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Matching DELL Case
Matching DELL Case
Matching DELL Case
5/23/12
Not PowerFierce Competi ful Bartion gaining (IBM, Compaq, HP, Power of Gateway) Suppliers
Many H/W components companies Basic 5/23/12 Assem
Attractive !
No Substitutes
Declined PC prices (numerous global manufacturers) - Housing, keyboard, monitor, modem, etc. - Microprocessor (Intel, 80~90%) Sub-$1,000 market by AMD (50%) Soft Ware Bundled PC - Operating system : Windows - Application s/w : office productivity applications Large & midsize businesses, governments C. Customers - MIS Dept. (highly knowledgeable staffs) U.S. PC Sales (97) Small business and offices - Lacked MIS staffs (reliability, performance, brand, etc.) Individual consumers - Independent org. such as Consumer Reports Sensitive to price and brand name Educational institutions (3~6%)
B. Products
5/23/12
E. Manufacturing
F. Marketing
Apple, HP, IBM - 2~3% of sales on advertising - 25,000 sales staffs of IBM White-box PCs - No AD. & nonexistent sales forces North America 23%, Europe & Asia 50%, China 90%
5/23/12
3. What were the key success factors for Dells success ? (1)
6 KSFs
5/23/12
3. What were the key success factors for Dells success ? (2)
A. Sales marketing
Direct order from customers Finer classification of buyers - Relationship buyers (repeated orders) Large companies, institutions Outside rep. and Inside rep. Relationship buyers : Premier Pages - Transaction buyers (publications, catalog, etc.) S&M sized businesses, Home (the educated) Transaction buyers : www.dell.com
B. Production
Tailored to customer needs - Based on actual orders No finished goods inventory Production process : a day and a half Just-in-time delivery of parts Co-location : Suppliers, Production, Assembly, etc.
5/23/12
3. What were the key success factors for Dells success ? (3)
C. Products
Two lines of desktop computer and notebook After sales service - 50,000 pages of customer support info., - 1,300 rep. hot-line, problem solving over the phone - Out-sourcing for on-site visit - Service providers
- Inventory days receivables, payables - Margins, selling price, overhead Customer, product, country segment FY 1998 ROI 186%
5/23/12
5/23/12