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Published by: 21411835 on Jan 29, 2011
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Concept Summary of Direct From DELL Strategies That Revolutionized an Industry By Michael Dell

High Technology Marketing Scott Smith

WalMart 1991 Converts entire line to 486« high technology priority 1993 $2 Billion in sales High Technology Marketing Scott Smith .Timeline 1980 Purchased first computer and takes it apart 1983 Wanted to beat IBM. Sells upgraded PCs out of UT Dorm Room 1984 Registers Dell Computer Corporation DBA PC¶s Limited Sells Direct to end users 1986 12 mhz 285 based system. Best Buy. 30 day money back guarantee 1987 International subsidiary in UK 1988 Initial IPO $30 million 1989 Accumulates excess inventory 1990 First to sell through retail CompUSA.

Timeline 1994 Launches Latitude Notebook Setting new records on battery life. High Technology Marketing Scott Smith . Sets up supplier network. 1996 Introduces PowerEdge servers for small and medium server markets 1998 Solidifies internet market. $12 million per day from customers.

Dell¶s Entrepreneurial Spirit ‡ Dell¶s Stamps: Eliminate the Middleman Look for a Commercial Opportunity The power of catalog advertising ‡ Newspaper Subscriptions Identify Segments of High Demand and High Revenue: People who just moved or just married Generate the Lists and Target them ‡ Turn Fascination to Hobby and to Business High Technology Marketing Scott Smith .

Dell Computer ‡ Goal: Build a Better Computer than IBM ‡ Driving Passion: How can we make the process of buying a computer better? ‡ Sell Direct ‡ Eliminate Reseller Markup ‡ Pass Savings to the Customer For Dell. the timing was right: the beginning of a new consumer industry: Continued high growth and limited supply High Technology Marketing Scott Smith .

.Strategic Questions ‡ ‡ ‡ ‡ ‡ Where are we today? What do we think it will become? Where do we want it to go? What opportunities can take us there? How can we take advantage of them? Then make a wish list.. High Technology Marketing Scott Smith .

‡ Price is not a sustainable competitive advantage.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. ‡ Sustain loyalty through customers and employees Response Time Quality Products Valuable Features Make the Experiencing of Products EASY High Technology Marketing Scott Smith .

Service Best Value Awards. Support.Key Actions ‡ ‡ ‡ ‡ 30 Day Guarantee (Industry¶s First) Performance Leader (Competitive Reviews) Award Winner for Quality. Highest Performance Awards High Technology Marketing Scott Smith .

etc. Customer. ‡ Measure everything to build improvement. . Use. Facts are your friend.Market Lessons Learned ‡ You must target large companies to grow ‡ Provide the Best Support ‡ Engage in Global Expansion ‡ Features must compel the customer to buy ‡ Inventory flow speed is the key to survival ‡ Identify problems early and then fix them ‡ Involve your customers early in development High Technology Marketing Scott Smith ‡ Gradual improvements reduce risk and allow you to take advantage of technology ‡ It is hard to notice how fast or slow you are growing ‡ Read the market and then try to understand what it means ‡ Understand the economies of each segment: Product. Geography.

Growth and then understand what is driving us.Analysis is Key ‡ There is no system that does not produce enough data to diagnose its own inefficiencies.3B Sales. $220m Inventory 1998 $12.9B sales. how to do more. $230M Inventory Scott Smith . Geographic Area ‡ Compare Sales with Total Market Sales. Sales Force Productivity. Profitability. and where next? High Technology Marketing ‡ ‡ ‡ ‡ ‡ Eliminate Resellers Eliminate Channel Inefficiencies Speed the manufacturing process Add Velocity less time in channel steps Squeeze investment and inventory out of the channel: 1993 $ 2. Service Level Performance ‡ Analyze Goal Progress by Product. Customer. Examine Share. Growth Rate. ‡ Define Your Goals: Market Penetration.

Dell Market Structure Changes Over Time High Technology Marketing Scott Smith .

Results Oriented. Product ‡ Make successes a win for the entire company through communications High Technology Marketing Scott Smith . ‡ Responsibility to one another ‡ Do Not Hoard Power ‡ Implement through Dual Reporting: By Function.Managerial Lessons Learned ‡ Hire people for potential to grow and develop: Self Reliant. ‡ Accountability for Results 360 degree reviews. Market. Driven to Lead. ‡ Recruit for succession (Train them to replace you) ‡ Stress Achieving Goals.

Key Recruiting Issues ‡ ‡ ‡ ‡ Can they think in economic terms? What is their definition of success? How do they relate to people? Do they understand the strategy of the business they are involved in? ‡ Do they understand our business? High Technology Marketing Scott Smith .

Talking to Employees ‡ What are customers telling you? ‡ How do you think the company¶s products are doing? ‡ What are our biggest challenges? ‡ What are the biggest threats to our success? ‡ How can the company support you better? ‡ Keys: Mobilize people around a common goal. High Technology Marketing Scott Smith . cultivate a commitment to personal growth. hire ahead of the game. get them involved.

‡ Study the obvious for non-obvious solutions Ask customers how they would have it solved. High Technology Marketing Scott Smith . ‡ Treat employees as owners. ‡ Make failures with learning acceptable ‡ Constantly question even good stuff. make them clear to everyone.Train Employees to be Owners ‡ Look at goals. No cover up.

Great PR High Technology Marketing Scott Smith . analysts. Dell Introduced.Dell Market Coups ‡ Low and Medium Size Server Market ‡ 12 Mhz 80286 Computer doubles Analysis 1: Servers have higher IBM¶s 6 Mhz speed. ask life batteries. Dell entered market at about life 20% lower price and told customers Analysis: Laptop owners want long ³even if you don¶t buy from Dell. they still had power. Dell Tied up whole your vendor to match Dell¶s price.´ channel by contracting SONY to Server Dropped 17 percent in one year manufacture. servers as a cash cow for feeding the PC ‡ Laptops:Lithium Ion doubles battery market. and reduced the size of the cash cow for chartered plane for reporters and competitors. margins Analysis: Technology enthusiast Analysis 2: Competitors were treating market wanted speed most of all. gave them a laptop and flew to Los Angles« 4 1/2 yours later.

Enter the Web ‡ ‡ ‡ ‡ ‡ Increases Speed to Market Speeds Information Flow Enables Superior Customer Service. Provides a High Quality Product Gives Customers Direct Access to Custom Made Systems for High Performance ‡ Provides the Latest Technology relevant to that customer. High Technology Marketing Scott Smith .

High Technology Marketing Scott Smith .Enter the Web ‡ Dell Premier Pages: Technical Support Diagnostic databases On-Line Ordering Special Pricing ‡ Key: Shrink time and required resources to meet customer needs.

technology. you are managing in the rear view mirror. ‡ If you accept status quo as good enough. ‡ Don¶t perfume the pig: Don¶t make something appear better than it is. ‡ If we have a problem we have to fix it. someone else will. ‡ If customer demand changes. supply chain.Market Strategy ‡ It is better to be first at the risk of being wrong than it is to be 100% perfect two years too late. ‡ Elevate a win to company wide accomplishment High Technology Marketing Scott Smith . market trends). We know if we don¶t. ask WHY?« Challenge them to understand why? (understand the underlying economics from the standpoint of capital.

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