell attempts to undercut competitors and offer customers a more attractive
choice of personal computers and other equipment.

Dell in late 2006 lost its lead in the PC-business to Hewlett-Packard. Both Gartner and IDC
estimated that in the third quarter of 2006, HP shipped more units worldwide than did Dell.
Dell's 3.6% growth paled in comparison to HP's 15% growth during the same period. The
problem got worse in the fourth quarter, when Gartner estimated that Dell PC shipments declined
8.9% (versus HP's 23.9% growth). As a result, at the end of 2006 Dell's overall PC market-share
stood at 13.9% (versus HP's 17.4%).

IDC reported that Dell lost more server market share than any of the top four competitors in that
arena. IDC's Q4 2006 estimates show Dell's share of the server market at 8.1%, down from 9.5%
in the previous year. This represents a 8.8% loss year-over-year, primarily to competitors EMC
and IBM.[64]

[edit] Environmental record

Dell became the first company in the information technology industry to establish a product-
recycling goal (in 2004) and completed the implementation of its global consumer recycling-
program in 2006.[65] On February 6, 2007, the National Recycling Coalition awarded Dell its
"Recycling Works" award for efforts to promote producer responsibility.[66] On July 19, 2007,
Dell announced that it had exceeded targets in working to achieve a multi-year goal of
recovering 275 million pounds of computer equipment by 2009.[67] The company reported the
recovery of 78 million pounds (nearly 40,000 tons) of IT equipment from customers in 2006, a
93-percent increase over 2005; and 12.4% of the equipment Dell sold seven years earlier.[68]

On June 5, 2007, Dell set a goal of becoming the greenest technology company on Earth for the
long term. The company launched a zero-carbon initiative that includes:

1. reducing Dell's carbon intensity by 15 percent by 2012

2. requiring primary suppliers to report carbon emissions data during quarterly business
3. partnering with customers to build the "greenest PC on the planet"
4. expanding the company's carbon-offsetting program, "Plant a Tree for Me".

The company introduced the term "The Re-Generation" during a round table in London
commemorating 2007 World Environment Day. "The Re-Generation" refers to people of all ages
throughout the world who want to make a difference in improving the world's environment. Dell
also talked about plans to take the lead in setting an environmental standard for the "technology
industry" and maintaining that leadership in the future.

[edit] Lawsuits and other legal action

• In 2005, Dell began the construction of a facility in Winston-Salem, North Carolina.[69]
Many claims emerged that Dell had used unfair practices to obtain huge incentives.[70]
Dell Inc. fought a lawsuit which the court system later dismissed.[71]

• In October 2005, Dell filed a lawsuit in a Paris court to sue Minorca-based independent
website-designer Paul Dell of "Dellimages" for engaging in “parasitism and unfair
competition”. This related to his company website "DellWebsites".[citation needed]
• On January 31, 2007, some shareholders filed a lawsuit accusing Dell and Intel of
conspiring, and accusing Dell executives (including Michael Dell) of options-backdating
and of propped financial reports.[72] Specific allegations claimed that:
o Dell had received kickbacks from Intel to maintain Intel exclusivity
o Dell had used the funds to prop up its sales-figures
o Dell reduced the period and scope of its warranties and cut corners on
manufacturing and testing in order to funnel additional funds to sales; causing the
stock-price to inflate to around $40 per share
o once stock-prices had peaked, several Dell executives, including Michael Dell,
sold massive amounts of their personal stock-holdings to benefit from the
artificially inflated stock-price

• On February 8, 2007, seven current and former workers at a call-center in Roseburg,

Oregon sued the computer-maker, saying the company worked its sales reps "off the
clock", failed to provide proper rest-breaks and improperly recorded their lunch-periods.
Moves have begun to turn the case into a class action. Dell suddenly closed down the
facility at Roseburg, Oregon on August 2, 2007.[74] The facility had consisted of computer
and electronics sales-agents and of customer-service representatives.

• In March 2007 an article titled "Computer Giant Faces Consumer Lawsuit Consumers
Allege They Didn't Get the Tech Support They Paid For" appeared on an ABC News
website.[75] "Part of the suit claims that though Dell gave the impression of an "award-
winning service" available to consumers "24 hours a day, seven days a week", consumers
faced "nightmarish obstacles" to get help and technical service for their computers. New
York Attorney General Andrew Cuomo said that New York had received 700 complaints
about Dell — more than the number of complaints for any other related subject.

