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Dell

selling Directly, Globally

I believe we have the right business model

for the Internet age

- Michael Dell (CEO )

Dell Computer corporation

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Dell Profile:- Founded ± 1983 with $1000 capital.

Dell Corporation Computer ± 1984.

Went in Public in 1988. 1994 ± Ranked Number 2 , Fastest

growing company.

Presence in more than 170 Countries.

Youngest CEO ± Fortune 500.

$6.2 m US Based business$21.7 billion

per yearacross world

CEO of the Year , PC Magazine - 1997

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Business Model

DELL

Consumer

Policies:-Directly sells to customer.

Dealing Directly with Suppliers.

Just in-time Inventory control.

Inventory Cost minimum.

Pass benefits to Customer.

Golden Rules

1. Disdain Inventory.

2. Always listen to customers

3. Never Sell Indirectly.

Bringing New Technologies to affordable prices ± to widestgroup of people.

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DELLS BUILD TO CUSTOMER ORDER

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AND FINALLY, BOXING, SHIPPING AND DELIVERY IS DONE. THIS

WHOLE PROCESS TAKES LESS THAN FIVE HOURS FROM START TO

FINISH.

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Growth And Expansion beyond US.

Targeting Small and Medium scale

business. Lead to Price/performance revolution

1986 - US$60 (m) sales.

1987-1991 ± 11 new operations across

world. 1998 ± offices in 33 countries ± selling

services and computers more than 170countries.

³Our Success was, in fact, something of a crisis point´

Michael Dell.

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Growth Continue.

1995 stock value more than 700%then 1988.

1995 ± best investment with 81.2%return.

Between 1988-1998 36000%

growth. US$158m to US$18 B company.

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WWW.Dell.com

Launch ± 1994.

Phase ± I.

Link with customers.

Customer ± price and product.

Phase ± II.

Configure and buy online. ( US$3 m sales per day)

³Dell, the company seems to have been born and evolvedwith an anticipation of the internet age´

Michael Dell.

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Dell.com continue

Phase ± III.

Online technical Support.

Order status information.

Online downloading software.

More than 6500 products from DellWarecatalogue.

24*7 technical support.

3 way ³Information Partnership´  Supplier ± customer as collaborator

Improved Supply and Demand chain.

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1ST QTR 1997

2ND QTR 1997

3R D QTR 1997

4TH QTR 1997

SALESPER DAY

US$1 M US$2 M US$3 M US$4M++

TECH.SUPPOR T/QUERIES PER WEEK

30000 45000 60000 120000

VISITOR 

S PER WEEK

213000 225000 250000 400000

%SALESOUTSIDE 

US

0% 5% 10% 17%

DELL¶S DAILY ON-LINE SALES AND WEEKLY

TECHNICAL SUPPORT VOLUMES, 1997

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NET R EVENUE BY R EGION FOR YEAR ENDED 29 JANUARY, 1999

68%

6%

26%

AMERICAS

ASIA PACIFIC

EUROPE

64%

23%

13%

DESKTOPS

PORTABLES

ENTERPRISE

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$617

$944

$1,460

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

FY 97 FY 98 FY 99

Net Income (IN US$ millions)

$7,759

$12,327

$18,243

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

FY 97 FY 98 FY 99

Net sales (IN US$ millions)

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Dell in China.

Feb ± 1998. Most populous country.

China Customer Centre. Growth ± steadily, sales through

distributor.

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What happened in China. Staffing Issue.

Bureaucracy and Red tape

Cost of PC

Dell Stopped Distributor.

LCA ± PAD ± HSB

People uncomfortable with credit card.

Not used to Internet and cost of internet .( 0.06 person per 1000 users.)

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Market share in China ( 1999)RANKING Q2 1999 MAR  KET SHAR E 

(%)

1ST LEGEND 208841 17.3

2ND

IBM 82330 6.8

3RD HEWLETT-PACKARD 71287 5.9

4TH FOUNDER 67920 5.6

5TH GREAT WALL 38755 3.2

7TH DELL 27955 2.3

OTHERS 706863 58.7

TOTAL 1203951 100.0

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Solutions 1.Showrooms with free internet facilities should be

put up in all of major towns and cities of China.

2. New websites which would showcase the productsof Dell in 3-D should be launched in which full

descriptions of all the products should be given. 3. People should be encouraged about using only non-

pirated softwares and programs.

4. Decrease the cost of production by joining handswith local companies.

5. Focus only on Large Corporate Accounts, PreferredAccounts Division and Home and Small Businessesand ignore the consumers who don't even have thepurchasing power.

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Abhishek.

Ajeet. Bhavin.

Dharmendra. Maisura. Tehjib.