Distribution -Dell Case

8/3/2019 Distribution -Dell Case

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AT DELL

AmritaPratap

(043009)Arpan

Sengupta(043013)

ChetanSharma(043017)

Irshad Ali(043027)

Puneet Jain(043039)

Sudhir

Mishra(043055)


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Michael broke the

paradigm about how torun a computer business,

but they haven't been so

great at finding the next

paradigm

David YoffieProfessor ,Harvard Business School


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Flow of Presentation

Key Role Players

Key Issues In The Case

Dells Key BusinessPrinciples

Offshoots Of Rigidity

Our Suggestions


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Key Role Players

Michael Dell

Kevin B.Rollins


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Key Issues In The Case

Dells rigidity on their key business principles

Customer Dissatisfaction

Falling Operating Margins Outdated Models/R&D/Tie-up with only Intel

and Microsoft

Restless Employees

Reluctant Recruiters New Product Duds

Loss of Reputation


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Dells key business principles

(That Became Their Quandary)

Disdain Inventory

Always Listen To TheCustomers

Never Sell Indirect


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Due to extreme rigidity on the key

business principles, any discussionrevolving around changes and

business adaptation in the samewere not

entertained.

Their only focus was onreduction of cost


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Offshoots Of Rigidity

Reduced focus on customer service

Switching of loyal customers

Customer

Dissatisfaction

Compressed operating marginsOperating

Margins It was becoming very hard for Dell to lure

the customers to its Web site with cheapomodels and then getting them to buy it

Now PCs are so powerful that most

consumers are fine with preconfiguredmodels in stores

The Asian contract factories that make themfor Dell also make them for othercompanies, eroding Dell's build-to-order

advantage

OutdatedModel


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Headhunters would rather recruitfrom Dell than for it ,becauseworking with the company is so

difficult and unprofitable

Reluctant

Recruiters

Dell dropped its DJ music player

Its stolid brand image doesn't help itin fast-growing consumer markets

Lack of R&D

NewProductDuds

Employees now find Dell's hard-driving culture too much of a grind

RestlessEmployees


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Point ofDifference

Innovation Rigid, Cost Focus Innovative

Microprocessor Intel AMD

Operating Margin Sank to 7.7% Climbed to 10.7%

Last Year Revenue 3.6 bn 2.4 bn

Assembling Time 1 hr(calculatingmeasures towhittle down $3bn)

3 hrs

Business partner Boeing, DaimlerChrysler, TRW

B.O.I

PC market Share 18.18% 16.52%

PC Unit Shipped 37.8 mn 32.6 mn


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Diversification Of Suppliers

Multiple Channel Of Distribution

Better Consumer Research

R&D/Product Development

Showrooms/EBOs


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Suppliers(AMD/INTEL)

Dell

Customers

Commercial

Buyers

ExclusiveBusiness Unit

Retailers

Customers

CommercialBuyer

DirectChannel

IndirectChanne

l

OnlineBooking

VA

P

Distributor

Services(Company-

owned/Franchisee)


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Documents

Distribution -Dell Case