• In May 2007, Andrew Cuomo filed a lawsuit against Dell for "false advertising and
deceptive business practices, including offering misleading financing, and failing to
honor rebates, warranties and service contracts." [3] Dell spokesman Bob Pearson
portrayed the lawsuit as based on only a small portion of Dell's customers and as in no
way reflecting the way the company treats its customers. Dell's hardware-warranty
contract says that customers must troubleshoot over the phone — including possibly
opening the computer — before Dell will send a technical service provider to replace a
part. On May 27, 2008, State Supreme Court Justice Joseph Teresi required that Dell
clarify its financing and warranty criteria, saying the computer maker engaged in fraud,
false advertising, deceptive business and abusive debt-collection practices.[76] Parties have
filed more than 1,000 additional complaints with the attorney general's office since the
initial filing of the lawsuit in May 2007.[77]

• On December 5, 2007, Typhoon Touch Technologies filed a lawsuit naming Dell inc.
along with other defendants, and alleging patent-violations over Dell's use of touch-
screen technology.[78]

[edit] SEC investigation

On August 17, 2007, the Dell Inc announced that after an internal investigation into its
accounting practices it would restate and reduce earnings from 2003 through to the first quarter
of 2007 by a total amount of between $50 million and $150 million, or 2 cents to 7 cents per
share.[79] The investigation, begun in November 2006, resulted from concerns raised by the U.S.
Securities and Exchange Commission over some documents and information that Dell Inc. had

[edit] Criticism
In the 1990s Dell switched from using primarily ATX motherboards and PSU to using boards
and power-supplies with mechanically identical but differently wired connectors. This meant
customers wishing to upgrade their hardware could encounter unforeseen problems. However,
company practice in this respect changed in 2003.[81][82]

In 2005, according to the Better Business Bureau, complaints about Dell more than doubled, to
1,533 after earnings grew 52% that year.

Consumer complaints about the quality of customer-service mounted, and in 2006, Dell
acknowledged that it had problems with customer-service. Issues included call-transfers[83] of
more than 45% of calls and long wait-times. Dell's blog detailed the response:[84] "We’re
spending more than a $100 million — and a lot of blood, sweat and tears of talented people — to
fix this." Later in the year, the company increased its spending on customer-service to $150

In May, 2008 the New York Supreme Court ruled that Dell and Dell Financial Services "engaged
in fraud, false advertising, deceptive business practices, and abusive debt collection practices."
The relevant lawsuit aimed primarily[citation needed] to highlight and seek restitution for a lack of
technical support given to customers by Dell. The court plans to hold further proceedings to
determine how much money Dell has to pay out to customers and how much profit Dell made
unlawfully in New York.[86]
The Hongkong and Shanghai Banking Corporation Limited (traditional Chinese: 香港上海
滙豐銀行有限公司; pinyin: xiānggǎng shànghǎi huì fēng yínháng yǒuxiàn gōngsī), based in
Hong Kong, is a wholly owned subsidiary and the founding member of the HSBC Group, which
is traded on several stock exchanges as HSBC Holdings plc. The business ranges from the
traditional High Street roles of personal finance and commercial banking, to corporate and
investment banking, and private banking.

Known locally by the affectionate term Honkers and Shankers or equally its old trademark
HongkongBank, the bank was founded by the Scot Thomas Sutherland to finance trade in the
Far East in 1865. It is the largest bank in Hong Kong and has offices in Asia Pacific region.

• 1 History
o 1.1 Foundation
o 1.2 Business development
o 1.3 Second World War
o 1.4 International expansion
o 1.5 The creation of the HSBC Group
• 2 Hong Kong banking
o 2.1 Hong Kong dollar bank notes
o 2.2 Headquarters
• 3 Other Hong Kong operations
o 3.1 Hang Seng Bank
• 4 Asia Pacific operations
o 4.1 China
o 4.2 Indonesia
o 4.3 Japan
o 4.4 New Zealand
o 4.5 Philippines
o 4.6 Singapore
o 4.7 South Korea
o 4.8 Taiwan
o 4.9 Thailand
• 5 Cultural References
[edit] History
[edit] Foundation

The bank first leased Wardley House in Hong Kong at HKD $500 a month in 1864. After raising
a capital of HKD $5 million, the bank opened its doors in 1865. The original location of the bank
was considered crucial since the construction was based on some of the best fung shui in
Colonial Hong Kong[1]. In March 1865, the "Hongkong and Shanghai Banking Company
Limited" was established to finance the growing trade between China and Europe (with traded
products including opium)[2][3], with an office opened in Shanghai during April of that year. The
bank was incorporated in Hong Kong by special dispensation from the British Treasury in 1866,
and under the Hongkong and Shanghai Bank Ordinance 1866[4], a new branch in Japan was also
established. The bank handled the first public loan in China in 1874, thereafter issuing most
public loans.

[edit] Business development

Sir Thomas Jackson Bart became chief manager in 1876. During his twenty-six year tenure, the
Bank became a leader in Asia. Notable events included being the first bank established in
Thailand, in 1888, where it printed the country's first banknotes; acting as banker for the Hong
Kong government from the 1880s; and participating in the management of British colonial
government accounts in China, Japan, Penang and Singapore. A period of expansion followed,
with new branch offices opening in Bangkok (1921), Manila (1922) and Shanghai (1923), and a
new head office building in Hong Kong in 1935. Jackson is also credited with a statue in Statue

[edit] Second World War

In anticipation of the Japanese invasion of Hong Kong in 1941, the Bank's head office moved to
London. During the period 1941-1943 the chief manager Vandeleur Grayburn, and his successor
David C Edmondston, both died while interned by the Japanese. Arthur Morse was appointed
Chief Manager in 1943 and led the bank after the war. The head office moved back to Hong
Kong in 1946. During the Japanese occupation the Bank's head office building was occupied as
the headquarters of the Hong Kong Japanese military government.

