Strategic Management - Dell Final

8/2/2019 Strategic Management - Dell Final

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Presented By:

Anil Yadav, 10PT2-06Mandeep Singh, 10PT2-22Puneet Taneja, 10PT2-35Dr. Punit Ghai, 10PT2-36Radhey Sham, 10PT2-37

Faculty:

Prof. G K AGARWAL

Strategic Management, Semester IV

MDI, PT-PGPM October, 2010 Batch


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Agenda Company Updates

Mission

Objectives

Snapshot

Dell Strategy

Strategic Analysis

SWOT Analysis

Recommendations

References

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Company Updates Mission Statement

To be the most successful computer company in the world at deliveringthe best customer experience in markets we serve

ObjectivesDell will meet customer expectations of:

y Highest quality

y Leading technology

y Competitive pricing

y

Individual and company accountabilityy Best-in-class service and support

y Flexible customization capability

y Superior corporate citizenship

y Financial stability

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Profits & Revenues

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3

4.5

6

7.5

9

10.5

12

13.5

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gross Profit in Billion Dollars

0

10

20

30

40

50

60

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Revenue in Billion Dollars


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Strategies

Dell Way

Cost Leadership

Competitor Action and Response

Innovation

Responsiveness to customers

Product and Market Diversification

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SnapshotYear Events/Revenues Issues

Diversification

PC MarketMarket

ProductManufacturing/

Selling

1984 Established

1985 Turbo PC

1986 $6M

1989 IPO Olympic failed Notebook

1991 $546M

1992 Laptop problems1993 UK,Australia, Japan (S)

1996 Ireland, Malaysia (M) Network Server

1997 Workstation System

1998 China (M)

1999 Number 1 Brazil (M)matures;

96-99: 16% sales growth

2001 $32B Network Switches US PC 34% of Global PC

2002 Diversification Projectors, Printers PC sales drop by 11%

2003

Flat Panel TV, Digital Jukebox,

USB Keydrives, PDAs

2004Partnership:

Fuji, Xerox, Kodak, SamsungMicrosoft, Oracle

HP 40% RevenueGrowth in China

00-04: 3.6% sales fallGrowth Rate 16.3%Price decline 17%

=>Revenue decline 4%

2005 $56BFailed to achieve targets;

Customer Satisfaction down;$450M Write-off

Growth Rate 12.2%; Survey:90% At least 1 PC36% 2 or more PC

52% reluctant to purchase PC51% decline Revenues;

6Quarters falling revenues

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Company Updates

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Dell Strategyy Operational Strategy

y Low Inventory

y Listen to the customer

y Sell Directly (No intermediaries)

y Supply Chainy Revolutionized the buying processy Markets its direct sales modely Eliminated the need for central warehouse and physical store presencey Saves money and time

y Sales,

y Production,y Warehousing

y Benefitsy Reduced pricey Total customization of personal computers

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VirtualIntegratio

n

Customer

Dell

Suppliers

Dell Supply Chain

PUSH

PULL

Typical PC Supply Chain

(Compaq, HP, IBM, etc.)

Customer

DistributionChannels

Manufacturer

Suppliers

PUSH

PULL

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Dell Supply Chain


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Corporate Strategy

Innovation

Cost Leadership

Responsiveness (Reliability, Quickness, Flexibilitye.g., Dell Customer Support)

Competitive Advantage Drives Top line and

Bottom line growth

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Strategic-Fit Line

CostHigh Low

ResponsivenessSpectrum

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SWOT Analysis Internal

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Strengths Weaknesses

Brand Value Huge Supply Chain

Direct Business Model

- Reducing marketing and sales costs- Make to order reduces inventory costs

High Dependence on few vendors

Process Innovation

High Operational EfficiencyJIT and MTO

Quality Issues

Strong Customer Service Attracting College Student Segment

Customized ProductLack of Adequate R&D, BreakthroughInnovations

Cost Advantage

Economies of scale


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SWOT Analysis External

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Opportunities Threats

International expansion

Emerging markets CEMEA (Central

Europe, Middle East, Africa)

Commoditization of Computer Market

Efficient Supply Chain to reduce costs Fluctuations in World Currency Markets

Greater Product DiversificationStrong Competitors with diversebusinesses IBM, Apple, HP

Target Education Sectorin new markets Changing Computing Model

Retail Stores customer experience Slowing Growth Rate of ComputerIndustry

Acquisitions

Offering services to mid-size

businesses


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Recommendations Vertical Integration

Owning complete supply chain

Data Centers Server computers

Storage Networking equipment

Customization of Diversified Product Portfolio Complete computer hardware solutions

Assembled products

Consumer electronics Aggressive on Acquisitions

Explore new emerging markets

New sectors Services business

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Getting Back to Growth Phase

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0

10

20

30

40

50

60

70

80

1990 1995 2000 2005 2010 2015 2020


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References http://www.idc.com/getdoc.jsp?containerId=prUS22937811

http://arstechnica.com/apple/news/2011/07/apple-now-3rd-in-us-market-share-as-overall-pc-market-remains-soft.ars

http://money.cnn.com

http://www.idc.com/getdoc.jsp?containerId=prUS22937811

http://content.dell.com/us/en/corp/newsroom-acquisitions.aspx

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2/29/2012 18Sem-4, PT-PGPM, Oct 2010

Thank You

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Strategic Management - Dell Final

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