Direct model

Dell in India

Case Contents

  1. Introduction
  2. Manufacturing – The first Dell ‘Made in India’ desktop
  3. Dell’s Market Share in India
  4. The Indian consumer and Local competition in India
  5. DELL – Key Facts about the company
  6. Dell – Company Overview
  7. Dell – Business Segment Information
  8. Dell Products and Services
  9. Dell’s new retail strategy and Direct-only model
  10. Dell’s New Marketing Strategy in India
  11. Dell’s New Advertising Campaign for SMBs
  12. Testimonial Advertising instead of Transactional
  13. Dell’s CSR, Green Initiatives in India
  14. Questions for discussion
  15. Bibliography

     

Sample Page

“India is a great place to be in. It is growing faster than China for us.”
“We’re in 180 countries and I don’t track all of them because that can make you a bit dizzy. But I do follow our top 10 markets. India is in the top 10. In fact, it’s the fastest growing market of our top 10, ahead of everybody, including China. There are plenty of opportunities in India and we couldn’t be more excited.”
–Michael Dell in 2010

‘‘We’re very strong in the large enterprise segment, but over the next three years, we’ll also focus on consumers and small and medium (Indian PC market growing faster than China: Michael Dell news, 2010) businesses. That’s where we see a big part of the next billion dollars in India coming from.”
– Sameer Garde, India country manager in 2010

Introduction

Dell’s presence in India is no surprise. India is one of the most important emerging markets in the world. For years, selling PCs in Asia largely meant China . However, PC makers have recognized the importance of the giant Indian market , its booming economy and annual growth at more than 9%.

Dell started in India about seven or eight years back by opening a customer contact center at Bangalore in 2001. In 2003, the second contact center opened at Hyderabad. The company operates its services from four centers based at Bangalore, Hyderabad, Chandigarh and Gurgaon. Dell started in Bangalore providing customer support to English speaking countries and later also began providing technical support, procurement of financial back office and Knowledge process outsourcing. After the U.S., Dell India is the second biggest center with 23,000 employees. The strategic importance of India to Dell is evident from the fact that India was one among three locations (the other two being US and UK) where Dell’s Latitude E series and Precision notebooks were launched. In India, Dell already has a 23,000-strong workforce in about 10 years of operations and business from India is closing in on the $1 billion mark. Dell has nearly 13 per cent share of the Indian market.

Case Updates/Snippets

  • Dell’s channel strategy is to make technology more available to small and medium businesses (SMBs). Dell’s channel partners contribute 22% to its total revenue globally. Out of 10 million SMB customers across the globe, Dell caters to 12,000 SMB customers in India. As per estimates, SMB market in India has over 7 to 13 million customers. Among the BRIC countries and U.S., India is ranked second for the number of SMBs.
  • Stiff competion between Dell and HP in the Indian PC market: According to IDC, since 2005, HP has held the number one position in the Indian PC market every quarter (for the past six years). However, in the second quarter (April-June, 2010), Dell replaced HP for the first time with a 15.2 percent share. HP followed at 14.3 percent and Acer at 11.5 percent, though HP still led in the desktop segment. Dell was helped by strong marketing and its channel partners base while HP was disrupted by its move from a national distribution model to a network of regional distributors.
  • PC Market in India:In 2009, 75 lakh PCs were sold. In 2010, the expected PC sales are 90 lakh. For the first six months ended June 2010, sales totaled about 45 lakh. [Note: 10 lakh=1 million, PCs include desktops and notebooks.]
  • Premium Phone Support service: In July 2012, Dell announced Premium Phone Support service. The 24×7 phone, chat, and e-mail support service is for its consumer line of products. The service is unique as it caters to both hardware and software.
  • Channel Initiatives in India:Since the beginning of 2013, Dell has taken initiatives like launching the Dell’s Engineer’s Club (train channel partners), Enterprise Master Tool (to close deals faster) and the Partner Advisory Council (to augment sales). These initiatives are launched to support its channel partners in India. Dell has more than 2,000 partners in its Global Commercial Channel (GCC) partner program in India.