[edit] International expansion

Michael Turner became Chief Manager in 1953 and set about diversifying the business. His
tenure came to an end in 1962 having established The Hong Kong and Shanghai Banking
Corporation of California 1955 and having acquired The British Bank of the Middle East and the
Mercantile Bank (based in India) in 1959. In 1962, H.J. Shen., the managing director of Maysun
Trading Co. and the former head of the Central Trust of China, became the first ethnic Chinese
official appointed to the position of Chief Manager of the bank. Under the tenure of both H.J.
Shen and Jake Saunders the bank continued to expand. 1965 saw the bank purchase a controlling
interest in Hang Seng Bank of Hong Kong, and 1972 the formation of a merchant banking arm,
Wardley Limited.
In 1964 the Chief Managership was superseded as the top executive role in the bank by an
Executive Chairmanship (Saunders taking this role until retirement in 1972).

In 1980, the Bank launched a hostile takeover bid for the Royal Bank of Scotland, although the
bid was blocked by the British government.

[edit] The creation of the HSBC Group

In 1980, the Bank, now under the chairmanship of Michael Sandberg acquired a 51% stake in
Marine Midland Bank, of the United States of America, and continued its expansion with the
establishment of Hongkong Bank of Canada in 1981 and HongkongBank of Australia Limited in
1986. 1987, under the Chairmanship of William Purves, saw the bank's ownership of Marine
Midland Bank increased to 100% and the acquisition of a 14.9% share in Midland Bank in the
United Kingdom.

The present building in Hong Kong was designed by Sir Norman Foster and was held as one of
the most expensive and technologically advanced building in the world in 1986 costing HKD
$5.3 billion[5].

In 1991 HSBC Holdings plc was established to act as a parent company to the group; shares are
currently traded on the London, Hong Kong, Paris, New York and Bermuda stock exchanges.

[edit] Hong Kong banking

HSBC's Hong Kong head office

Under the HSBC brand, the bank maintains a network of around 220 branches throughout the
Hong Kong SAR, from which it offers a wide range of financial products and services. For some
time in the late 1980s and early 1990s, the bank was known by the name HongkongBank in its
native city, although it now trades as HSBC. During that period, it also adopted the idiosyncratic
practice of calling its ATMs Electronic Teller Card (ETC) machines.

[edit] Hong Kong dollar bank notes

HSBC is one of the three commercial banks which issue banknotes for Hong Kong (see Hong
Kong dollar) - the other two being the Bank of China (Hong Kong) and Standard Chartered Bank
(Hong Kong). Of the total notes in circulation measured by value, HSBC is the most prolific
issuer, its notes representing 62.9% of those in issue.

[edit] Headquarters

HSBC's Hong Kong headquarters are at 1 Queen's Road Central in the Central area on Hong
Kong Island. The HSBC Hong Kong headquarters building was also home to HSBC Holdings
plc's headquarters until the latter firm's move to 8 Canada Square, London to meet the
requirements of the UK regulatory authorities after the acquisition of the Midland Bank in 1992.
It was designed by British architect Lord Norman Foster, and was the most expensive building in
the world based on usable floor area at the time it was built.

[edit] Other Hong Kong operations

[edit] Hang Seng Bank

Main article: Hang Seng Bank

HSBC acquired a 62.14%, controlling interest in the local Hang Seng Bank in 1965 during a
crisis of the latter. The Hang Seng Index for stock prices in Hong Kong is named after the Hang
Seng Bank.

[edit] Asia Pacific operations

The Hongkong and Shanghai Banking Corporation maintains a network of around 600 offices in
20 countries in Asia Pacific, as well as owning of a number of HSBC banks operating in various
countries and holding the group's stakes in further lenders, particularly in mainland China.

Operations of the group in the Asia Pacific are under this subsidiary, and it forms the regional
headquarters for Asia Pacific. This means that it is responsible for entities such as HSBC Bank
Australia Limited, Hang Seng Bank Limited, HSBC Bank (China) Company Limited and HSBC
Insurance (Asia-Pacific) Holdings Limited, and the management of stakes in Bank of
Communications (19.9%), Barrowgate Limited (24.64%) and Industrial Bank. But excluding
HSBC Bank Malaysia Berhad and the majority of the HSBC’s Private Banking business in Asia

[edit] China
HSBC logo
Main article: HSBC Bank (China)

HSBC established its Shanghai branch office on 3 March 1865 and has had a continuous
presence in the city since then, except during the Japanese Occupation. Until the economic
reforms of the late 1970s, its activities were mainly in inward remittances and export bills,
however its activities now span a wider range.

On 6 August 2004, HSBC announced that it would pay USD 1.75 billion for a 19.9% stake in
Shanghai-based Bank of Communications. At the time of the announcement, Bank of
Communications was China's fifth-largest bank and the investment by HSBC was eight times
bigger than any previous foreign investment in a Chinese bank. The industry considered this
move, giving HSBC a lead in the race to grab pieces of mainland China's banking market. A year
earlier, HSBC had joined with Hong Kong's Shanghai Commercial Bank to purchase an 11%
stake in Bank of Shanghai (HSBC paid USD 62.6 million for an 8% stake) and USD 733 million
for a 10% stake in Ping An Insurance.

