1. DELL Strategic Management 30-03-2004 Group A9 Coman Fullard
Alexius Freund
Raman Karol
Dhirapat Kulophas
Adriano Prates
Marcus Wyss

2. Introduction CEO: Michael Dell Teenage Entrepreneur
College Dropout
Multi-Millionaire
World’s Number 1 PC maker
Direct Sales Model
Standards based designs
Corporate Darwinism
Almost no R&D
JIT manufacturing
Cost conscious

3. Products & Services Enterprise Servers Peripherals Workstations
Laptops &
Notebooks
Networking
Products
Desktop
Systems
Managed Services
Professional Services (consulting)
Deployment
Technical Support / Warranty
Training / Certification
GOLD
SILVER

4. The Industry ? Potential Entrants Rivalry Within Industry Suppliers
Economies of scale
High Capital investment
Low Product Differentiation
Absolute Cost Advantage
Rivalry Within Industry
Suppliers
Buyers
Concentrated Supplier Market
Few Suppliers / Key Components
Important inputs
Concentrated Market
High global growth rate
Low Differentiation
High Bargaining Power
Access to Information
Low Switching Costs
Substitutes ?

5. Business Model Traditional Model: DELL Direct Model: Suppliers
PC Makers
Distrib.
Resellers
Customer
DELL Direct Model:
Suppliers
DELL
Customer

6. The 4 P’s Product Price Place Promotion Build-to-order
Mass Customisation
Segmented service levels
High quality/cost effective
Price
Lowest-cost producer
Changes Daily
Flexibility
Essentially self-financing
Place
Fast, efficient distribution
Internet, phone, catalogue based sales
Distributors in some markets
Promotion
Relationship business
SME: direct mail/online
Consumer: editorials, word-of-mouth, print advertising

7. SWOT - I Strengths Weaknesses Unique Business Model Mass Customization
Customer Contact
Customer Loyalty
Unique Management Style
Standards Based Technology
Limitations of Business Model
Over-reliance on CEO
Thrift
Low Corporate Morale
No R&D

8. SWOT - II Opportunities Threats Product Extension Splintered US Market
International Expansion
Vast Customer Base
Increased service based opportunities
Replication of business model by competitors
Limitations of suppliers
Decreasing profitability of the market
Low morale talent flees \

9. Recommendations cooperation with the local players
Grow the US consumer business
International expansion
Leverage current corporate customers to enter developing markets.
Grow the European business by targeting the corporate segment.
Explore domestic acquisition possibilities
Expand the expert services offered
Move in to the mid level servers.
Maintain “Corporate Darwinism” & continuous improvement approach to operations.
Nurture Company morale to retain talent
brand building
aggressive pricing strategies
cooperation with the local players

10. Update 2001: Internal survey reveals very poor worker morale
Enter Mobile phone market but fail & exit
Expand storage offering with EMC
2002: Enter printer business
2003: Enter consumer electronics
Revenue reaches $35 billion
Net Earnings of $2.12 billion
15% of market
2004: Agreement with Fuji-Xerox
Michael Dell resigns but leaves vision intact

11. The Tao of Michael Dell Hire ahead of the curve Segment the CEO
Build a company of owners
Stay allergic to hierarchy
Mobilise people around a single business goal
Develop products from the customers viewpoint
Target a customer of one
Add value “beyond the box”
Align complementary strengths for success
Flip the demand/supply equation
Play judo with the competition