DELL Case Study: Dell Direct

7/23/2019 DELL Case Study: Dell Direct

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Supply Chain Management1

2013.4.18

Susie

Riri

Dell Inc. Case Study : Dell Direct


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Table of Contents

Storytelling

-History of Dell

-Case Questions

Analysis-Who is Dell?

-External Analysis

- Internal Analysis

Conclusion

-Summary

-Implications


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1976, Stephen Wozniak & Steve Jobs, Apple computer

1980, IM, !pen architecture, o!the!shel component! "S #os rom "S! $ntel 8088 microprocessor! %anon isk rive! 'omputerlan an Sears (usiness as )etailers

1981, $(" commane *+ o -' market share .hileApple/s share .as riven o.n to +0

Structure o the computer inustr erticall!inte2rate corporations !3 "!ri#!ntal $slices% Silicon platorm 4 'omputer platorm 4 Sstem sot.are 4 -acka2e application

%his structure enable $("!-' 5clones like 'ompa,e.lett -ackar ne o them .as D&'' 'omputer 'orp:

(ers!nal C!mputer

Storytelling

Questions

Conclusions

Analysis


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Dell "ist!ry

$25265M$25265M

Birth &Chilhoo

!rofitless"ro#th

Explosi$e"ro#th

4

%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))

$69.5M$69.5M $546M$546M

$3,475M$3,475M

%

Storytelling

Questions

Conclusions

Analysis

0et 1e$enue2in 3illion 45


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Birth &Chilhoo

!rofitless"ro#th

Explosi$e"ro#th

5

%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%

Storytelling

Questions

Conclusions

Analysis

0et Income2in 3illion 45

#ell 'orp: 198;,


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Birth &Chilhoo

!rofitless"ro#th

Explosi$e"ro#th

6

%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%

Storytelling

Questions

Conclusions

Analysis


Dell : irth ) Childh!!d *1+83 , 1++0-

Support services such as 24h!ur

h!tline an 2uarantee shipmento replacement part

/uality at a reas!nale price

#ell 2re. rom nothin2 to @?00"sales in 1990

"ichael #ell became the richestperson in %e>as

$nternational >pansion to serve touropean, mile eastern an

Arican markets

Simplicity

&iciency

gility


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Birth &Chilhoo

!rofitless"ro#th

Explosi$e"ro#th

7

%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%

Storytelling

Questions

Conclusions

Analysis


#ell/s moel bein2imitate b other

nterin2 )etail

(ooke their irstloss in 9;/

Dell : (r!itless r!th *1++0 , 1++4-


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Dell "ist!ry

Birth &Chilhoo

!rofitless"ro#th

Explosi$e"ro#th

8

%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%

Storytelling

Questions

Conclusions

Analysis


Baunchin2 ...:ell:com

"e thin# about internet commerce as alogical extensions of our direct

model$&ecause we're all about

shrin#ing the time and the resources it

needs to meet customer's need$

$nternet increase eicienco sales process an service

>tranet to let supplier shareinormation .ith #ell


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Case /uesti!ns

What oes #ell o .ell an .here oes it stru22leC

What contribute to #ell/s success an rapi 2ro.th in thelate 1990/sC

What is #ellC A computer manuacturerC A consumerelectronics companC An $% service partnerC What is theirocusC

What i #ell o to set itsel apart rom the competition inthe hi2hl competitive an rapil evolvin2 personalcomputer inustrC

o. i #ell se2ment its customersC What tpes ocustomersC What .ere the likeC

What are the avanta2es o this irect marketin2 anirect manuacturin2 moelC

Storytelling

Questions

Conclusions

Analysis


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nalysis : 5h!6 ) 5hat pr!lems6

Who is #ellC

'omputer "anuacturer DAssemblerEF $% service partner

i2h technolo2, Short lie ccle


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nalysis *M&C&-

Storytelling

Questions

Conclusions

Analysis

&7ternal

&nir!nment

5hen6

5here65hy6

"!6

Internal

C!mpetence


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nalysis *M&C&-

Storytelling

Questions

Conclusions

Analysis

5hen6

5here65hy6

"!6

S59 nalysis


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&7ternal nalysis *(&S-

When & Where H 1980sI1990s, in =:S:

Categ!ry Issue hreats;9pp!rtunities

-olitical !2overnment D90sEpportunit $ncrease in Kovt:

spenin2 on $% inra

conomic=:S: conomic )ecover D80sE

=:S: conomic (oom D90sE

pportunit companies aniniviuals spen more on $%

Social

)isin2 incomes an eman or$% in Asia, urope, "ile ast

pportunit ! L o .orl/spopulation, ne. market

'han2e rom $nustrial Societto $normation Societ

pportunit increasin2eman or servers an net.ork

2ear

%echnolo2ical

>plosion in ata inormationan content D1-'M1-ersonE pportunit increasin2

emanWWW era opene

Storytelling

Questions

Conclusions

Analysis

Bot/s opportunitiesNN


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&7ternal nalysis *(!rter!rces-

Storytelling

Questions

Conclusions

Analysis

'omputer $nustr


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nalysis *M&C&-

Storytelling

Questions

Conclusions

Analysis

5hen6

5here65hy6

"!6

S59 nalysis


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nalysis : Internal nalysis *"(-

ReduceChannel

Costs

Why?