In 1 April 2007, the mainland China offices of The Hongkong and Shanghai Banking
Corporation transferred to its subsidiary HSBC Bank (China), and it started operations in 2 April.

[edit] Indonesia

The Hongkong and Shanghai Banking Corporation opened its first Indonesian office in Jakarta in
1884. Having been able to restart its operations after the Second World War, it was again forced
to close in mid-1960s, however the Bank was granted a new banking licence in 1968 its
operations have grown to make it one of the largest foreign banks operating in Indonesia.

[edit] Japan

HSBC opened its first Japan operations in Yokohama in 1866, followed by branches in other
trading ports such as Osaka, Kobe and Nagasaki. It was heavily involved in the early
development of Japan's current monetary system, and consulted with the government regarding
fiscal policy, currency printing and related matters.

HSBC does not currently conduct ordinary retail banking in Japan, but conducts investment
banking in Tokyo and Osaka. Since 2007 it has expanded its HSBC Premier private banking
services for high net worth individual clients, opening new banking centers in the Hiroo and
Akasaka areas of Tokyo.

[edit] New Zealand

HSBC's operations in New Zealand are as a branch of The Hongkong and Shanghai Banking
Corporation, which first gained a licence from the Reserve Bank of New Zealand on 22 July
1987.[6] Today HSBC offers a range of financial products from a network of 9 offices. [7]

[edit] Philippines

HSBC's history in the Philippines dates back more than 130 years with the establishment of their
first branch in Binondo, Manila in 1876. In its early years of operation, HSBC serviced the
booming Philippine sugar industry. At the turn of the century, it financed railways that connected
provincial towns across Luzon to Manila. During the American regime, HSBC was called to
advise on Philippine currency reform. Its current headquarters are in Makati, and a new building
is being constructed in the Bonifacio Global City in Taguig. Today, HSBC Philippines operates
in key Philippine cities such as Cebu and Davao. It has ended Citibank and Standard Chartered's
monopoly on international banking in the Philippines.

[edit] Singapore

In Singapore, The Hongkong and Shanghai Banking Corporation Limited operates as a full
service bank with its headquarters in Collyer Quay. It opened its doors in December 1877.
Today, HSBC's flagship office remains at the original Collyer Quay site where its first branch
was opened.

HSBC Singapore is a Qualifying Full Bank with 11 branches incorporating 5 HSBC Premier
Centres and 33 Automated Teller Machines in Singapore and offers a comprehensive range of
financial services including commercial banking, investment and private banking, insurance,
forfaiting and trustee services, and securities and capital markets services.

[edit] South Korea

HSBC is expanding in competitive South Korean market, currently operating from a network of
11 branches, the first having been opened in Jemulpo in 1897 .

[edit] Taiwan

HSBC’s presence in Taiwan dates back to 1885 when The Hongkong and Shanghai Banking
Corporation appointed an agent in Danshui. A full service branch was established in Taipei in
1984. The bank now has a network of 8 branches (Hyperlink to service channel) island-wide,
including Taipei, Chien Kuo, Panchiao, Tien Mu, Taoyuan, Taichung, Tainan City, and
Kaohsiung. In 2007, The Hongkong and Shanghai Banking Corporation acquired The Chinese
Bank in Taiwan. The acquisition made HSBC's island-wide branch network increase to 47.

[edit] Thailand
Operations extend to a significant (greater than US$50m) business in Thailand, including
personal financial services as well as a corporate and commercial banking operation.

[edit] Cultural References

In Hong Kong, the local population sometimes refers to the bank as 獅子銀行, "the Lion Bank",
because of the pair of lion statues outside the HSBC headquarters, which also appear in some
banknotes. Local films and television series set in Hong Kong, especially comedies, uses this
nickname when referring to the bank.

Although the name of Hongkong was changed to Hong Kong by Hong Kong Government on
September 3, 1926, HSBC uses the older Hongkong, as the bank's name was conceived before
the official declaration of the modern two-word name, and it was decided to retain the single
word spelling in the Bank's name: Hongkong.

