DELL, Inc.

Prepared by: Rovshan

Effects by: Ismayil
Addition informations by: Vüsale
Speechs by: Rauf
Group Leader: Alizade
 COMPANY HISTORY
 1984
At the age of 19 with $ 1,000 in start up capital Micheal Dell founded Dell
Computer with simple vision and business concept – that Personal computer
could built to order and sold directly to customer.
He believed that:
1. Bypassing distributors and retail dealers eliminated the markups of
reseller.
2. Building to order greatly reduced the costs and risks associated with
carrying large stock of parts, components and finished goods.
 1985
Dell build and design the first computer system.
 1988
Dell had raised $ 30 Million in it’s IPO. At this time his capital is $ 85 Million.
 1996
Dell goes online; $1 million per day in online sales
 1998
Dell had a 12% share of PC market in US and became one of market leader in
computer business with Compaq and IBM until now.
 Company Tour
• Overview We Make Computing Easy.
Like it should be

• Focus Our Direct Connection

• Leadership Why We’re the Industry Leader

– Our Product & Service

• Result We Know Enterprise

Computing Firsthand

We’re Close to Customers

• Global
Around the World
WHAT IS DELL & WHAT
WE DO?
Premier provider of product and services
Introducing new technologies with the help of
leading companies
Most preferred computer system
Our simple concept
Best understanding of customer needs
Our direct business model
Introducing latest technologies
 MISSION & VISION
 MISSION
“we make computing easy like it should be”

 VISION
“our persistent focus on delivering the
best possible customer experience by directly
selling our services based on industry standard
technology”
 DELL`S GOAL
“While our primary goal is to build on our position
as one of the world’s most admired companies,
we also want to foster a great internal culture. As
we learned…you can’t have one without the
other.”

Elizabeth Heller Allen,

Vice President of
Corporate Culture, Dell
 OBJECTIVES
1. Modify laptop designs according to student’s
preferences.
2. Double laptop sales in student market.
3. Increase revenues by 25% by the end of the
second year of
launching.
4. Develop a promotional campaign to promote the
modified
laptops.
5. Increase awareness of the existent agency
project objective
research strategic plan conclusion.
 Three golden rules at
Dell
• `Disdain inventory'

• `Listen to the customer'

• `Never sell indirect'

 DELL BUSINESS PLAN
Goals
• Competition
• History
• Resources Objectives
• Ability to change
• Ambitions
Priorities

BUSINESS PLAN

• Sales and marketing plan

• Production plan
• Finance plan
• human resources plan
• Information system plan
Its products and services
• The company offers a broad range of products
and services:
• Mobility products;
• Desktop PCs;
• Software and peripherals;
• Servers and networking;
• Services;
• Storage.
 Mobility (Notebook
computers
•
Mobile workstations)
The XPS™ and Alienware™ lines of notebook
computers are targeted at customers seeking the best
experiences and designs.
• The new models of The Inspiron™,Latitude™
Vostro™lines of notebook computers added to the
portfolio of the company in Fiscal 2009 satisfies the
customers needs.
• The Dell precision™line of mobile workstations is
intended for professional users who demand
exceptional performance to run sophisticated
aplications
 Desktop PCs
• XPS™ Alienware™ lines of desktop
computers disigned by the company
differs with its multimedia capability to the
highest gaming performance
• The OptiPlex™ computers is disigned for
business goverment and intitutional
customers
Software and peripherals
• The company offers Dell branded printers
and displays and a multimode of
competitively priced third-party peripheral
products including software titles scanners
televisions, notebook accessories, digital
cameras, printers, networking and wireless
products, power adapters and other
products
 Servers and networking
• The company presents the affordable
performance, reliability, scalability by its
PowerEdge™ and PowerConnect™ line of
servers
• The Dell expects to refresh its server and
networking product portfolio in fiscal 2010
 Services
• The services business of the Dell offers a
broad range of IT services:
• Infrastructure Consulting Services
• Deployment services
• Asset Recovery and Recycling Services
• Training Services
• Support services
• Managed services
 Storage
• The Dell offers a comprehensive portfolio
of advanced storage solutions , including
storage area networks, network-attached
storage, direct-attached storage, disc and
type backup systems, and removable disc
backup.
• Its storage systems are easy to deploy
,manage and maintain.
 Dell’s Competitive
Advantage
• Dell’s Direct Business Model

• Commitment to Open Standards

• Order Velocity/Build to Order

• Supply Chain Optimisation

• Continuous Process Improvement

 Dell’s Direct Approach:
A Fundamentally Different
Model
Dell Direct Model

Suppliers Customers

Ownership of the value chain

Competitor Model
Suppliers Outsourcing Competitor Channel
Channel Customers

Loss of control over product &

information flow & customer relationships
DELL DİRECT Model
 Direct Business Model
Direct Model

Suppliers Customers

• Continuity of Supply • Best Customer Experience • Product Quality

• E-business • Low Cost Efficiency & • Price for
Collaboration Highest Quality Performance
• Technology Leaders • Partnering/Virtual • Customization
• Low-cost Integration • Reliability, Service
Manufacturers and Support
• Latest Technology
 Benefits of Dell Direct
Model
• Better understand customer needs
• Customers receive exactly what they want: not
standard solution
• Minimized inventory
• New technology delivered immediately
 The Benefits of Low
Inventory
With 90+ Day’s Manufacturer
and Reseller Inventory, Channel
120 Manufacturer Buys Here

115
Relative
Component 110 10-12% Cost
Cost
105
Advantage
With 3 Days
100 Inventory,
Dell Buys Here
95
Typical
90
Dell
4

-4

-2

0
-8

-6
-1

-1

-1

Weeks Relative to Delivery

 Lean Inventory Model
Results: 3 days of inventory - Inventory turns of 122 per year

Suppliers

Logistics Hubs Dell Factory Delivery

Local Suppliers

Customer
Supplier Owned Dell Owned
How the Model drives Market
Share
Pass cost Industry's most
savings on Efficient
efficient
procurement,
to customer Model with lowest manufacturing
Cost Structure and distribution
process

Improved
Competitive
Pricing Customer Help
Drive
Experience Supplier
Business

Drives Lower cost

Competitive Market drives
pricing Share Increased
ignites demand
demand
 Open Innovation And Effective
R&D
Dell spends little on product research and development —
$440 million a year, vs. $4 billion a year at Hewlett-Packard.

