Presented By,

M. Devithulasimani(09AB07)
Pradeep(09AB43)
Prabhu(09AB28)
Saravana Kumar(09AB30)
Nagarajan(09AB24)
 Dell Inc.
• Multinational IT company based in Texas, US.
• Computers and related products and services.
• Employs more than 96,000 people worldwide.
• US: Texas, Tennessee, Oklahoma, North Carolina and Florida.
• Global: Malaysia, China, India, UK, Philippines, Brazil, Poland
and Ireland.
• Known for its innovations in supply chain management and
electronic commerce.
 History
• 1984 - Michael Dell created PCs Limited.
• 1985 - Produced the first computer of its own design 
• 1988 - Name changed to "Dell Computer Corporation"
Began expanding globally—first in Ireland.
• 1996 - Began selling computers via its web site.
• 2002 - Expanded its product line to include televisions,
handhelds, digital audio players, and printers.
• 2003 - Changed as “Dell Inc” to recognize the
company’s expansion beyond computers
• Acquisitions: 1999 – ConvergeNet Technologies
2009 – Perot Systems
 Some General Information
• “Configure to order" approach - PCs configured to customer
specifications
• Manufacturing the products close to its customers
• First IT company to establish a product-recycling goal (2004)
& completed the implementation of its global consumer
recycling-program in 2006.
• A board of directors of nine people runs the company.
• Dell has regional senior vice-presidents for countries other
than the United States.
• Competitors include Apple, Hewlett-Packard, Acer, Toshiba,
Gateway, Sony, Asus, Lenovo, IBM, Samsung, and Sun
Microsystems
 Markets
• US:
– Over-crowed with stiff competition.
• HP
• Acer
• Apple
• Toshiba
– Dell is struggling to stay on top of its competitors.
– Expansion has slowed considerably.
• International Market:
– Rapid growth stages
US Market Share
Global PC Market Share
 Financial Highlights

• For fiscal year 2011, second quarter (ended

July 30, 2010)
• Revenue — $15.5 billion
• Operating income — $745 million
• Net income — $545 million
• Earnings per share — $0.28
GLOBAL PRODUCTION
HOME PRODUCTION
• United States are located in
• Austin, Texas
• Nashville, Tennessee
• Oklahoma City, Oklahoma
• Winston-Salem, North Carolina
• Miami, Florida
 ABROAD
• Penang Malaysia
• Xiamen, China
• Bangalore, Hyderabad, Chandigarh, Delhi
India, Chennai, India
• Bracknell UK;
• Manila Philippines
• Hortolandia, Brazil
• Łódź, Poland and Limerick, Ireland
 ABROAD
• 1990: Opens manufacturing plant in Ireland
• 1996: Opens manufacturing plant in Malaysia
• 1998: Opens manufacturing plant in China
• 1999: Opens manufacturing plants in
Tennessee and Brazil.
• 2007:Opens manufactuirng in India.
 Dell in Europe
• Dell Łódź will be located within a 500 kilometre
radius of a Central and European IT market that is
expected to grow by 13.9 per cent annually
during the next five years.
• Paul Bell, Senior Vice President, Dell EMEA, said,
"Proximity to a large base of Dell customers, the
significant opportunity for growth promised by
the Central and Eastern European economies,
and the availability of a well-educated Polish
workforce were key factors in our decision
 Manmohan Singh on March 2010
• "This morning I met the chairman of Dell
Corporation. He informed me that they are
buying equipment and parts worth $25 billion
from China. They would like to shift to safer
environment with climate conducive to
enterprise with security of legal system.“