Ho#?

MinimizeInventory

Speed ofExecution

(JIT)

irectCustomerRelation

Close

Relation!"

Suppliers

Initiatives

#)irect Model$)Customers %Se&mentation

')

Simplicity6 Efficiency6 A7ilityStorytelling

Questions

Conclusions

Analysis

e! Sales

SecureCustomer

s

IncreaseE*ciency

+uildTi&ht

Relations


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Initiatie 1. Dell Direct M!del

$nirect 'hannels

)eseller 'ustomize the -' to customerreuirements, installe components an provieaitional service an support


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#irect "oel

(passin2 the ealer channel, sellin2 irectl toconsumer ecution an "inimum $nventor

'haracteristics o #irect "oel liminate costs & risks o carrin2 lar2e inventories J$%" H hi2h velocit, reuce channel costs rom 1? to + o

prouction revenue #irect customer relationship Batest tech: introuce aster than inirect channels =se $% to control value chain an achieve a hi2h e2: o

coorination (uil!to!orer

uil!"to"#r!er

Storytelling

Questions

Conclusions

Analysis


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Manuacturing (r!cess Oo Warehouse Space

?! inent!ry other than .ork in process DW$-E 'omponents arrive rom suppliers@ust in time !rmanuacturing throu2h the actor/s car2o oors

"anuacturin2 is snchronize to avoi storin2 parts orinishe sstems %his needs cl!se relati!nship ith suppliers #ell has small numer ! suppliers even reuce number rom +0* in 199+ to *7 in 1997 rust"anuactures like Son, Bo2istics like =-S

P ?! test time

SS CCMMStorytelling

Questions

Conclusions

Analysis


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'ustomer Service >irst !nsite serice !r (C it

1,;00 technicians, accessible b phone +* hours a a 90 solve b standard tr!ulesh!!ting pr!cedures

mplos hirdparty maintenance pr!iders like =niss,Wan2, #ecision one consultin2 an #i2ital uipment %i2ht coorination .ith maintenance proviers eels liAe

Bust !ne large c!mpany

$n 'omputer.orl/s 1998 surve #ell ranke irst in usersatisaction ollo.e b Kate.a

SS CCMMStorytelling

Questions

Conclusions

Analysis


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(uil!to!rer H -ros & 'ons

dantages Disadantages

Sellin2 irect to customers cuts !utthe middleman, .hich increasesDell


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uildt!9rder *?! and hen-

Storytelling

Questions

Conclusions

Analysis


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nalysis : Internal nalysis *"(-

ReduceChannel

Costs

Why?

Ho#?

MinimizeInventory

Speed ofExecution

(JIT)

irectCustomerRelation

Close

Relation!"

Suppliers

Initiatives

#)irect Model$)Customers %Se&mentation

')

Simplicity6 Efficiency6 A7ilityStorytelling

Questions

Conclusions

Analysis

e! Sales

SecureCustomer

s

IncreaseE*ciency

+uildTi&ht

Relations


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Initiatie2 : Cust!mer Segmentati!n

Storytelling

Questions

Conclusions

Analysis


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Initiatie2 : Cust!mer Segmentati!n

Storytelling

Questions

Conclusions

Analysis

P #ell


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Initiatie3 : 555

Storytelling

Questions

Conclusions

Analysis

Increase Efficiency of Customer Ser$ice

Buil 1elationship #ith Supplier 2Extranet5

"e thin# about internet commerce as a logical

extensions of our direct model$&ecause we're all

about shrin#ing the time and the resources it needs to

meet customer's need$

he real potential of internet is its ability to transform

relationships within traditional supply chain and to create

value that can be shared$

t's more valuable to be in front with

imperfect internet implementationrather than to be a late comer with

the perfect website


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nalysis *M&C&-

Storytelling

Questions

Conclusions

Analysis

5hen6

5here65hy6

"!6

S59 nalysis


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Summary : C!re C!mpetence

C!mpetency Descripti!n

uild t! !rderP Allo.s or J$%, keepin2 inventor costs o.nP Reepin2 manuacturin2 in!house enables c!ntr!l

! uality an aster ne prouct releases

Direct t! SalesP Cuts !ut retail marAupP "aintain higher pr!it margins an lo.er price

alue addedserices

P #o not ust sell prouct, sell values

P -roactive in solvin2 clients painP 'ustomer services like sot.are o.nloain2

dierentiate#ell rom competitors in (+( market

Internet C!upledi#. M!del

P Sell irectl to en customersP #ell .as much less mature compare to $("M-

.hen $nternal took o, less eorts to aapt sstem

Storytelling

Questions

Conclusions

Analysis

$(" an -/sH prouct innovation & evelopment #ell/sH e>pertise in assemblin2 an caterin2 business nees

PTello.H -ossible or competitorsPKreenH er iicult


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C!nclusi!n

Storytelling

Questions

Conclusions

Analysis

P #ell/s


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Tan% &ou'

:;he only constant thin7 a

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DELL Case Study: Dell Direct