Dell evolution Dell strategy past to present Daniel Spanier, Alexandra Bielková.
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Transcript of Dell evolution Dell strategy past to present Daniel Spanier, Alexandra Bielková.
Dell evolutionDell strategy past to present
Daniel Spanier, Alexandra Bielková
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About the Presenters
AlexandraBielková
Education:Masters in Maths & Mgmt, Comenius
University, 2002PhD in Mathematics, Comenius
University
Work experience Dell:Services FP&A managerWestern EMEA FP&AEMEA RUM Forecast CoordinatorOPEX controlling & consolidationEMEA Fin Systems Training Coordinator
DanielSpanier
Education:Bachelors of Economics and
International Management6 Sigma Green Belt Certified
Work experience Dell:Finance Director – EMEA FP&AController– EMEA Services Call CentersServices Globalization and Liberty LeadAmericas Support Services Team LeadWorldwide Operations - Manufacturing
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Agenda Dell strategy past to present• Strategy
• Dell direct model
• Dell.com
• Dell embracing the channel
• Strategy shift
• IT trends
• The new Dell business model
• Going private – change in strategy?1) http://techaisle.com/blog/2012/04/dell-confirms-its-position-as-an-end-to-end-solutions-company/ 2) http://www.forbes.com/sites/connieguglielmo/2013/10/30/you-wont-have-michael-dell-to-kick-around-anymore/
2)
1)
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What is Strategy?
“The determination of the basic long-term goals and the
objectives of an enterprise, and the adoption of courses of
action and the allocation of resources necessary for carrying out
these goals." Chandler, 1962, Strategy and Structures: Chapters in the History of the
Industrial Enterprise, MIT Press, Cambridge, Mass) 1)
However,
“You learn the most when you make mistakes. There is no such
thing as a perfect plan. Talk about what is not working and
move quickly to fix it as soon as you find it,”Michael Dell 2)
1) http://www.ifm.eng.cam.ac.uk/csp/summaries/ms.html2) http://en.community.dell.com/dell-blogs/direct2dell/b/direct2dell/archive/2011/11/10/michael-dell-opens-e-amp-y-strategic-growth-forum-2011-a-conversation-with-charlie-rose.aspx
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Strategy to execution
Information & Communication Flow
Vision Mission Values
Sales
FinanceMarketing &
Product Development
CustomerSupport
Fron
t O
ffice Back O
fficeIT
ELTStrategy ObjectiveChange Initiatives
Planning
HR
Manufacturing
DemandSupply
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Dell Direct
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PC’s in the Mid 1990’s…
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Dell direct model
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Build to order cost benefits
ConsistentSupply
Globally
Immediate Response to
Customer Needs
LowestCost Consistently
Customer Benefits
Time
Cost
Today
Customer Places Order
Dell Procures Components,
Assembles and Ships
Dell CostChannel
Inventory
3 Weeks
Ago
4 Weeks Ago
6 Weeks Ago
ComponentsPurchase
8 Weeks Ago
Cost to Competitors
Manufacturer's Inventory
ProductAssembly
Shipment to Distributor
Shipment to Reseller
Cost
advanta
ge
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Dell.com
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• 2001: Online technical staff moved into IT
• 2002-3: New content publishing system• 2003: Code re-written to .Net,
consolidation onto global code base• 2005: Widespread AJAX
implementation• 2009: Completed widespread
globalization• 2010+: Radically improve Customer
Experience
• 1994: Launched as internal tech support site
• 1996: Became commercial site with limited product set
• 1997: Reached $1M/day in revenue• 1999: 1st Content Publishing capability• 1999: Accounted for 50% of Dell
Revenue• 2000: Re-platform to VB and J++
Dell.com - a brief history
199619992001200320062007200820112012
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Dell online todayOnline:
Dell.com + Premier Pages + Global Portal + B2B
An online orderis placed
every4 seconds
34 supported languages
1.8M B2B transper year
124K Premier and Global Portal pages
25M visits on PP and GP pages per year
1B visits per year to
Dell.com
7.3 M online transper year, e-pen = 42.2%
11B online revenueper year
2B online marginper year
86% of trans are Client and SnP products
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Dell embracing the channel
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Group exercise & discussion:
Why did Dell enter the indirect business model?
• Direct contact with customers• Ability to provide customized
products (build-to-order)• No need to share margin
• High costs of demand generation (marketing, sales force, after sale support etc.)
• Higher transportation costs• Supply chain management and
cost• Customer has to wait for
product• Too complex for non expert
customers• No ability to see or touch
product if selling via net or phone
Direct model
• External sales force, marketing• Easier coverage of new / minor
markets (sales force, customer preferences, market restrictions etc.)