• 1991 - shares are listed on the London and Hong Kong stock exchanges.
• 1992 - acquisition of Midland Bank in the United Kingdom.
• 1993 - the headquarters of HSBC Holdings moves from 1 Queens Road Central, Hong
Kong to 10 Lower Thames Street, London.
• 1997 - acquisition of Roberts SA de Inversiones of Argentina and Banco Bamerindus of
• 1999 - acquisition of Republic New York; shares are traded on a third stock exchange,
the New York Stock Exchange, as American Depositary Receipts (ADRs).
• 2000 - acquisition of Crédit Commercial de France; shares are traded on a fourth stock
exchange, Euronext in Paris.
• 2001 - acquisition of Demirbank of Turkey.
• 2002 - acquisition of Grupo Financiero Bital, SA de CV of Mexico.
• 2003 - the headquarters of HSBC Holdings moves from 10 Lower Thames Street,
London to 8 Canada Square, London.
• 2003 - acquisition of Household International.
• 2003 - acquisition of Polski Kredyt Bank SA of Poland.
• 2003 - November 20, terrorist attack: a bomb blast in Istanbul damaged the bank’s head
office in Turkey, causing several deaths and hundreds of injuries.
• 2004 - acquisition of The Bank of Bermuda of Bermuda; shares are traded on a fifth stock
exchange, the Bermuda Stock Exchange.
• 2004 - acquisition of Marks & Spencer Retail Financial Services Holdings Ltd.
• 2004 - acquisition of 19.9% of the Bank of Communications of Shanghai.
• 2005 - acquisition of Metris Companies, Inc.
• 2005 - acquired 70.1% of Dar Es Salaam Investment Bank, having begun negotiations
earlier in the year. The Coalition Provisional Authority originally granted HSBC along
with Standard Chartered and National Bank of Kuwait licences to operate in Iraq.
• 2006 - announcement of pre-tax profits of £11.91 billion
• 2006 - acquisition of Banca Nazionale del Lavoro of Argentina adds 90 branches to the
South American business.
• 2006 - acquisition of Grupo Banistmo, the largest financial services company in Central
America, based in Panama.
• 2007 - acquisition of Banex in Costa Rica.
• 2007 - acquisition of The Chinese Bank in Taiwan.

[edit] Local operations

The HSBC Group has a significant presence in each of the world's major financial markets, with
the Americas, Asia Pacific and Europe each representing around one third of the business. With
10,000 offices in 83 countries, 210,000 shareholders, 330,000 staff and 128 million customers
worldwide, HSBC arguably has the most international presence among the world's multinational
banking giants.

The HSBC Group operates as a number of local banks around the world. Outlined below are
countries which, in 2007, generated the top 20 profit before tax figures, with the addition of the
United States as specific issues exclude that country from the top 20 for 2007.[11] For details of
other group companies see Category:HSBC.

[edit] Americas

• HSBC Bank Argentina SA has around 150 branches throughout Argentina providing
a full range of banking and financial products and services to over 1.2 million customers.
Midland Bank purchased a stake in Banco Roberts SA in 1987; in 1997 HSBC took full
control of the bank and rebranded it HSBC. Also, after the crisis of 2001, they bought the
Argentine operations of the Italian Banca Nazionale del Lavoro (BNL) initially referred
to as "BNL en argentina es HSBC" (BNL in Argentina is HSBC) but after two years the
BNL network was rebranded as HSBC.

• The Bank of Bermuda Limited was acquired by HSBC in February 2004. Founded
in 1889, it is a leading provider of fund administration, trust, custody, asset management
and banking services, since the acquisition the group has focused its global efforts in
some areas of these services on the island.

• HSBC Bank Brasil SA is HSBC’s largest presence in South America.

Palacio Avenida: The headquarters of HSBC Bank Brasil, located in Curitiba.

It was established in March 1997 with the acquisition of the assets, liabilities and
subsidiaries of Banco Bamerindus do Brasil SA, which was established in 1952. HSBC is
now among the ten largest banks in Brazil, with more than 1,700 branches and sub-
branches in 550 Brazilian cities.

• HSBC Bank Canada is the seventh largest bank in Canada, with offices in every
province except for Prince Edward Island, and is the largest foreign-owned bank in the
country. HSBC has a strong presence in overseas Chinese communities especially in
Vancouver and Toronto, and is the only Canadian bank with headquarters in Vancouver,
British Columbia.

• Corporacion HSBC S.A. is the third largest bank in Costa Rica.

• HSBC Mexico, SA is one of Mexico’s four largest banking and financial service
companies, with 1,400 branches, 4,800 ATMs and 6 million customers. HSBC purchased
Banco Internacional, SA known as Bital, in November 2002, rebranding it overnight in
January 2004.

• HSBC El Salvador, SA is the third largest banking and financial service in the

• HSBC Honduras is one of the largest banks in the country.

• HSBC Bank USA NA and HSBC Finance Corporation represent the group’s
business in the US, which has been built up via the acquisition of Marine Midland
(1980), Republic National Bank (1999), Household International (2003) and Metris
Companies (2005) Solstice Capital Group (2006), among others. HSBC Bank USA,
headquartered in Wilmington, Delaware (as of 2008), is a full service bank, with a strong
branch network in New York State but also operating nationwide. HSBC Finance
Corporation focuses on selected lines of consumer lending with a branch network across
the US.

HSBC American headquarters in Buffalo, New York

HSBC in Gurgaon

Due to the boom many modern building have been built

[edit] Asia Pacific

• HSBC Bank Australia Limited gained its banking licence in 1986. Today, a full
range of Personal and Commercial services are offered from a network of branches as
well as via direct channels.

• The Hongkong and Shanghai Banking Corporation Limited The bank's first
branch in Bangladesh was opened in 1997.