• Soon Dell refused any such move fearing of

loosing Chinese market
 Dell’s second plant in china
• Over the next decade, the company said it
expects to spend about $100 billion on China
operations. It spent $23 billion in China in
2009.
• Dell's turn to the West also comes after a
string of 12 worker suicides this year at
Foxconn's industrial park in Shenzhen, an
industrial center in China's Southeast.
 LOCATION STRATEGY
• Market access
• Labor costs and quality
• Transportation and telecommunications
infrastructure
• Industry clusters
• Government incentives
 SOURCING
• Dell has avoided outsourcing final assembly of
its products.
• Dell sources major components for all
locations from their headquarters. This allows
Dell to consolidate its buying power and get
better terms from suppliers.
• Suppliers are required to maintain inventory
near or in Dell plants to support Dell’s build-to
-order production.
• Monitors : Europe and Asia (Phillips, Nokia,
Samsung, Sony, Acer)
• PCBs: Asia, Scotland, and Eastern Europe
(SCI, Celestica)
• Drives : Asia, mainly Singapore (Seagate,
Maxtor, Western Digital)
• Printers : Europe (Barcelona)
• Box builds: Asia and Eastern Europe (Hon
Hai/Foxteq)
• Chassis : Asia and Ireland (Hon Hai/Foxteq)
Entry into India
• India was the 13th market for DELL.
• Dell initially dealt directly with customers in
major cities after setting up a call centre at
Bangalore in 2001 to cater to the Indian market
• In 2003, the second contact center was opened
at Hyderabad
• Initially they concentrated mainly on MNCs and
business houses, after which they also started
focusing on the general public especially students
when they came up with the laptops
• The company operates its services from four
centers based at Bangalore, Hyderabad,
Chandigarh and Gurgoan
• After the U.S., Dell India is the second biggest
centre with 13,000 employees.
• The strategic importance of India to Dell is
evident from the fact that India was one
among three locations where Dell’s Latitude E
series and Precision notebooks were launched
 Problem faced
• Dell's supply chain is the company's lifeblood.
• That supply chain, in turn, relies on many
factors that appeared to be lacking in India--
stable power, sophisticated logistics, and
efficient deliveries
• The bulk of its business comes through its
website
• At the time when Dell entered internet usage
was markedly lesser than other industrialised
countries
• Endless red tape, layers of documentation,
taxes and rules
• However, Dell quickly realized that for it to
make any mark in the Indian market it will
have to trudge the "traditional" sales path
wherein Dell products would have to made
available in stores as well
 Manufacturing in Chennai
• In July 2007, Dell began production at its new
manufacturing facility in Chennai
• Dell’s third manufacturing location in Asia-
Pacific and Japan region and eighth overall
• The Sriperumbudur plant (50-acre site with a
planned five-year investment of about US$ 30
million) was chosen for manufacturing in
September 2006
• The company has doubled its production
capacity since then from 400,000 in 2007 to
the 1 million units in June 2008
 Retail strategy
• Initially sold directly to customers through phone and
through the internet
• Dell is planning for local sourcing and merging of
components, and working to virtually integrate the
logistics provider into world-class supply-chain
management system to enhance customer service
quality.
• As part of the retail initiative, Dell tied up with Tata
Croma in July 2008 and with select Staples stores
• October 2008- exclusive stores at New Delhi and
Coimbatore
 Tech support
• Dell acquired PEROT Systems in a $3.9 Billion
Deal, a U.S based firm
• It’s BPO acts as the major customer center for
it’s world wide operations
• The major chunk of the calls are handled by
the BPO based in India
 Exports
• Dell Computers have made its first exports out of
India from its PC manufacturing plant in
Sriperumbudur, Tamil Nadu
• An early sign that the PC export sector, long
dominated by China and Taiwan, will start to face
competition from India based manufacturing
units
• Recent and continuing changes in India’s tax base
now make it cheaper for Dell to supply from India
rather than from China, especially to countries in
the Middle East, Africa and Europe
• Export infrastructure improvements have also
made a difference and are now starting to kick in
Market share for PC
Dell in China
 About Dell
• Entered China in 1995 via export
• Started focusing on China in 1998
• Operates in in 1998 established a local
manufacturing and distribution operation
• In 2009, Dell PCs captured 13.6% share in China
• Dell plans to open manufacturing and sales unit
by 2011 in chengdu
 Key Strategic Issues
• Taking advantage of an international opportunity in a
high growth market
• Adjusting business-level strategy in light of a rivalry
• Leveraging core competencies in a foreign market
 External Analysis:
Key Environmental Factors
• Demographic factors:
– Chinese population is 23% of world total
– Main opportunities will be in the larger cities
where incomes are higher
– Urban market got saturated
– Semi and rural market are growing at 60% per
annum.

)
 External Analysis:
Key Environmental Factors
• Socio cultural:
– Purchasing expectations (try before they buy)
– Chinese attitudes and culture becoming more similar
in purchasing patterns and work ethic to U.S.

• Economic:
– Chinese economy grew 11.90% in 2009
– China’s PC market estimated to grow 40% in 2008-
2009

• Technology
– Access and use of the internet is increasing
Internal Analysis
 Key Resources
• Key tangible resources:
– Direct sales system and customer service
– Local production plant in China
– Alliance with Oracle
– Manufacturing (“Build-to-order) and low inventory”
strategy
Key intangible resources:
– Strong brand
– Reputation (“Dell experience” of high-quality
products, support and service)
– Innovative in its technology, business practices and
customer service
 Value Chain Analysis
• Primary activities of value:
– Operations: Manufacturing processes contain
costs well
– Service: High responsiveness to customer needs
• Support activities of value:
– Technological development: Innovative web site
and IT infrastructure
– Firm infrastructure: Visionary founder and
management team
 Strategies used by dell
• More than 5000 retail stores in china
• Innovative dell products
• Offering products through phone and internet
• Got tie up with many institutions
• Cost leadership
• Differentiation (HP,IBM,compaq)
GLOBAL SWOT ANALYSIS
STRENGTHS & WEAKNESS
OPPORTUNITIES
 THREATS
• TECHNOLOGY GROWING AT LIGHITING SPEED
• DISTRIBUTION STRATEGY CAN BE REPLICATED
• DEMAND FOR COMPUTERS IS SLOWING
DOWN.
• GLOBAL IN MARKETING &
OPERATIONS.
DELL MARKET STRUCTURE
VALUE WEB MODEL
 GLOBAL 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.
• If customer demand changes, ask WHY?… Challenge them
to understand why?
(understand the underlying economics from the standpoint
of capital, supply chain, technology, market trends).
• Don’t perfume the pig: Don’t make something appear
better than it is.
• If you accept status quo as good enough, you are managing
in the rear view mirror.
• If we have a problem we have to fix it. We know if we
don’t, someone else will.
• Elevate a win to company wide accomplishment
GLOBAL MARKET SHARE
 RECOMMENDATIONS
• Dell should follow Diversification strategy to
full extent.
• Should be more innovative in technologies in
order to take a lead above HP and other
brands.
• Should explore the developing nations
market.
• Try to establish relationships with retailers,
which may help them boost their sales.