1. Dell inc. Presented by group 6: Jannie, Sabrina & Kasper

2. Agenda 26-9-2012 Dell’s history The strategy of Dell Assessing China by the SLEPT framework Market rivals Dell’s setbacks in China Strategy 2012 - China

3. Dell’s history 1984: Founded by Michael Dell, Texas 1992: Top 500 of the largest companies worldwide 1996: Commence of e-shopping 1998 :Market extension to China 2003: Dell overtook HP’s position as no.1 in the industry 2007: Release of 9.000 employees and lost no.1 position Latest from MarketLine - 2012 Dell has over 103.000 employees worldwide. The company recorded revenues of $61,494 million during the financial year ended January 2011.

4. Dell’s strategy Dell

5. Direct sales through Internet, B2C and B2B Streamlined the supply chain efficiently (supply & demand) Understand customers requirements because of direct contact Cost savings passed to customers Dell’s overall strategy

6. Dell’s strategy - China Business as usual supported by Michael Dell’s 3rd golden rule NEVER SELL INDIRECTLY

7. Assessing China by the SLEPT framework – Part 1 Social  Buying culture  Urban and rural population  Traditions Legal  Bureaucracy in securing government contracts  Contracts are typically one sided and non-negotiable China

8. Technology  Enhancement in communication and transport infrastructures  Boom in internet usage in the period 1997-2006 Assessing China by the SLEPT framework – Part 2 Political  Government promotes local vendors  Government monitors users behavior Economic  Gap recognized between urban and rural cities in terms of high income pr. Capita.  Only 2.5% have credit cards  Cash payment still is the predominant method

9. Competitors 3 out of top 5 computer vendors are from China, they are promoted by the government. Lenovo and Dell will remain the foremost rivals in the future market outlook for China. Lenovo has imitated the direct model from Dell Lenovo headhunted Dell key staff Acquisition of IBM did enhance the potential and market share for Lenovo. Lenovo deployed new approach, called “Transactional model”, for SME’s.

10. Why Dell experienced setbacks Lack of knowledge about the Chinese market (tangible products, face-to-face) Market entry analysis is compulsory when entering new market Best practice approach was not the right strategy in China America is not China (copy & past)

11. Strategy 2012 - China We have reflected on the followings: Human skills are essential. Acquire a market competitor with diverse core know-how. eco-Dell (discount Dell) made by recycled materials, imitate TATA business model. Development of niche product(s).

12. Thank you for your attention

13. Questions for Dell inc. 1.Identify and describe the key elements of Dell’s strategy and explain why it has been successful in the past. 2.Identify, analyse, and discuss the environmental factors using the SLEPT (social, legal, economic, political and technological) framework to explain what Dell faced when entering the Chinese market. 3.Why has Dell’s strategy not been so successful in the Chinese market as in other markets? 4.Will Dell be able to gain competitive advantage with its current strategy in the Chinese market? 5.Can Dell change its strategy and if so, what are the implications?