• HSBC Bank (China) Company Limited and HSBC Rural Bank Company
Limited HSBC established its Shanghai branch office on 3 April 1865 and has had a
continuous presence in the city since then, except during the Japanese Occupation. Until
the economic reforms of the late 1970s, its activities were mainly in inward remittances
and export bills, however its activities now span a wider range. HSBC has purchased
stakes in various local firms, including 19% of Bank of Communications, 8% of Bank of
Shanghai, 16.8% of Ping An Insurance and via its subsidiary Hang Seng Bank 12.8% of
Industrial Bank.

• The Hongkong and Shanghai Banking Corporation Limited and Hang Seng
Bank Limited HSBC first opened for business in Hong Kong on 3 March 1865. Hong
Kong dollar banknotes are issued by three commercial banks in the Hong Kong SAR, of
which HSBC is the most prolific by value. The Hang Seng Index for stock prices in Hong
Kong is named after the Hang Seng Bank. The two banks are today first and second by
market share in Hong Kong.

• The Hongkong and Shanghai Banking Corporation Limited The Mercantile Bank
of India, London and China was established in October 1853 in Bombay (now Mumbai).
The Mercantile Bank was acquired in 1959 by HSBC. HSBC is now one of the fastest
growing foreign banks in India, both in domestic banking and support operations for
worldwide operations (see Group Service Centres).

• HSBC Bank Middle East Limited The bank's first branch in Pakistan was opened in
early 2008.
• HSBC Bank Malaysia Berhad traces its history back to the opening of the first
HSBC office in Penang in 1884. The bank later became an issuer of currency notes for
the Malaysian government. A gradual expansion programme resulted in the bank’s
incorporation, the first foreign institution to do so in Malaysia in 1994. The bank today
provides a full range of personal and commercial financial services. HSBC Holdings plc
in London UK is set to shift a significant number of jobs from Britain to its new
operational headquarters in Cyberjaya, Malaysia.HSBC operates a call center in
Cyberjaya,Malaysia, a cybercity in Malaysia.

• The Hongkong and Shanghai Banking Corporation Limited operates as a full

service bank with its headquarters in Collyer Quay, it is an approved Primary Dealer in
the Singapore Government Securities Market and an Approved Bond Intermediary, with
over a hundred staff operating one of the largest integrated dealing rooms in Singapore.

• The Hongkong and Shanghai Banking Corporation Limited HSBC Thailand

initially opened for business in Thailand in 1888 and has been serving Thai people for 12
decades. It was the first commercial bank in Thailand. HSBC has made significant
contributions to the establishment of solid foundations for Thailand’s financial and
banking sectors. For example, in 1889 HSBC issued the first banknotes in Thailand.
HSBC also issued the first foreign loan to the Thai government for its railroad
construction project. HSBC has always been a major driving force behind Thailand’s
commerce and economy.

[edit] Europe

• HSBC Bank Armenia cjsc was the first international bank to open in Armenia in
1996. The bank is a joint venture between the HSBC Group, which has a 70% ownership,
and members of overseas Armenian businesses. It is one of the leading banks in the
foreign exchange market.

• HSBC SA operates around 800 branches in France since the takeover of Credit
Commercial de France, primarily operating under the HSBC brand. HSBC France is now
the HSBC Group’s lead bank in the Eurozone, focusing on certain capital market
products for a global audience, and high net worth and international business in France.

• HSBC Trinkaus & Burkhardt AG was founded in 1785 and is one of the longest-
established members of the HSBC Group. It has operations in private, commercial and
investment banking and asset management.

• HSBC Bank Malta plc is one of the largest banks in Malta. It is a listed company but
its majority shareholder is the HSBC Group. Formerly the Mid-Med Bank, HSBC Bank
Malta is the second-longest established bank in Malta.

• HSBC Private Bank (Suisse) SA and HSBC Guyerzeller Bank AG are the Swiss
operating subsidiaries of the group's Private Banking business, with 12 locations in the
country. Much of the private banking business takes a lead from work done in
Switzerland, with a total of 74 locations around the world operating solely for private
banking business.

• HSBC Bank AS is now the fifth largest private bank in Turkey, having expanded
through internal financing and via acquisition since entering the market in 1990. The
bank has a network of around 190 branches, offering products and services to corporate,
commercial and personal customers, both under the HSBC brand as well as the
Advantage brand.

• HSBC Bank plc is one of the "Big Five" high street banks in the UK, maintaining a
large network of branches in England and Wales, with a smaller presence in Scotland and
Northern Ireland. It acquired this presence in 1992 with the acquisition of Midland Bank
plc. It also operates the previously Midland-owned telephone and internet bank First
Direct, the consumer lending brand Beneficial Finance, and the financial services
division of Marks & Spencer.

[edit] Middle East and Africa

• HSBC Algeria was founded in 2008, as a reminder, the British bank HSBC graduated
in May 2007, the green light of the monetary and credit of the Bank of Algeria for the
establishment of a subsidiary in Algeria, which will have a capital of 2,5 billion dinars, or
about 25 million euros, which will be the third year, to 3,6 billion dinars (36 million
euros) and will be headed by a manager of Algeria, in this case, Rachid Sekak. [1] [2] [3]

• HSBC Bank Egypt SAE was founded in 1982, and rebranded as HSBC in April
2001 after HSBC lifted its ownership stake from 40% to 94.5%.