Michael Dell – Leadership Case study

Case contents

  1. Introduction
  2. A Direct Approach
  3. Dell’s Leadership Style
  4. No excuses – quick and effective decisions
  5. First step in a marathon – No victory laps
  6. Watch each dime and turn it into at least a quarter
  7. Every product should be profitable from Day One
  8. Direct To Customer Service
  9. Two-in-a-box Management
  10. DELL Company Overview and Time-line
  11. Dell Products and Services
  12. DELL – Key Facts about the company
  13. Michael Dell – Personal Profile and Achievements
  14. Michael Dell – Entrepreneurship Skills – Early Years
  15. Quotes by Michael Dell
  16. Questions for discussion
  17. Bibliography
  18. Exhibit 1 – Managing the Dell Way
  19. Exhibit 2 – Five key strategies in Dell’s Direct Model
  20. Exhibit 3 – Dell Inc. – Historical Income Statement
  21. Exhibit 4 – Dell Inc. – Historical Stock Chart

     

Sample Page

“There are a lot of things that go into creating success. I don’t like to do just the things I like to do. I like to do things that cause the company to succeed. I don’t spend a lot of time doing my favorite activities.”

“What matters is our future plan of action. We are systematically moving to increase efficiencies, improve execution and transform the company.“-Michael Dell, CEO Dell Inc.

Introduction

DELL Inc., based in Round Rock, Texas, was a company remarkable at balancing growth and profitability since its inception. DELL’s direct-sales business model had worked incredibly well over the years. However, towards the end of the decade (2000-10), the company’s struggles over pricing and profitability contrasted with market leaders, Hewlett-Packard (HP) and Acer . In recent years, DELL’s PC-sales growth lagged behind those of its competitors. DELL’s rivals were able to better take advantage of demand from consumers. DELL was struggling with dismal earnings and a fast eroding market share.

In 2007, Michael Dell (Dell) returned to revive the company he had started in his college dormitory. Majority of the analysts praised the idea of Dell’s return as CEO without a clue about what it is that he would actually do to turnaround the company. In the past, DELL Inc. was recognized as one of the best-managed companies in technology and under Dell’s leadership had transformed itself from a no-name PC player into a powerhouse brand. Michael Dell’s value to the company can be gauged from the fact that, in 2008, the company spent $1,164,625 on personal and residential security.

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Dell’s Supply Chain Management Strategy

     

Case Study Contents

  1. Introduction
  2. Dell – Company Overview
  3. Dell Products and Services
  4. Dell – Key Facts – Key Employees, Top Competitors, Revenues, Manufacturing Facilities
  5. Dell Timeline
  6. Dell – Business Segment Information
  7. Dell’s Evolving Supply Chain Strategy
  8. Typical Working of Dell’s Supply Chain
  9. Five key strategies in Dell’s successful Direct Model
  10. A supply chain with old technology is of little value
  11. Restructuring at Dell
  12. New Distribution Channels – Direct Model and Retail Strategy
  13. Integrating the Supply Chain
  14. Related Reading
  15. View sample pages of this case study

Case Study Abstract

The focus of this case study is the supply chain management practices of Dell. Dell has been following its unique ‘direct build-to-order’ sales model for more than 20 years. Customers can plan their own configuration and place orders directly with the company via the phone or its Web site. Over the years, Dell’s supply chain efficiencies and direct sales gave it a competitive advantage.

Can Dell regain its market leader position from HP?

In 2006 however, Dell faced several problems. Many customers complained about long delays in supplies. Recall of Sony battery cells in its laptops brought undesirable media hype to the company. Increasing discontent of customers led to a slowdown in sales. Consequently, Dell lost its market leadership to Hewlett-Packard Co. (HP). Industry analysts felt that, with Dell’s competitors also improving their supply chains and matching Dell’s direct model, the company had been losing its competitive edge. Dell will have to bear additional costs with its foray into retail distribution thereby minimizing its cost advantage. Besides, profit margins of Dell will drop further since it will have to offer incentives to compete with HP in retail stores. Though Dell spruced up its product design and range but Apple is clearly far ahead of it. Many experts feel that such new initiatives will only distract Dell from its supply chain operations.

This case study covers the following issues:

  • Examine and analyze Dell’s Direct model, its basic working, success and future challenges
  • Typical Working of Dell’s Supply Chain and future supply chain challenges
  • Highlights Dell’s evolving Supply Chain practices and strategy and steps being taken by it to recapture its lost market leader position
Case Study Keywords: Dell, Direct model, Supply Chain Management, Supply Chain Strategies, Build-to-order model, Inventory optimization, PC Manufacturing, Retail Distribution Channel, HP, Notebook computers, Desktop personal computers, Competitive Business Strategies, Sustaining competitive advantage, Michael Dell, Distribution Strategy, Supply Chain Case Study

Case Snippets/Update
US and Worldwide market share of top PC makers in Q1 2009
Dell’s market share in U.S. and Worldwide (in Q1 2009) compared to other top PC makers

  • In year 2010, PC sales are expected to rise 12.6 percent, according to research firm Gartner.