2. Dell
•Dell is listed at number 41 in the Fortune 500 list.
•It is the third largest PC vendor in the world after HP and Lenovo.
•Dell has grown by both increasing its customer base and through acquisitions since
its inception; notable mergers and acquisitions including Alienware (2006) and
Perot Systems (2009).
•Notable Acquisitions: -
2006 - Alienware
2009 - Perot Systems
2010 - KACE Networks
2010 - SaaS
2012 - Sonic Wall
2012 - Wyse
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3. Dell’s Strategy
Dell’s success is a combination of : -
•Direct Sales
•Build-to-order
•Supplier integration
Together these allow for maximum effectiveness with minimum cost
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4. L5
L5 Vs L6
MB
Integrated 5 Weeks Dell
Manufacturing
Supplier Logistics Customers
Center
Chassis
L6 3 party integrator (managed by
equipment manufacturers)
L5 Additional
cost
1 Week
MB
Supplier Logistics Dell
Center Manufacturing
Customers
5 Weeks
Chassis
5. Manufacturing, Materials
Sales & Marketing
Supply & R&D
Channels of Distribution
Sales representatives Manufacturing
Telephone-based sales Build-to-order manufacturing process
Online sales through www.dell.com Process consists of assembly, software installation,
Marketing programs for specific customer groups functional testing and quality control
Locations: USA, Brazil, Ireland, Malaysia, China
Large business & institutional customers
Small-to-medium business & consumers Materials Supply
Advertising on television, Internet, print media Large number of suppliers
and by mailing publications Intel Corporation as a sole source supplier of
Dell Direct Stores: view Dell products in person processors and Microsoft sole source supplier for
and purchase with assistance various operating systems and application software
products
R&D
Very low expenses: $464m (0.94% of Revenue)
HP (4.3%), IBM (5.9%), Sun (16.3%)
Company uses partners (e.g. Intel, Microsoft,
EMC, Lexmark) to develop technology
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7. Business Strategy – key tenets
Direct relationship is the most efficient way to the customer
Dell‘s „direct business model“ eliminates wholesale and retail dealers
No expenditures associated with the retail channel
constant flow of information about customers’ plans and requirements
enable Dell to continually refine its product offerings
Custom-built products and custom-tailored services
Build-to-order manufacturing process
Turn over inventory every 4 days on average and reduce inventory levels
Rapidly introduce the latest relevant technology
Rapidly pass on component cost savings directly to customers
Low-cost leader
Efficient supply chain management and manufacturing organization
Concentration on standards-based technologies
Direct business model
Pass those savings to its customers
Standards-based technologies deliver the best value to customers
Provide customers with flexibility and choice
Benefit of extensive research and development
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