Dell Computer Corporation

MARKETING CASE STUDY

MATCHING DELL

1. Executive Summary

Dell Computer Corporation is one of the world's largest computer systems companies. Since its establishment in 1984, Dell has been selling personal computer systems with a great after sales support. It designs and customizes products and services according to the requirements of the end-user. It also offers them the extensive list of peripherals and software which can be chosen while placing an order.

The company has experienced a very good growth over the last several years and has been incredibly profitable. Its products and services are sold in more than 140 countries to customers ranging from government agencies, major corporations and educational and medical institutions to small businesses and individuals. Traditionally, Dell has been targeting its products to a small number of segments. So, in future it has to break into segments which are currently controlled by its customers. According to our analysis of the data, Dell is financially into a very good position currently and it is predicted that in the next year also it will continue to grow. The analysis, strategy and financial predictions are henceforth discussed.

2. Situation Analysis

The case has been analysed using the 5C analysis where 5C's stand for: Company, Consumers, Collaborators, Competitors and Context.

2.1 Company:

* History

o The founder Michael Dell started off by opening a part-time business upgrading PCs.

o Once the revenue of the business reached revenue $80,000 he started Dell Computer Corporation.

o Dell shifted from upgrading the machines of other manufacturers to assembling Dell-branded PCs.

o Dell was the pioneer for Direct Model in the PC Industry. They Dell took orders directly from the customers and supplied to them directly.

* Sales and Marketing

o In 1990, Dell departed from the Direct Model and entered retail channel. This was to cater to the entry level customers who wanted to touch and feel a unit before buying.

o Dell subdivided its consumer base into finer and finer categories to cater customised goods to each section.

o By 1994 they withdrew from retail stores owing to the poor financial results in 1993 due to poor retail sales.

o Additionally they divided the sales effort by region and, within region, by country.

o This helped to identify unique opportunities and economics.

o Helped to manage the company more easily.

o Dell launched its web site www.dell.com and increasing customers were using the site to contact Dell.

o Dell designed custom Premier Pages for Relationship Customers where the employee would find the info regarding the deals with the customers.

o Occasionally, Dell sold about 5% to resellers.

* Production

o Dell manufactured customised PCs based on actual orders and therefore held no inventory.

o Dell has operating facilities in USA, Ireland, Malaysia and China.

o Dell ensured that their entire production system was integrated and therefore prevented pile ups.

o Meticulous Planning - Dell ensured every order was sent electronically to the appropriate manufacturing facility. The customised PC was then produced within a day and a half from the receiving of the order.

o Very fast delivery time in case of emergencies - Dell also helped out NASDAQ during the Asian economic crisis by shipping customized tested servers within 36 hours.

o Handle very large projects - As seen in the case of Wal-Mart (2000PCs and 4000 servers).

o Dell maintained electronic links with its suppliers to arrange just-in-time delivery of parts.

o Dell utilised these links with its suppliers to direct supplier shipments straight to customer.

o Dell also encouraged suppliers to locate warehouses and manufacturing units close to its major facilities in the Silicon Hills.

* Products and Services

o 2 lines of desktop computer

 Highly reliable, stable and highly compatible with corporate networks

 Incorporate the latest technology

o Prices

 $1,250 for individual consumers

 $4,000 for corporate networks.

o 2 lines of notebooks with a similar distinction as above.

o Dell's systems used Windows NT and x86 processors

o Also offered to install of-the-shelf software and a customer's proprietary software.

o Installed and tested computers at consumer sites.

o Dell Financial Services offered leasing, technology, planning and asset management services.

* After Sales Support

o 50,000 pages of customer support information.

o Call up technical support staff that would be able to resolve 90% of the cases.

o For problems requiring onsite visit, Dell outsourced it Xerox, Wang Global and Unisys, which would resolved within 24 to 48 hours.

o Worked with service providers to create measures of service quality and to improve the flow of data between them and Dell.

o Dell also conveyed information concerning defective parts from service providers back to suppliers.

In most of the industry surveys, customers rated Dell's sales, products and services highly relative to the competition.

2.2 Consumers:

Market