Amrita Pratap (043009) Sudhir Mishra (043055) Arpan Sengupta (043013) Chetan Sharma (043017) Irshad Ali (043027)

AT DELL

Puneet Jain (043039)

Michael broke the paradigm about how to run a computer business, but they haven't been so great at finding the next paradigm

David Yoffie Professor ,Harvard Business School

Flow of Presentation
Key Role Players Key Issues In The Case Dells Key Business Principles Offshoots Of Rigidity Our Suggestions

Key Role Players

Michael Dell Kevin B. Rollins

Key Issues In The Case

Dells rigidity on their key business principles Customer Dissatisfaction Falling Operating Margins Outdated Models/R&D/Tie-up with only Intel and Microsoft Restless Employees Reluctant Recruiters New Product Duds Loss of Reputation

Dells key business principles (That Became Their Quandary)

Disdain Inventory Always Listen To The Customers

Never Sell Indirect

Due to extreme rigidity on the key business principles, any discussion revolving around changes and business adaptation in the same were not entertained. Their only focus was on reduction of cost

Offshoots Of Rigidity
Customer Dissatisfactio n Operating Margins Reduced focus on customer service Switching of loyal customers

Compressed operating margins It was becoming very hard for Dell to lure the customers to its Web site with cheapo models and then getting them to buy it Now PCs are so powerful that most consumers are fine with preconfigured models in stores The Asian contract factories that make them for Dell also make them for other companies, eroding Dell's build-to-order advantage

Outdated Model

Reluctant Recruiters New Product Duds Restless Employees

Headhunters would rather recruit from Dell than for it ,because working with the company is so difficult and unprofitable

Dell dropped its DJ music player Its stolid brand image doesn't help it in fast-growing consumer markets Lack of R&D

Employees now find Dell's harddriving culture too much of a grind

Point of Difference Innovation

Rigid, Cost Focus

Innovative

Microprocessor
Operating Margin

Intel
Sank to 7.7%

AMD
Climbed to 10.7% 2.4 bn 3 hrs

Last Year Revenue 3.6 bn Assembling Time 1 hr(calculating measures to whittle down $3 bn) Boeing, Daimler Chrysler, TRW 18.18% 37.8 mn

Business partner PC market Share PC Unit Shipped

B.O.I 16.52% 32.6 mn

Diversification Of Suppliers Multiple Channel Of Distribution Better Consumer Research R&D/Product Development Showrooms/EBOs

VA P
Customers

Online Booking

Commercial Buyers Exclusive Business Unit

Direct Channel

Suppliers (AMD/INTEL)

Dell

Distribut or Services (Companyowned/ Franchisee)

Retailers

Customers

Commercial Buyer

Indirect Channe l