mba -course work - dell

8/7/2019 MBA -Course Work - DELL

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DELL, Inc.

Prepared by: RovshanEffects by: Ismayil

Addition informations by: VsaleSpeechs by: Rauf

Group Leader: Alizade


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COMPANY HISTORY 1984At the age of 19 with $ 1,000 in start up capital Micheal Dell founded Dell

Computer with simple vision and business concept that Personal computercould built to order and sold directly to customer.He believed that:1. Bypassing distributors and retail dealers eliminated the markups of

reseller.

2. Building to order greatly reduced the costs and risks associated withcarrying large stock of parts, components and finished goods. 1985Dell build and design the first computer system. 1988Dell had raised $ 30 Million in its IPO. At this time his capital is $ 85 Million. 1996

Dell goes online; $1 million per day in online sales 1998Dell had a 12% share of PC market in US and became one of market leader in

computer business with Compaq and IBM until now.
http://www.dell.com/content/topics/global.aspx/about_dell/company/leadership/executive_team?c=us&l=en&s=corp


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Company Tour

We Make Computing Easy.Like it should be

Our Direct Connection

Why Were the Industry Leader Our Product & Service

We Know EnterpriseComputing Firsthand

Were Close to CustomersAround the World

Overview

Focus

Leadership

Result

Global


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WHAT IS DELL & WHATWE DO?

Premier provider of product and services

Introducing new technologies with the help ofleading companies

Most preferred computer systemOur simple concept

Best understanding of customer needs

Our direct business model

Introducing latest technologies


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MISSION & VISION

MISSION

we make computing easy like it should be

VISIONour persistent focus on delivering the

best possible customer experience by directlyselling our services based on industry standardtechnology


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DELL`S GOAL

While our primary goal is to build on our positionas one of the worlds most admired companies,we also want to foster a great internal culture. Aswe learnedyou cant have one without the

other.

Elizabeth Heller Allen,

Vice President of

Corporate Culture, Dell


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1. Modify laptop designs according to studentspreferences.

2. Double laptop sales in student market.

3. Increase revenues by 25% by the end of the

second year oflaunching.

4. Develop a promotional campaign to promote themodified

laptops.5. Increase awareness of the existent agency

project objective

research strategic plan conclusion.

OBJECTIVES


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Three golden rules atDell

`Disdain inventory'

`Listen to the customer'

`Never sell indirect'


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History Ability to change

Competition Resources Ambitions

BUSINESS PLAN

Sales and marketing plan

Production plan

Finance plan human resources plan

Information system plan

Goals

Objectives

Priorities

DELL BUSINESS PLAN


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Its products and services

The company offers a broad range of productsand services:

Mobility products;

Desktop PCs; Software and peripherals;

Servers and networking;

Services;

Storage.


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o ty ote oocomputers

Mobile workstations) The XPS and Alienware lines of notebookcomputers are targeted at customers seeking the bestexperiences and designs.

The new models of The Inspiron,Latitude

Vostrolines of notebook computers added to theportfolio of the company in Fiscal 2009 satisfies thecustomers needs.

The Dell precisionline of mobile workstations isintended for professional users who demand

exceptional performance to run sophisticatedaplications


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Desktop PCs

XPS Alienware lines of desktopcomputers disigned by the companydiffers with its multimedia capability to the

highest gaming performance The OptiPlex computers is disigned for

business goverment and intitutionalcustomers


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Software and peripherals

The company offers Dell branded printersand displays and a multimode ofcompetitively priced third-party peripheral

products including software titles scannerstelevisions, notebook accessories, digitalcameras, printers, networking and wirelessproducts, power adapters and other

products


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Servers and networking

The company presents the affordableperformance, reliability, scalability by itsPowerEdge and PowerConnect line of

servers The Dell expects to refresh its server and

networking product portfolio in fiscal 2010


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Services The services business of the Dell offers a

broad range of IT services:

Infrastructure Consulting Services

Deployment services Asset Recovery and Recycling Services

Training Services

Support services Managed services


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Storage

The Dell offers a comprehensive portfolioof advanced storage solutions , includingstorage area networks, network-attached

storage, direct-attached storage, disc andtype backup systems, and removable discbackup.

Its storage systems are easy to deploy

,manage and maintain.


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Dells CompetitiveAdvantage

Dells Direct Business Model

Commitment to Open Standards

Order Velocity/Build to Order

Supply Chain Optimisation

Continuous Process Improvement


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:A Fundamentally Different

Model

SuppliersSuppliers SuppliersSuppliers CustomersCustomersCustomersCustomers

Dell Direct Model

SuppliersSuppliersSuppliersSuppliers CustomersCustomersCustomersCustomers

Competitor Model

CompetitorCompetitorCompetitorCompetitor ChannelChannelChannelChannelOutsourcingOutsourcingOutsourcingOutsourcing

Ownership of the value chain

Loss of control over product &information flow & customer relationships


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DELL DRECT Model


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Direct Business Model

Suppliers Customers

Direct Model

Continuity of Supply

E-businessCollaboration

Technology Leaders

Low-costManufacturers

Best Customer Experience

Low Cost Efficiency &Highest Quality

Partnering/VirtualIntegration

Product Quality

Price forPerformance

Customization

Reliability, Serviceand Support

Latest Technology


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Benefits of Dell DirectModel

Better understand customer needs

Customers receive exactly what they want: notstandard solution

Minimized inventory New technology delivered immediately

Th B fiB fit f L


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The BenefitsBenefits of LowInventory

