DELL COMPUTERS
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DELL COMPUTER DELL COMPUTER CORPORATIONCORPORATION
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IINTRODUCTIONNTRODUCTIONAs On January 2005, Dell Computer
Corporation Was The World's Largest Direct Selling Company.
57,600 Employees In More Than 80 Countries.
Customers In More Than 170 Countries.Market Leader – Persistent Focus On
Delivering The Best Possible Customer Experience.
Incorporated In 1984 By Michael Dell At The Age Of 20 With $1000.
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Conti…..Conti…..
Best understand customers’ needs and efficiently provide the most effective computing solution by selling them directly.
This business model eliminates the retailers.
It became no# 1 $100 billion company.
It became no#1 retailer of personal computers, outselling IBM and Hewlett-Packard.
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Conti…..Conti…..
Traditional business model of competitors:“Build- to- Stock.”
Retailers and other intermediaries takes long time to dispatch the computers.
In 1980, Michael Dell got the chance to reengineer the value chain of PC industry because of two reasons:
1) Corporate customers were becoming sophisticated and therefore didn’t required personal selling.
2) Mass Customization.
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Business Model Of Dell:
It outsourced all components but performed assembly.
Eliminated retailers and shipped the components directly from its factories to end –users.
Took orders from internet and phone.Designed integrated supply chain
linkage .
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Conti…..Conti…..
By October 2004, it increased its product line and started to sell large no. of consumer electronic goods like Digital music player, flat screen television to cameras and printers.
It adopts the strategy of direct sales in all its product.
In November 2004, 15% of Dell’s revenue came from consumer electronic goods.
It also moved to the business of servers and storage in 2005.
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Achievements of DellAchievements of Dell
Ranked as Most admired co. of America by Fortune in 2005.
Revenue growth @ 19% - 7% higher than industry.
Net margin of 6% - 5% in the industry.
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Que. 1 :-(A) What is Dell’s Strategy ?
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DELL CAN BEST UNDERSTAND CONSUMERS NEEDS EFFICIENTLY, PROVIDES THE MOST EFFECTIVE COMPUTING SOLUTIONS ,TO MEET THOSE NEEDS BY SELLING COMPUTER SYSTEMS DIRECTLY TO CUSTOMERS.
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(B) What is the basis on which Dell builds its competitive advantage ?
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ENVIRONMENTAL ANALYSIS
Competitors Customers Suppliers Regulatory Social/Political
INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how Distribution Know-
how Logistic Know-how
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IBM . HEWLETT-
PACKARD.(Through
Intermediaries)
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ENVIRONMENTAL
ANALYSIS
CompetitorsCustomersSuppliersRegulatorySocial/Political
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Customers in more than 170 countries.
They provides best experience to the customers through mass customization.
Increase the loyalty.
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ENVIRONMENTAL
ANALYSIS
CompetitorsCustomersSuppliersRegulatorySocial/Political
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Different suppliers for different peripherals.
Large no. of suppliers for other consumers electronics.
Very closely to its assembly factories.
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ENVIRONMENTAL
ANALYSIS
CompetitorsCustomersSuppliersRegulatorySocial/Political
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No regulatory hurdles.
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ENVIRONMENTAL
ANALYSIS
CompetitorsCustomersSuppliersRegulatorySocial/Political
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◦Best match of social/political issues in different countries.
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ENVIRONMENTAL
ANALYSIS
CompetitorsCustomersSuppliersRegulatorySocial/Political
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Best technology for order-taking through internet and phone according to consumers’ needs.
And also best technological communication with suppliers.
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INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how
Distribution Know-how
Logistic Know-how
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Outsourced all components but performed assembly.(Customization)
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INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how
Distribution Know-how
Logistic Know-how
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Direct Selling to customers.
Effective Advertisements.
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INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how
Distribution Know-how
Logistic Know-how
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Good supply chain policy.
Quick delivery to consumers according to their needs.
(Just need to assemble all the components)
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INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how
Distribution Know-how
Logistic Know-how
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Good logistic chain between suppliers to consumers.
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INTERNAL ANALYSIS
Technology Know-how
Manufacturing Know-how
Marketing Know-how
Distribution Know-how
Logistic Know-how
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Sophisticated customers having experience & Knowledge of computers.
Mass customization.
Direct selling by removing intermediaries.
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Best internal competencies : Technology Know-how Manufacturing Know-how Marketing Know-how Distribution Know-how Logistic Know-how
External Opportunities : Sophisticated customers having
experience & Knowledge of computers. Mass customization.
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DELL CAN BEST UNDERSTAND CONSUMERS NEEDS EFFICIENTLY, PROVIDES THE MOST EFFECTIVE COMPUTING SOLUTIONS TO MEET THOSE NEEDS BY SELLING COMPUTER SYSTEMS DIRECTLY TO CUSTOMERS.
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Que. 2 :-
How do Dell’s control systems help execute the firm’s strategy ?
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MANAGEMENT SYSTEMMANAGEMENT SYSTEM
Speed & pace at every step of business
Reduced number of workers in line.Buying & assembling components as
per need of customersevaluation is on two basis… A) Financial (ROIC, component purchasing
cost, selling & adm. cost
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B) non financial measures (inventory, receivable days, payable days, accuracy of demand forecast)
InformationLocalized decision makingImplementation of employees’ ideasQuick strategies implementation
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