The traditional approach to innovation tends to produce proprietary technologies and

products that are often hard to migrate from as a customer. Dell have a more open and
effective approach to R&D.
 Dell’s organizational structure:
The virtual company
• Direct relationship with customer is strategic; rich information
flows
• Outsource non-strategic functions
• Information flows substitute for physical flows
• Coordinate value network thru IT-enabled information processes
Logistics
Component System
companies
suppliers integrators and
resellers

Dell Order
management
Operations Customer
Component and supply relations Customer
Manufacturer chain

Repair and
Third party
support providers
HW and SW Distributors
suppliers
 DELL – the Pull-Push
boundary
Customer Customer
PULL

Virtual Integration
Distribution
Channels
PULL
Dell
PUSH
Manufacturer

Suppliers
PUSH
Suppliers

Typical PC Supply Chain

(Compaq, HP, IBM, etc.) Dell Supply Chain
Dell’s Direct vs. Industry
Indirect
• Strengths model
of the direct model
• Most efficient method of distribution
• Extremely low inventories.
• Rapid response to customer changes.
• Strong relationship with customers and
suppliers.
• Weaknesses of indirect model
• Time = money (rapid innovation by parts
suppliers send value of newly built PCs
plummeting quickly).
• Have to discount old technology.
• Retailer sends unsold units back to
manufacturer.
Results:
Direct vendor Dell has best performance.
Dell has forced other vendors to go direct.
Industry as a whole has improved performance.
Reason for Dell’s Growth
 Was a pioneer in “configure to
order” systems.
 Implemented “JIT” (just in time)
manufacturing approach
 Achievments
• A Fortune 200 company in just 14 years
• Dell is the World's largest PC maker having Build To Order
model.
• No 1 in profitability for the computer systems industry
• As of 2006 it employs more than 63,700 people. Customers
in 170+ countries.
• For the last couple of years it has held its position as market
leader (it took it from rivals Hewlett-Packard).
• According to the Forbes 50 2005 list, Dell ranks as the 28th-
largest company in the United States by revenue.
• In 2006, Fortune magazine ranked Dell as No. 8 on its annual
list of the most-admired companies in the United States.
• Major competitors are IBM, APPLE, HP.
 DELL Inc – The Success
•
Secret
Internet coupled with Direct Business Model
- sell directly to end customers instead of intermediate distributors, resellers.
• Virtual Integration
- using sophisticated CRM, SCM systems at respective ends as well their integration
- already integrated with 38 procurement and ERP systems across all its clients
- vendors – Ariba, SAP, PeopleSoft, J.D. Edwards – Dell integrated with their ERP (Source: Rob
Rosenthal, Dell’s B2B web site strategy, October 2003, IDC #30202)
• Selling Points
- Internet, B2B (Premier Pages), Phone-calls, Mass catalog mailings
• Do not Just sell Products – sell Values
- client asked to put tags on their computers
- proactive in solving clients pain points – preloaded software
• Dell was much less mature compare to IBM and HP at time when Internet took off – required
much less effort to adapt its systems to Internet technologies.
• IBM and HP’s core competency was product innovation and development, Dell’s expertise was in
assembling and catering to business needs.
 Dell Inc – Boundaries of Direct
Business Model ?
• Have other manufacturers been able to do this? Why or why not? Is this model
bounded in the PC industry?
– Presently HP is using the Direct Model. Supposedly Compaq’s strong direct
sales model helped HP after the merger. Prices are in comparison to Dell.
» Source - www.ecommercetimes.com/story/19385.html
– Compaq emulated the model before merger with HP.
• Dell had better profitability management.
» Source -
http://www.findarticles.com/p/articles/mi_m0DTI/is_12_31/ai_
111163644
– Local computer vendors
– B2B markets – common meeting point for manufacturers and institutional
consumers.
 Customer Lessons
Learned
• Form a direct model that specializes on market
segments or customer types.
• Know EXACTLY what the customer wants and then
provide it.
• Price is not a sustainable competitive advantage.
• Sustain loyalty through customers and employees
Response Time
Quality Products
Valuable Features
Make the Experiencing of Products EASY
 Dell Inc – Key Questions
• Is the Direct Business Model a new model ?
No, its not ! – all the primitive businesses used to trade like this – today hotdog
stands all over Manhattan is an example of that model on small scale

• What new emerging technologies will push this further ?

- SOA will help refine and innovate these and perhaps new similar kind of business
models by reducing operational and transaction cost.
- Web Services will remove human interaction further – reducing cost
for example:
- SLA will be negotiated by software agents
- Vendors selection based on their expertise will be automated
- Long life Lithium ion batteries increased sales
- RFID tags can further streamline the supply chain, inventory and shipment
tracking process
 Three golden rules at Dell :
`Disdain inventory'
`Listen to the customer'
`Never sell indirect'

? Thank You >