90

95

100

105

110

115

120

-14

-12

-10 -8 -6 -4 -2 0

Typical

Dell

Relative

ComponentCost

Weeks Relative to Delivery

With 3 DaysInventory,Dell Buys Here

With 90+ Days Manufacturerand Reseller Inventory, ChannelManufacturer Buys Here

10-12% CostAdvantage


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Customer

Local Suppliers

Dell Factory

Lean Inventory Model

Logistics Hubs

Suppliers

Results: 3 days of inventory - Inventory turns of 122 per year

Delivery

Supplier Owned Dell Owned


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Pass cost

savings onto customer

Pass cost

savings onto customer

Competitivepricingignitesdemand

Competitivepricingignitesdemand

Lower costdrivesIncreaseddemand

Lower costdrivesIncreaseddemand

Industry's most

efficientprocurement,manufacturingand distributionprocess

Industry's most

efficientprocurement,manufacturingand distributionprocess

ow e o e r ves ar eShare

CompetitivePricing

EfficientModel with lowestCost Structure

HelpDriveSupplierBusiness

DrivesMarketShare

Improved

Customer

Experience

t t


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pen nnovat on n ect veR&D

The traditional approach to innovation tends to produce proprietary technologies andproducts that are often hard to migrate from as a customer. Dell have a more open andeffective approach to R&D.

Dell spends little on product research and development

$440 million a year, vs. $4 billion a year at Hewlett-Packard.

Dells organi ational str ct re


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Dells organizational structure:The virtual company

Direct relationship with customer is strategic; rich informationflows

Outsource non-strategic functions Information flows substitute for physical flows

Coordinate value network thru IT-enabled information processes

Systemintegrators andresellers

Dell Ordermanagement

Customerrelations

Operationsand supplychain

ComponentManufacturer

Componentsuppliers

Third partyHW and SWsuppliers

Distributors

Logisticscompanies

Repair andsupport providers

Customer

DELL th P ll P h


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VirtualIntegr a

tion

Customer

Dell

Suppliers

Dell Supply Chain

PUSH

PULL

DELL the Pull-Pushboundary

Typical PC Supply Chain(Compaq, HP, IBM, etc.)

Customer

DistributionChannels

Manufacturer

Suppliers

PUSH

PULL


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Dells Direct vs. IndustryIndirect model Strengths of the direct model

Most efficient method of distribution

Extremely low inventories.

Rapid response to customer changes.

Strong relationship with customers andsuppliers.

Weaknesses of indirect model

Time = money (rapid innovation by partssuppliers send value of newly built PCsplummeting quickly).

Have to discount old technology.

Retailer sends unsold units back to

manufacturer.Results:Direct vendor Dell has best performance.Dell has forced other vendors to go direct.Industry as a whole has improved performance.


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Reason for Dells Growth

Was a pioneer in configure toorder systems.

Implemented JIT (just in time)

manufacturing approach


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Achievments A Fortune 200 company in just 14 years Dell is the World's largest PC maker having Build To Order

model.

No 1 in profitability for the computer systems industry

As of 2006 it employs more than 63,700 people. Customersin 170+ countries.

For the last couple of years it has held its position as marketleader (it took it from rivals Hewlett-Packard).

According to the Forbes 50 2005 list, Dell ranks as the 28th-largest company in the United States by revenue.

In 2006, Fortune magazine ranked Dell as No. 8 on its annuallist of the most-admired companies in the United States.

Major competitors are IBM, APPLE, HP.


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DELL Inc The SuccessSecret

Internet coupled with Direct Business Model- sell directly to end customers instead of intermediate distributors, resellers.

Virtual Integration- using sophisticated CRM, SCM systems at respective ends as well their integration- already integrated with 38 procurement and ERP systems across all its clients- vendors Ariba, SAP, PeopleSoft, J.D. Edwards Dell integrated with their ERP (Source: RobRosenthal, Dells B2B web site strategy, October 2003, IDC #30202)

Selling Points- Internet, B2B (Premier Pages), Phone-calls, Mass catalog mailings

Do not Just sell Products sell Values- client asked to put tags on their computers- proactive in solving clients pain points preloaded software

Dell was much less mature compare to IBM and HP at time when Internet took off requiredmuch less effort to adapt its systems to Internet technologies.

IBM and HPs core competency was product innovation and development, Dells expertise was inassembling and catering to business needs.


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Dell Inc Boundaries of Direct

Business Model ? Have other manufacturers been able to do this? Why or why not? Is this model

bounded in the PC industry?

Presently HP is using the Direct Model. Supposedly Compaqs strong directsales model helped HP after the merger. Prices are in comparison to Dell.

Source - www.ecommercetimes.com/story/19385.html

Compaq emulated the model before merger with HP.

Dell had better profitability management.

Source -http://www.findarticles.com/p/articles/mi_m0DTI/is_12_31/ai_

111163644

Local computer vendors

B2B markets common meeting point for manufacturers and institutionalconsumers.


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Customer LessonsLearned

Form a direct model that specializes on marketsegments or customer types.

Know EXACTLY what the customer wants and thenprovide it.

Price is not a sustainable competitive advantage.

Sustain loyalty through customers and employeesResponse TimeQuality ProductsValuable FeaturesMake the Experiencing of Products EASY


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Dell Inc Key Questions

Is the Direct Business Model a new model ?

No, its not ! all the primitive businesses used to trade like this today hotdogstands all over Manhattan is an example of that model on small scale

What new emerging technologies will push this further ?

- SOA will help refine and innovate these and perhaps new similar kind of businessmodels by reducing operational and transaction cost.

- Web Services will remove human interaction further reducing costfor example:

- SLA will be negotiated by software agents- Vendors selection based on their expertise will be automated

- Long life Lithium ion batteries increased sales- RFID tags can further streamline the supply chain, inventory and shipmenttracking process


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? Thank You >

Three golden rules at Dell :

`Disdain inventory'

`Listen to the customer'

`Never sell indirect'

mba -course work - dell

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