• SABB (The Saudi British Bank) In Saudi Arabia HSBC is represented by The Saudi
British Bank which is a 40% owned subsidiary, and also a joint venture partner in HSBC
Saudi Arabia Limited, the kingdom’s first full service independent investment bank.

• HSBC Bank Middle East Limited The United Arab Emirates represents a key part
of HSBC Bank Middle East's business, with 16 branches and the firm's head office
located here.

• In the Hashemite Kingdom of Jordan, the HSBC Group is represented by HSBC

Bank Middle East Limited, the largest and most widely represented international bank in
the [Middle East] .

• HSBC established in Lebanon in 1949 and served Lebanon for decades.HSBC has
branches located in St. Georges Bay, Dora, Ras Beirut, Verdun and Zouk.

[edit] Global product lines and programmes

[edit] Group Service Centres
As a cost saving measure HSBC is offshoring processing work to lower cost economies in order
to reduce the cost of providing services in developed countries. These locations take on work
such as data processing and customer service, but also internal software engineering at Pune,
Hyderabad (India), Guangzhou (China) and Curitiba (Brazil).

Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if fewer
than 25,000 people were working in the centres over the next three years: “I don’t have a precise
target but I would be surprised if we had less than 15 (global service centres) in three years’
time.” He went on to say that each centre cost the bank from $20m to $30m to set up, but that for
every job moved the bank saves about $20,000 (£10,400).[12]

Trade unions, particularly in the US and UK, blame these centres for job losses in developed
countries, and also for the effective imposition of wage caps on their members.[12]

Currently centres exist in six countries, in Brazil in Curitiba, in India in Hyderabad, Bangalore,
Visakhapatnam, Mumbai, Kolkata and Pune, in China in Shanghai, Guangzhou and Shenzhen, in
Kuala Lumpur (Malaysia), Colombo (Kotte) (Sri Lanka) and Manila (Philippines). The Malta
trial for a UK high value call centre has resulted in a growing operation in Malta. An option
under consideration is reported to be a processing centre in Vietnam to access the French skills
of the population and therefore cut costs in the bank’s French operation.

On June 27, 2006, HSBC reported that a "small number" of customers had suffered from fraud
totalling £233,000 after an employee at the Bangalore call centre supplied confidential customer
information to fraudsters.[13]

[edit] HSBC Premier

HSBC Premier is the group's premium financial services product. The exact benefits and
qualification criteria vary depending on country, but typically require deposits and investments
of at least $100,000, £50,000, or €100,000, or a mortgage of at least $500,000 or £250,000.
Customers have a dedicated relationship manager, global 24 hour access to call centres and
preferential rates.

[edit] HSBC Bank International

HSBC Bank International Limited is the offshore banking arm of the HSBC Group, focusing on
providing offshore solutions and cross border services to expatriates and migrants. It provides a
full range of multi-currency personal banking services to a range of customer segments,
including a full internet banking and telephone banking service. Sometimes referred to as
"HSBC Offshore", the business also offers independent financial planning, and has
representative offices all over the world, often working alongside local HSBC operations in those
HSBC Bank International originated from the business started by Midland Bank and is based in
the Channel Islands with further operations on the Isle of Man. Its operations in the Channel
Islands are centred around its registered headquarters on the seafront in St Helier, Jersey. Named
'HSBC House', the building comprises departments such as Premier, Global Funds &
Investments, e-Business and a 24 hour 'Direct Banking Centre'.
[edit] HSBCnet

HSBCnet is a global service that caters to local business needs by offering specialised
functionality for different regions world-wide.

The system provides access to transaction banking functionality - ranging from payments and
cash management to trade services features - as well as to research and analytical content from
HSBC. It also includes foreign exchange and money markets trading functionality.

The system is used widely by HSBC's high-end corporate and institutional clients served
variously by the bank's global banking and markets, commercial banking and global transaction
banking divisions.

HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to its
corporate and institutional clients.

[edit] HSBC Direct

HSBC Direct is an online direct banking operation which attracts customers through high-
interest savings accounts and no service charges or minimum account balance requirements. It
was first launched in the USA in November 2005 and is now available in Canada, Taiwan and
South Korea.

[edit] Brand and advertising

The group announced in November 1999 that the HSBC brand and the hexagon symbol would
be adopted as the unified brand in all the markets where HSBC operates, with the aim of
enhancing recognition of the group and its values by customers, shareholders and staff
throughout the world.

[edit] Hexagon symbol

This was originally adopted by The Hongkong and Shanghai Banking Corporation as its logo in
1983. It was developed from the bank’s house flag, a white rectangle divided diagonally to
produce a red hourglass shape. It was based on a Scottish flag, the country the founder of the
company was born in. Like many other Hong Kong company flags that originated in the 19th
century, the design was based on the cross of Saint Andrew.The logo was designed by Graphics
artist Henry Steiner.
The 2004 Jaguar car, being driven by Mark Webber.

