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Presented by:Abhishek Shahi

Anu Gupta

Krutika Doshi

Saumya Chaturvedi

Shivam Behl

Vipan Kumar

Direct From DELL Direct From DELL

Strategies That Revolutionized an Industry Strategies That Revolutionized an Industry

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$2.0B

In doing so, Dell will meetcustomer expectations of:

Highest quality Leading technology Competitive pricing

Individual and company accountability Best-in-class service and support Flexible customization capability

Superior corporate citizenship Financial stability

Mission Statement: To provide customers with superb value,Mission Statement: To provide customers with superb value,

high quality, relevant technology, customized systems, superiorhigh quality, relevant technology, customized systems, superior

service and support, and products and services that are easy toservice and support, and products and services that are easy to

purchase and use.purchase and use.

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Dell the foundation

Initially named as PCs Limited, Dell was founded in 1984by Michael Dell

Headquartered in Round Rock, Texas

The startup aimed to sell IBM PC-compatible computers

built from stock components

In 1985, the company produced the first computer of itsown design the "Turbo PC", sold for US$795 whichcontained an Intel 8088-compatible processor running ata speed of 8 MHz.

Rechristened as Dell Computer Corporation in 1988 andfinally Dell Inc. in 2003 due to its expansion beyondcomputers and into other arena

First international operation established in Ireland in1987

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THE SOUL OF DELL

Dell characterizes its statement of corporate philosophy called the "Soul of Dell which defines the kind of company itis and aspires to become. Below are the core elements of the Soul of Dell:

Customers: We believe in creating loyal customers by providing a superior experience at a great value. Weare committed to direct relationships, providing the best products and services based on standards-basedtechnology, and outperforming the competition with value and a superior customer experience.

The Dell Team: We believe our continued success lies in teamwork and the opportunity each team memberhas to learn, develop and grow. We are committed to being a meritocracy, and to developing, retaining andattracting the best people, reflective of our worldwide marketplace.

Direct Relationships: We believe in being direct in all we do. We are committed to behaving ethically;responding to customer needs in a timely and reasonable manner; fostering open communications andbuilding effective relationships with customers, partners, suppliers and each other; and operating withoutinefficient hierarchy and bureaucracy.

Global Citizenship: We believe in participating responsibly in the global marketplace. We are committed tounderstanding and respecting the laws, values and cultures wherever we do business; profitably growing in allmarkets; promoting a healthy business climate globally; and contributing positively in every community we callhome, both personally and organizationally.

Winning: We have a passion for winning in everything we do. We are committed to operational excellence,superior customer experience, leading in the global markets we serve, being known as a great company andgreat place to work, and providing superior shareholder value over time.

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Dells Global Presence

The AmericasThe Americas EMEAEMEA Asia PacificAsia Pacific ChinaChina

XiamenChina

PenangMalaysia

LimerickIreland

AustinTexas

NashvilleTennessee

Eldorado do Sul

Brazil Chennai

India

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Dells Competitive Advantage

Dells Direct Business Model

Commitment to Open Standards

Order Velocity/Build to Order

Supply Chain Optimisation

Continuous Process Improvement

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Dell in China

Compared to United States, where the Personal Computer Industry issaturated, in China the Personal Computer Market is still growing. Accordingto Forrester research, China had 54 million PC users in 2007, but the numberis expected to grow to about 500 million by 2015 - about half of the worldwide increase. While computer shipments are growing at less than 3% in theU.S, the Chinese market is taking in 20% a year, which doubles theworldwide rate. China's Lenovo, Haier and Founder, along with Taiwan's Acer

and Asus are also major players in the Chinese Market apart from Acer, Delland HP.

Difficulties faced by Dell in China:Lack of infrastructure

Lack of credit card usage in China

Lack of efficient and effective postal service

Chinese customers see and feel the product before purchasing.

Business practices common in China such as bribery and giving of gifts,violate normal Western corporate rules

Chinese governments inclination towards local players

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Core Competency

Direct Selling Model

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Selling what you have,rather than

making what you want to sell

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What the direct model is ???

