Slide 1

Done by Group 2

INTRODUCTIONStarted by- Michael Dell(19 at that time) in his dorm room at the University of Texas in 1984 with $1000.Company headquartered- Round Rock, Texas, USA.Revenue- around US$63.07 Billion in 2012.2001- became the No.1 computer systems in the world.2013- 3rd largest PC vendor in the world after HP and Lenovo.

COMPETITION IN PC INDUSTRYThe PC industry is driven by rapid technological improvements in components, microprocessors, semi conductor and storage devices.2 factors came into play in determining the availability of PC companies to manage inventory and introduce new products.Traditional distribution system of PC Industry- Indirect Model: THE CHANNEL.

COMPETITOR ANALYSIS

SWOT ANALYSIS

Opportunities- e-comerce increasing and use of net

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CORE ELEMENTS OF STRATEGYMass customization- End result: meeting customers needs.JIT component inventories- quick introduction to latest technology.Direct Sales.Market Segmentation.Customer relation.Extensive data and information sharing with both suppliers and customers.

Market segmentation: please speak in detail6

BUSINESS MODEL

BUSINESS MODELPioneer in Configure to Order approach- delivering individual PCs configured to customer specifications.To minimize delays between purchase and delivery- Dell has a general policy of manufacturing its products close to its customers.Implementation of JIT- which minimizes inventory cost.Low inventory- Dell took into consideration, components depreciate rapidly.

MINIMUM INVENTORY- A SUCCESS!Build to order model.Direct to Sell.JIT Inventory Management- 3 days.Focus on speed of inventory delivery process.

Say this very important: Michael Dell quoted 8 days of inventory competitors -40days , if intel comes out with a new chip , I am going to get that in the market 32 days sooner.9

DELL DIRECT MODELComponent ManufacturerDistributorDell CustomersComponentsOrderProducts

DELL DIRECT MODELThe company outsourced all components but performed assembly.It eliminated retailers and shipped directly from its factories to end users.It took customized orders for hardware and software over the phone or via the internet.Designed integrated supply chain.

Last point: linking Dells suppliers very closely to its assembly factories and order intake system.Benefits of this model: 1. can keep larger slice of the profits to themselves.2. Can acesss history of customer sales and anticipate their needs.3. Can track and resolve quality problems.11

INTERGRATING THE INTERNETDelivering online technical support and order status information.Designed online retail stores.Premier Pages-access to only authorized employees of the specific customers.The model strengthened Dells efficiencies- transaction and relationship.Dells key suppliers could access Dells internet portal- see the order flow and pipeline inventory of the components.

3 point- paperless purchase orders, pricing, real time order tracking, historyetc. Dell has more than 40,000 premier pages. Customers too can conduct commerce ovver e-commerce. Speak about MIS managers.12

CUSTOMER SERVICEService became a feature of Dells strategy in the year 1986.It provided free on site service for a year after the sale.Contracted with local service providers to handle customer requests and repairs.Technical support via the phone or the internet.

PRODUCT GROWTHPersonal Computers:Worlds No. 1 PC maker with largest share in the PC market

Workstations:In 2000, the market leader in the U.S. and in the world in terms of Windows NT workstations

Servers:It was segmented into high end servers, midrange servers, and entry-level servers.Entry level server : 2/3rd of its server sales

Storage: Shift from Direct Attach source to external storage.

ANALYSIS & SUGGESTIONSAnalysisEven during the slowdown, the company is going strong due to the business model, direct to sales approach, inventory management, CRM and so on.Even after the slowdown, continuing with these activities, Dell can sustain their value in the market and also have a strong relationship with the customers and the suppliers.

ANALYSIS & SUGGESTIONSSuggestionsInvest more in R&D.Maintain customer Use of inexpensive ways to connect with the market segment. For instance- the internet(growing during that time).

1st point: sales will be slow during slowdown but this will differentiate themselvers from the competitors. This will give them an edge even post the slowdown. They can invest more in R&D because of the direct model they can keep more of the profits.17

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