[edit] Sponsorship

Having sponsored the Jaguar Racing Formula One team since the days of Stewart Grand Prix,
HSBC ended its relationship with the sport when Red Bull purchased Jaguar Racing from Ford.
HSBC has now switched its focus to golf, taking title sponsorship of events such as the HSBC
World Match Play Championship, HSBC Women's World Match Play Championship (now
defunct), HSBC Champions and HSBC Women's Champions.

In football HSBC sponsors French club AS Monaco and Mexican club CF Pachuca, and in rugby
league, HSBC sponsors Telford Raiders in the Rugby League Conference. In Australia, HSBC
sponsors the New South Wales Waratahs rugby team in the Super 14 rugby union competition,
as well as the Hawthorn Football Club in the Australian Football League.

In the United States, HSBC owns the naming rights to the home arena of the National Hockey
League's Buffalo Sabres until 2026.

HSBC’s other sponsorships are mainly in the area of education, health and the environment. In
November 2006, HSBC announced a $5 million partnership with SOS Children as part of Future

HSBC sponsors the Great Canadian Geography Challenge, which has had around 2 million
participants in the past 12 years. Since 2001, HSBC has sponsored the Celebration of Light, an
annual musical fireworks competition in Vancouver, British Columbia, Canada. In 2007 HSBC
announced it would be a sponsor of the National Hockey League's Vancouver Canucks and
Calgary Flames. HSBC has also sponsored a professional gaming team that was disbanded late

HSBC will sponsor the British and Irish Lions on the 2009 tour of South Africa.

HSBC is the official banking partner of the Wimbledon Tennis Championships, providing
banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC Road
to Wimbledon National 14 and Under Challenge.[15]

[edit] Corporate governance

[edit] Executive pay
As of 2005 CEO Michael Geoghegan was earning over £700,000 (over US$1.4 million) per year,
and Chairman Sir John Bond, who retired in 2006, was earning $1.8 million. HSBC made record
profits in the 2004-2005 year earning over 12 billion GB Pounds or more than $20 billion.[citation

[edit] Household acquisition

In 2003 HSBC completed its controversial acquisition of Household International, after

Household settled on charges of predatory lending. In a 2003 cover story, The Banker noted
"when banking historians look back, they may conclude that [it] was the deal of the first decade
of the 21st century".[16] HSBC is expanding the Household International consumer finance model
to Brazil, India and elsewhere.

On May 17 2008 HSBC has acquired IL&FS Investment Ltd a leading listing retail broking firm
in India.[17]

[edit] Customer groups

HSBC splits its business into four distinct groups:

[edit] Personal financial services

HSBC provides more than 100 million customers world-wide with a full range of personal
financial services, including current and savings accounts, mortgage loans, car financing,
insurance, credit cards, loans, pensions and investments.

[edit] Commercial banking

HSBC provides financial services to small, medium-sized and middle-market enterprises. The
group has almost 2.5 million of such customers, including sole proprietors, partnerships, clubs
and associations, incorporated businesses and publicly quoted companies.

[edit] Global banking and markets

This customer group provides tailored financial services to corporate and institutional clients.
Business lines comprise Global Banking, Global Markets, Global Asset Management, Global
Research and Principal Investments.

This division was previously known as Corporate, Investment Banking and Markets.

[edit] Private banking

HSBC Private Bank is the marketing name for the private banking business conducted by the
principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank,
together with HSBC Guyerzeller and the private banking activities of HSBC Trinkaus &
Burkhardt, known collectively as Group Private Banking, provides services to high net worth
individuals and their families through 93 locations in some 42 countries and territories in Europe,
the Asia-Pacific region, the Americas, the Middle East and Africa. As of December 2007, profits
before tax were US$1,511 million and combined client assets under management were US$494

[edit] Controversy
[edit] Sudden withdrawal of student overdrafts

In July 2007, HSBC suddenly withdrew its interest-free overdrafts for students. Students
graduating that year discovered that they were to face unexpected bills of up to £140 a year.[18]
Students mobilised protests using the social networking website Facebook, and in August HSBC
reversed its policy,[19] freezing overdraft charges to recent graduates and pledging to repay
charges deducted in August while holding talks with the NUS

[edit] Data loss

In April 2008, HSBC confirmed it had lost unencrypted data disks containing the life insurance
policy details for 370,000 of its customers.[20]

[edit] Cultural insensitivity

In 2008, HSBC was accused of 'cultural insensitivity', for running an advertising campaign
featuring an overweight white man dressed up to look like a Sumo wrestler. The campaign has
upset members of Britain's Japanese community, who claim that the man's skin tone was
darkened and that make-up was applied that appeared to narrow his eyes[21]. HSBC denied
making the model look as if he was from 'a specific country or region', but did admit that make-
up had been applied to his face and eyes and that his skin tone had been made to appear more
tanned [22].

[edit] Investment in fossil fuels

HSBC has faced criticism due to its investment in coal projects. HSBC has invested $10bn to
energy corporation E.ON and other companies utilising coal [23].