dell computers

DELL COMPUTER DELL COMPUTER CORPORATIONCORPORATION

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IINTRODUCTIONNTRODUCTIONAs On January 2005, Dell Computer

Corporation Was The World's Largest Direct Selling Company.

57,600 Employees In More Than 80 Countries.

Customers In More Than 170 Countries.Market Leader – Persistent Focus On

Delivering The Best Possible Customer Experience.

Incorporated In 1984 By Michael Dell At The Age Of 20 With $1000.

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Conti…..Conti…..

Best understand customers’ needs and efficiently provide the most effective computing solution by selling them directly.

This business model eliminates the retailers.

It became no# 1 $100 billion company.

It became no#1 retailer of personal computers, outselling IBM and Hewlett-Packard.

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Conti…..Conti…..

Traditional business model of competitors:“Build- to- Stock.”

Retailers and other intermediaries takes long time to dispatch the computers.

In 1980, Michael Dell got the chance to reengineer the value chain of PC industry because of two reasons:

1) Corporate customers were becoming sophisticated and therefore didn’t required personal selling.

2) Mass Customization.

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Business Model Of Dell:

It outsourced all components but performed assembly.

Eliminated retailers and shipped the components directly from its factories to end –users.

Took orders from internet and phone.Designed integrated supply chain

linkage .

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Conti…..Conti…..

By October 2004, it increased its product line and started to sell large no. of consumer electronic goods like Digital music player, flat screen television to cameras and printers.

It adopts the strategy of direct sales in all its product.

In November 2004, 15% of Dell’s revenue came from consumer electronic goods.

It also moved to the business of servers and storage in 2005.

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Achievements of DellAchievements of Dell

Ranked as Most admired co. of America by Fortune in 2005.

Revenue growth @ 19% - 7% higher than industry.

Net margin of 6% - 5% in the industry.

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Que. 1 :-(A) What is Dell’s Strategy ?

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DELL CAN BEST UNDERSTAND CONSUMERS NEEDS EFFICIENTLY, PROVIDES THE MOST EFFECTIVE COMPUTING SOLUTIONS ,TO MEET THOSE NEEDS BY SELLING COMPUTER SYSTEMS DIRECTLY TO CUSTOMERS.

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(B) What is the basis on which Dell builds its competitive advantage ?

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ENVIRONMENTAL ANALYSIS

Competitors Customers Suppliers Regulatory Social/Political

INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how Distribution Know-

how Logistic Know-how

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IBM . HEWLETT-

PACKARD.(Through

Intermediaries)

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ENVIRONMENTAL

ANALYSIS

CompetitorsCustomersSuppliersRegulatorySocial/Political

Customers in more than 170 countries.

They provides best experience to the customers through mass customization.

Increase the loyalty.

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ENVIRONMENTAL

ANALYSIS

CompetitorsCustomersSuppliersRegulatorySocial/Political

Different suppliers for different peripherals.

Large no. of suppliers for other consumers electronics.

Very closely to its assembly factories.

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ENVIRONMENTAL

ANALYSIS

CompetitorsCustomersSuppliersRegulatorySocial/Political

No regulatory hurdles.

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ENVIRONMENTAL

ANALYSIS

CompetitorsCustomersSuppliersRegulatorySocial/Political

◦Best match of social/political issues in different countries.

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ENVIRONMENTAL

ANALYSIS

CompetitorsCustomersSuppliersRegulatorySocial/Political

Best technology for order-taking through internet and phone according to consumers’ needs.

And also best technological communication with suppliers.

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INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how

Distribution Know-how

Logistic Know-how

Outsourced all components but performed assembly.(Customization)

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INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how

Distribution Know-how

Logistic Know-how

Direct Selling to customers.

Effective Advertisements.

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INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how

Distribution Know-how

Logistic Know-how

Good supply chain policy.

Quick delivery to consumers according to their needs.

(Just need to assemble all the components)

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INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how

Distribution Know-how

Logistic Know-how

Good logistic chain between suppliers to consumers.

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INTERNAL ANALYSIS

Technology Know-how

Manufacturing Know-how

Marketing Know-how

Distribution Know-how

Logistic Know-how

Sophisticated customers having experience & Knowledge of computers.

Mass customization.

Direct selling by removing intermediaries.

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Best internal competencies : Technology Know-how Manufacturing Know-how Marketing Know-how Distribution Know-how Logistic Know-how

External Opportunities : Sophisticated customers having

experience & Knowledge of computers. Mass customization.

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DELL CAN BEST UNDERSTAND CONSUMERS NEEDS EFFICIENTLY, PROVIDES THE MOST EFFECTIVE COMPUTING SOLUTIONS TO MEET THOSE NEEDS BY SELLING COMPUTER SYSTEMS DIRECTLY TO CUSTOMERS.

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Que. 2 :-

How do Dell’s control systems help execute the firm’s strategy ?

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MANAGEMENT SYSTEMMANAGEMENT SYSTEM

Speed & pace at every step of business

Reduced number of workers in line.Buying & assembling components as

per need of customersevaluation is on two basis… A) Financial (ROIC, component purchasing

cost, selling & adm. cost

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B) non financial measures (inventory, receivable days, payable days, accuracy of demand forecast)

InformationLocalized decision makingImplementation of employees’ ideasQuick strategies implementation

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