• No need to have too diverse product portfolio
• Ability to provide a solution or consultancy
• Customer can see or touch product
• Lack of contact with end user• Supply chain management• Risk that reseller will not know
the product portfolio well• Risk that reseller will prefer to
sell competitor’s products (on shelf placement etc.
• Need to share margin
Indirect model
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Dell approach – Global commercial channel
Level of cooperation
Registered Partners
• Entry program for most partners
• Grants access to Dell’s partner portal and customer support
• Access to trainings and certifications
Preferred Partners
• Assigned account manager
• Better return and payment conditions
• Requires Dell certifications and minimal revenue threshold
Premier Partners
• Highest level of support from Dell
• Requires two or more Dell certifications and higher revenue threshold than Preferred
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Dell approach
1984-2006
• Pioneered direct model• Extreme growth, 2003 No.1 in PC market• Indirect business not addressed specifically• Changes on IT market in 2005/6
June 2007
• “Direct model has been a revolution but it is not a religion” Michael Dell
2008 - 2013
• Expansion into Indirect (Channel) business• Global Commercial Channel• Consumer Retail• New Dell : E-Dell, BVS, Client Reinvention• BRIC countries
2013 - Now
• New Dell Business model• BYOD• Going private
Dell Strategy shift
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Dell strategy shift in 2011
• Dell’s strategy to develop its capability as an efficient technology solutions provider, grow faster than the industry in strategic areas and shift the company’s mix to higher-value products and solutions was outlined here today at the company’s annual stockholders meeting.
• During the meeting, Michael Dell, chairman and CEO, and Brian Gladden, chief financial officer, reviewed the company’s business progress and its competitively differentiated strategy to deliver solutions that are highly capable, affordable and flexible to meet the needs of large enterprises, public institutions, small and mid-size businesses.
• Mr. Dell described the company’s focus on next-generation computing solutions and intelligent data management; services, security and cloud; and end-user computing, which are critical to driving industry leadership and growing operating income and cash flow over time.
http://www.dell.com/learn/ie/en/iecorp1/secure/2011-0715-annualmtg-release
Next generation
computing solutions and
intelligent data
management
Services,
Security,
Cloud
End-user
computing
Create
Open
Capable
Affordable
Key designtenets
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Manage
Deliver
Dell’s leadership in the virtual era
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High qualitySolutions
Customers
Cloud
Reliable
TabletsTrustworthy
Efficient
Thought leader
Virtualization
Technology
Best customer service
Services Infrastructure
Data center Enterprise
Innovative
Outcomes
Mobility
SmartphonesPCs
Meets my needs
IT leader
Future
Dell customer perception evolving…
ComputersPC providerLaptops
Desktops
customization
Cheap
Quality
Bad service
Followers GreatAffordable
Dude
Poor quality
Home
Old Good
InnovationGood
Inexpensive
ServiceServices
Crap
Reliable
OK
Value
Followers Low quality
Manufacturer
Services
Present
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Dell reflecting current IT trends
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Major IT trends
Global industry trends• BRIC country IT market growth• Consumerization of IT – change of traditional work/life
patterns
Rise of Smartphones, Tablets, Ultra-books and Cloud
Services
Rapidly increasing storage requirements, services
instead of in-house solutions
Consumer
•Ubiquitous computing•Always On connectivity•Anywhere Anytime mobility
Enterprise
•Mobility•Increasing IT Complexity•Cloud Computing•Large Data Analytics
25 Confidential
New Dell Business Model
Confidential26
New Dell Business Model
What:• Introduced in 2013• Pre-set desktops / laptops for consumer, small businesses• Limited configurations for larger customer• Unique configurations available for very large deals
Why:• Lower cost• Quicker delivery• Usually customer doesn’t need that many options
27 Confidential
Dell –the largest start-up
28 Confidential
Discussion:Does Dell need to change its strategy after going private?
Dell – the largest start-up
• http://www.dell.com/learn/us/en/19/videos~en/documents~from-year-one.aspx
• This transaction positions Dell to enter an exciting new chapter, continuing the execution of its long-term strategy and focusing on delivering best-in-class solutions to customers as a private enterprise. Under a new private ownership structure, Dell will be even more flexible and entrepreneurial, allowing it to do what it does best — to serve our customers with a single-minded purpose and drive the innovations that will help them achieve their goals.
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Key takeaways
• Dell has adapted its strategy to better serve customers several times throughout its history
• Examples presented in this session include:– the Direct Model on which the company was founded
– Leadership and pioneering in E-Commerce (Dell.com)
– Embracing the channel – revisiting the direct model
– Strategic shift of Dell transformation into an end-to-end solutions provider
– Dell New Business model
• Dell being private – strategy change needed?
Thank You
Backup
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How does Michael Dell describe the Dell evolution?• http://www.youtube.com/watch?v=N3VOR31Hrn4
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Dell’s commitment to customers
• http://www.youtube.com/watch?v=-5-3t4RAaio