Name : Pankaj Kumar

Roll No. PGP14036 , Section A

Assignment #3 : Product Development at Dell Computer Corporation
Q1. What competitive forces are shaping the computer Industry in year 1993 ?
Ans. 1: By the year 1993 , due to technological advancement of storage capacity , software
,interfaces & increasing competition due to entry of new manufacturer and distributors cost was
driven down drastically and thus it led to increase in demand due to this personal computers
sold faster than video cassette recorder and almost as fast as TVs . The emergence of
Portable & Laptops computer were increasing whose development was relied on several
technological breakthrough and first access to these technologies gave an competitive edge to
the companies , the advance technological components are Flat Liquid crystal displays
screens , compact hard drive disks that consume less energy , improved battery technology ,
Further Company Dell investigated customer priority and market requirement and came up with
following important forces which were found shaping the portable computer industries and
consumer purchase behavior dependency :
1.
2.
3.
4.
5.
6.
7.

Low Cost -54%

Microprocessor -35%
Battery Life -27%
Screen Resolution -15%
Reliability -11%
Weight -9%
Others -13%

Thus the development of Portable computers & laptops in computer industry was playing as the
major competitive force in shaping computer industry as customer started seeking for these
devices .
Q2. What has been the fate of Dell prior to and in 1993 ?

Its financial situation

Its Customer base
Its product quality
Its product development process

Ans.2:

Financial situation

Prior to 1993 : The Net sales of Dell was contributed by 2 products only i.e. Desktops &
Laptops , and they were continuously increasing their sales by capturing high Desktop markets
by 1992 their sales reached to $2014 Million , with gross profit of $469Million
1993 : The rate of increase of sales dropped because Dell stumbles they violated their earlier
established business model and tried in retail , due to which inventory control became difficult

for Dell and added to this there first line of portables also discontinued , its profits also slashed
to $10Million

Its Customer base

Prior to 1993 : The dell was more into Desktop selling business till the development of Portable
Laptops , and supplied to customers like Oil companies & government agencies and it matched
needs of his customer i.e. quality & reasonable price , they were also providing 24hr complaint
hotline and high quality service also supported Dell to win many customer and grow quickly .
1993 : Due to cash crunch and failure to cope up with providing portable devices they loose
many customer and they also faced tough competition due to price reduction offered by
competitors , apart from this Dell notebooks also faced tough competition because their product
was based on old 386 series microprocessor , whereas rivals offered 486-based microprocessor
.

Its product quality

Prior to 1993 : Dell was successful to assure product quality by extensively pre-testing all the
configurations options , it was also supported by 24hr telephone support system , In addition to
this also build strong relationship with their suppliers and they effectively became their partners
and they lasted this partnership with suppliers as long as they maintained their leadership in
technology and quality .
1993 : Early in 1993 ,in what was shaping into companys annus horribilis due to decrease on
profit company also faced major qualities issue with their portable devices as the machines
were returned due to it was noted for smoke or melt spots on the plastic housing , the
investigating engineers found a weakness in electronic circuitry component by October 1993
dell recalled 17000 notebooks

Its product development process

Prior to 1993 : Their product Development process remained an informal process run by
autonomous team and it was centered around experienced developers , while such approach
delivered successful products , the results were neither consistent nor predictable , risk were not
assessed , Design products were frequently thrown for manufacturing and thus it failed to
deliver the required quality .
1993 : With the inputs from academic consultant and failure of investment make dell senior
management realized the need for structured approach for rapid product development cycles in
computer industry , in 1993 dell management organized product development team around core
teams of development professionals from several different functions , they started reviewing
process every 3months , in which development work was reviewed , technical and market risks
was assessed the new process includes following phases , Profile phases , planning phase ,
Implementation phase , qualification phase , launch phase , acceptance phase .

Q3. Why Dell senior management introduce 18month development process? What are
they trying to change or improve?
Ans. 3 : Dell senior management introduce 18 months development process because of
following problems in earlier process .
1. The result of development were neither consistent nor predictable .
2. The risk were not assessed rigorously in making project investment decisions .
3. Project execution experienced enormous variability depending on project leader in
charge .
4. It was found that in many cases team members didnt share the same vision .
5. Quality issues were addressed very late in development process .
The 18 months planned also covered detailed activities of each process of development of new
product such as , Profile phases , planning phase , Implementation phase , qualification phase ,
launch phase , acceptance phase .
Due to above reason Senior management realized that structured approach is necessary to
adapt to the increasingly rapid product development cycles in the computer industry.
They were trying to improve and reorganize product development around core teams of
development professionals , establish frequent contacts with different core teams and frequent
reviews need to be done to avoid pitfalls of previous era , process of funding a project based
on rigorous risk assessment of market .
Q4. Which Battery option should Hollidays team select?

Stay with proven Ni Hi Battery technology

Technology developed by Sony (LioN)
Differ until the qualification phase

Ans.4 : Holliday should choose 3rd Battery option because ,Option 3 Defer commitment to either
battery. Under this option both plans are considered i.e. to "overdesign" the battery space &
secondly involved maintaining dual designs for the laptop one for the existing battery
technology and another for the new LiOn technology.
Based on the decision tree analysis, which provides a cost/risk based preferred solution, option
3 is the preferred plan of action because it illustrates the advantage of the "no risk" approach. It
has not considered value of beating the competition to the market with a unique product of LiON
Battery technology ,which may play a major role in penetrating into a market ,the decision tree
analysis also has not considered the opportunity cost of taking resources away from other
projects. So in order to minimize risk and also seek for competitive advantage in parallel,
options 3 seems to be preferred.
If the opportunity cost of taking additional resources away from other product developments is
considered to be $100M or more, then option 1 would be the preferred choice. .