Dell's computer Presentation NOV. 09 Arvind Kumar
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Transcript of Dell's computer Presentation NOV. 09 Arvind Kumar
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DELL VISION STATEMENT
According to MICHAEL DELL :-
y Its the way we do business. It's the way we interact withthe community. It's the way we interpret the worldaround us-- our customers needs, the future oftechnology, and the global business climate. Whatever
changes the future may bring our vision -- Dell Vision-- will be our guiding force.
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DELL MISSION
y Dell's mission is to be the most successful ComputerCompany in the world at delivering the best customerexperience in markets we serve. In doing so, Dell will meet
customer expectations of:1. Highest quality
2. Leading technology
3. Competitive pricing
4. Individual and company accountability5. Best-in-class service and support
6. Flexible customization capability
7. Superior...
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COMPANY DESCRIPTIONy Dell Computer Corporation, incorporated in October 1987, is a
computer systems company and a provider of computing productsand services.
y
The Company's primary product offerings include enterprisesystems, notebook computers and desktop computer systems. TheDell line of high-performance computer systems includes PowerEdge servers, Powernap server appliances, Power Vault storageproducts, Power Connect networking products, Dell Precision
workstations, Latitude and Inspiron notebook computers, andOptiPlex, Dimension and Smart step desktop computers.
y The Company also markets and sells Dell/EMC storage productsunder a long-term strategic relationship with EMC Corporation.
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y The Company provides targeted services forconsulting, deployment and support, as well as anextensive selection of peripheral hardware, includinghand-held products, and computing software.
y The Company conducts operations worldwidethrough wholly owned subsidiaries. Sales outside theUnited States accounted for approximately 35% of theCompany's revenues during the fiscal year ended
February 1, 2002 (fiscal 2002).
y Two types of customers: Relationship andTransactional
(cont.):
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REVOLUTIONIZED INDUSTRY
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y
1980 purchased first computer and takes it aparty 1984 Registers Dell Computer Corporation
y 1987 International subsidiary in UK
y 1988 Initial IPO $30 million
y 1989 Accumulates excess inventory
y 1990 First to sell through retail Computer USA, Best
buy, wal-mart
1994 Launches latitude note book setting new on
battery life
1996 introduce power edge server for small and medium
server market
1998 solidifies internet market $ 12 million per day from
customer. Setup supplier network
(cont.):
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BUSINESS STRATEGIES
1. Lower cost: avoid dealers markup and pass the saving tocustomer
2. Customized system: customers get exactly what they wants.
3. Lower inventory: 4 days of supply in inventory, and ability to
4. incorporate the latest technologies into products
5. Save time: takes only 36 hours to manufacture
6. Easy for customers to order: either log onwww.dell.com .
7. Aggressive pricing strategy to maximize market share9
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EXICUTIVE SUMMARYy Original Purchase: 500 shares @ $55.75 on 12th march
09
y Sales growth rate from previous 5 years: 32.61%
y Dell stock is fairly priced, if not slightly overvalued.However, the Company keeps grabbing market shares,and the quarterly numbers continue to improve. Also,
its financial strength has been excellent
y Bottom Line: A great company richly priced. Its worthholding but look somewhere else for better return.
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QUARTERLY INCOME STATEMENTDOLLARS IN MILLIONS
(EXPECT PER SHARE 2/1/09 8/2/09 11/2/09 5/3/09VALUE)
TATAL REVENUE 7468 8061 8066 8459 9144
GROSS PROFIT 1313 1416 1391 1515 1662
OPERATING INCOME 544 594 590 677 758
NET INCOME 429 456 457 501 561
BASIC NORMALIZED 0.164 0.175 0.176 0.194 0.217
EPS
DILUTED NORMALIZED 0.157 0.17 0.171 0.189 0.213
EPS
11/2/08
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Competitorsin PC Industry
DELL
25%
COMPAQ
13%HP
9%GATEWAY
7%
IBM
6%
OTHERS
40 %
U. . PCmarket hareTOP FIVE PLAYERS:1. Dell2. Compaq3. HP
4. Gateway5. IBM
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Competitorsin PC Industry (cont.):
WORLD WIDE TOP 5 PLAYERSWORLD WIDE TOP 5 PLAYERS
COMPANY SHIPMENT(MILLIONS)
MARKET SHARE GROWTH FROM3Q 2009
DELL
COMPAQ
IBM
HP
NEC
OTHERS
9.23
7.23
5.18
3.00
2.95
18.17
13.8%
10.4%
6.6%
6.4%
3.4%
59.4%
10.8%
-31.1%
-17.2%
-24.6%
-27.5%
-7.8%
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Competitorsin PC Industry(cont.):
DELL
NE
E
Worl w P r h r
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WORLDWIDE PC MARKET SHARE
1. HP
2. DELL
3. ACER
4. LENOVO
5. TOSHIBA
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WORLDWIDE SEQUENTIAL MARKET SHARE
1. HP
2. DELL
3. ACER
4. LENOVO
5. TOSHIBA
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US PC
MARK
ET SHAR
E
1. DELL
2. HP
3. GETEWAY
4. TOSHIBA
5. APPLE
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US SEQUENTIAL MARKET SHARE
1. DELL
2. HP
3. GETEWAY
4. TOSHIBA
5. APPLE
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DELLWW FINANCIAL PERFORMANCE
$
Liquidity Generated
$1.1B in Cash
fromOperations $11.9B in Cash
andInvestments*
Profitability Gross margin = 18.2% Revenue = 9.6%*
Growth Units +25% Y/Y Share
Gain+26% WW
Revenue$11.5B*
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DELLWORLDWIDE PRODUCT PERFORMANCE
DESKTOP
Dell # 1
19.4 share
DESKTOP
Dell # 1
19.4 share
OTE OOK
Dell #2
1 .1 share
OTE OOK
Dell #2
1 .1 share
SERVERS Dell #2
23.2 share
( 1 in US, 31.8 share)
SERVERS Dell #2
23.2 share
( 1 in US, 31.8 share)
PersonalWorkstationsPersonalWorkstations
Dell #1
49.8 share
Dell #1
49.8 share
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DELL MARKET STRATEGY
y If customer demand changes, ask WHY?Challenge them to understand why?(understand the underlying economics from thestandpoint of capital, supply chain, technology,
market trends).y Dont perfume the pig: Dont make something
appear better than it is.
y If you accept status quo as good enough, you are
managing in the rear view mirror.
y If we have a problem we have to fix it. We know ifwe dont, someone else will.
y Elevate a win to company wide accomplishment21
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DELL: A BUILD-TO-ORDER PC SUPPLY
CHAINy KEY PLAYERS IN THE PC SUPPLY CHAIN:-
y
Component Manufacturers :-The suppliers of high-tech components, such asmicroprocessors
y Distributors :-
They generally supply to corporate resellers and otherdistributors.
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y Corporate resellers :-
The corporate resellers or systems integrators
generally buy systems directly from manufacturersand install these systems at their corporate clients.
y Retailers :-
These are essentially the stores that sellcomputers to the end users. The end users arehome or small office users
DELL: A BUILD-TO-ORDER PC SUPPLY
CHAIN
(cont.):
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DELL INSPIRON
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WOULD YOU LIKE TO BE THE BRAND
MANAGER FOR THIS BRAND ?
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WHY ?y Me as a brand manager of dell :-
y I think there are also lessons for establishedbusinesses in Brand new in terms of the ability totranslate a single person's creativity into ascalable capability and into powerful demand-
side connections with consumers.
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Thank you
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