Group A9 Coman Fullard Alexius Freund Raman Karol Dhirapat Kulophas Adriano Prates Marcus Wyss DELL...
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Transcript of Group A9 Coman Fullard Alexius Freund Raman Karol Dhirapat Kulophas Adriano Prates Marcus Wyss DELL...
Group A9
Coman FullardAlexius FreundRaman Karol
Dhirapat KulophasAdriano Prates Marcus Wyss
DELL
Strategic Management 30-03-2004
Introduction
CEO: Michael DellTeenage EntrepreneurCollege DropoutMulti-Millionaire
World’s Number 1 PC maker
Direct Sales Model
Standards based designs
Corporate Darwinism
Almost no R&D
JIT manufacturing
Cost conscious
Products & Services
EnterpriseServers
Workstations Peripherals
Laptops &Notebooks
NetworkingProducts
DesktopSystems
•Managed Services
•Professional Services (consulting)
•Deployment
•Technical Support / Warranty
•Training / Certification
GOLDGOLD
SILVERSILVER
The Industry
Potential Entrants
Rivalry Within Industry
Substitutes
BuyersSuppliers
•Economies of scale•High Capital investment•Low Product Differentiation
•Absolute Cost Advantage
•Concentrated Supplier Market
•Few Suppliers / Key Components
•Important inputs
•Concentrated Market•High global growth rate•Low Differentiation
•High Bargaining Power•Access to Information•Low Switching Costs
?
Business Model
Suppliers PC Makers Distrib. Resellers Customer
Suppliers DELL Customer
Traditional Model:
DELL Direct Model:
The 4 P’s
Product
•Build-to-order•Mass Customisation•Segmented service levels•High quality/cost effective
Price
•Lowest-cost producer•Changes Daily•Flexibility•Essentially self-financing
Place
•Fast, efficient distribution•Internet, phone, catalogue based sales
•Distributors in some markets
Promotion
•Relationship business•SME: direct mail/online•Consumer: editorials, word-of-mouth, print advertising
SWOT - I
Strengths Weaknesses
• Unique Business Model
• Mass Customization
• Customer Contact
• Customer Loyalty
• Unique Management Style
• Standards Based Technology
• Limitations of Business Model
• Over-reliance on CEO
• Thrift
• Low Corporate Morale
• No R&D
SWOT - II
Opportunities Threats
• Product Extension
• Splintered US Market
• International Expansion
• Vast Customer Base
• Increased service based opportunities
• Replication of business model by competitors
• Limitations of suppliers
• Decreasing profitability of the market
• Low morale talent flees
Recommendations
• Grow the US consumer business
• International expansion
• Leverage current corporate customers to enter developing markets.
• Grow the European business by targeting the corporate segment.
• Explore domestic acquisition possibilities
• Expand the expert services offered
• Move in to the mid level servers.
• Maintain “Corporate Darwinism” & continuous improvement approach to operations.
• Nurture Company morale to retain talent
brand building aggressive pricing strategies
cooperation with the local players
Update
• 2001: Internal survey reveals very poor worker morale
• Enter Mobile phone market but fail & exit
• Expand storage offering with EMC
• 2002: Enter printer business
• 2003: Enter consumer electronics
• Revenue reaches $35 billion
• Net Earnings of $2.12 billion
• 15% of market
• 2004: Agreement with Fuji-Xerox
• Michael Dell resigns but leaves vision intact
The Tao of Michael Dell
• Hire ahead of the curve
• Segment the CEO
• Build a company of owners
• Stay allergic to hierarchy
• Mobilise people around a single business goal
• Develop products from the customers viewpoint
• Target a customer of one
• Add value “beyond the box”
• Align complementary strengths for success
• Flip the demand/supply equation
• Play judo with the competition