Concept- Direct selling to customers.

You can place order over- telephone, web-site.

You can make payment by credit card, inyour nearest bank or at your gate.

You can customize the product according toyour need

You will get delivery within next 48 hours.

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The three tests

Wide Access- three geographic regions:the Americas; Europe, Middle East and

Africa; and Asia Pacific-Japan.

Difficult to Copy- IBM, Compaq andChinese giant Legend tried to replicatebut failed.

Customers Benefit- Benefit of goodquality product at low cost.

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Why this competency???

To eliminate its inventories and huge workingcapital requirement.

Generated enormous amounts of cash that

used to fuel its growth.Avoided the time and cost factors theintermediaries add.

Finally high standard of customer satisfactionby competitive price and high quality.

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How they did it- The Magic

Account selection

Demand management

Product lifecycle management

Supplier management

Forecasting

Liquidity management

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PestAnalysis

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Political Factors

Lot of red tape involved in securinggovernment contracts.

Chinese government opened markets forInternational players.

Chinese government prefers to promotenational PC vendors to foreign companies.

Government control of internet usage inChina is another threat to the growth of theinternet.

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Economic Factors

Problem of Software Piracy.Shortage of skilled labor.

Standard of living is not very high.

Customers want the cheapest system.

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Social Factors

Consumers have negative attitudetowards huge investment involve incomputers

Dell had to incur cost in following DirectModel Approach to gain consumersfaith & trust in the company & product.

Less awareness regarding e-commerce &usage of cards.

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Technological Factors

Chinas annual P

Cproduction wouldreach 7.6 million making it the third

largest in the world.

The potential for Internet growth is huge

in China, giving DELL the opportunitiesto expand into a new market.

Internet facilities are costly in China.

Chinese Govt. trying to develop SoftwareIndustry

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PORTERS FIVE MODEL

INTENSE

NONE MODERATE

HIGH

HIGH

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PORTERS ANALYSIS

Threat of New Entrants HIGH Foreign and local competitors IBM, Compaq and HP also entered in 1990s Less government policy barriers

Potential barriers include High Industry Growth

Threat of Substitutes NONE

Bargaining Power of Suppliers HIGH Dell and most competitors use the same core productsthat are required to make PC.

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PORTERS ANALYSIS CONTD..

Bargaining Power of Buyers MODERATE Few buyers purchase a large portion of industry output Brand reputation and product differentiation can mitigate

Competitive Rivalry INTENSE High profit potential due to industry growth

Price pressure from local competitors fixed costs of production capacity Aggressive competitive response

Lenovo adopting Dells direct sales model in China Lenovos joint venture with IBM to increase its share

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Industry players in China in 2002

30

10

6

54

3

42

Market Share

LegendFounder

Tongfang

Dell

IBM

HPUnbranded

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Industry players in China in 2007

36

13

9

8

6

28

Market share

Le ovo

o de

ell

HP

To g g

Othe

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Lenovo Vs Dell in 20092009

5,80,000 Computers sold at

subsidized rates in the rural market. Lenovo sold 42 % out of the total .

Dell had less than 1% .

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SWOT

Analysis

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Strengths

Direct Model

Product Reliability

Customer Relationship

Build To Order

Competitive Prices

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Weakness

Dependent on suppliers.

IT advancement.

Low budget on R&D

Absence of Gunaxi and Physical touch.

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Opportunities

Internet

Introduction of new and enticing

products

Bluetooth,WiFi,4G services

Handset industry

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Threats

Strong Brand names in the market.

Price war

IT advancement(PDAs)

Dell sources from Far Eastern nationswhere labour costs remain low,competitors can do the same

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Thank You

Three golden rules at Dell :Three golden rules at Dell :

`Disdain inventory'`Disdain inventory'

`Listen to the customer'`Listen to the customer'`Never sell indirect'`Never sell indirect'