Dell, Selling Directly, Globally Case Solution
Dell is the most famous computer and laptop selling company in the world. In the year 1999, Dell became the second biggest PC seller in the industry. This company preserved a wealthy growth & beat Compaq to develop itself into the biggest PC seller in the whole world. In the US; Dell has developed the first seller of the department of commercial, government, and educational organizations and has gathered a large customer base in the US market. The company has strived hard to build its brand and has earned enormous recognition through its products and services.
With its extremely advertisedB2C Internet business model; Dell made its entrance into the PC market with a great-influence and astonished the industry with its innovatory, customer-goal oriented and efficient distribution quality. Retailing PCs online was a natural evolution to Dell’s standing key point; Dell understood this immediately and had become the primary market applicant. This case study examines Dells’ developing business & trade and focuseson its access key point for China.(Ali F. Farmhand, 2000)
Dell was established in 1983 by Michael Dell when he was just 18 years old. Michael Dell started retailing the advanced PCs & improved on elements since he was a student the Texas University and was living in the university’s dorm room. After 15th years of the company’s operations, Dell was ranked the second biggest company in the US and had gone on to become the best PC Company in the world in 1999. Dell was developed into a computer selling company in May 1984, when it started its operations on an official level. It was originated based on the B2C Model. Dell was one of the fastest expanding companies among all key computer companies worldwide. Michael Dell becomes the youngest CEO of a 500 fortune business. In the year of 1999, dell was ranked the number one PC seller in the US.
Overview of the Industry
In the demographic industrial overview; Dell had targeted its customers based on business size and based location. Dell had targeted those customers who have smaller to medium scale businesses in the US. Dell was also consideration of the location where it wanted to build its customer segments, such as the USA, UK, and other 16 international markets in 1999. Dell has its sales office in 33 countries throughout the world. Dell has delivered its products and services to its customers in more than 170 countries, regardless of which regions they were from throughout the world. Technology-wise, Dell utilized a direct retailer approach through the internet to expand its business. Dell is providing 24 hours technical help through online information regarding order status and software downloading etc.
The main key issues of Dell are as follows:
- How to expand the business in China to fulfill the company’s objective.
- Pursuing the online retailer method with the present target group & its enhancement.
- Altering its direct model & its system of allocation as well.
- Whether Dell can develop the system of multiple channels or not.
Different key issues to reflect in the external environment are the heavy population in China and the rapidly-expanding PC and Internet practices in the Chinese market. Dell must take advantage of this attractive opportunity but by doing so it would also be faced with very intense competition and would be required to compete efficiently against giant competitors that are already operating in the Chinese market. In addition to this, Dell would also be required to look into its internal matters such as the lack of trained employees and skilled staff who are essential to carry out Internet and telephone marketing and providing assistance to the Chinese customers. The biggest difference between the Chinese and the US market is buying patterns of the customers, where Chinese customers do extensive research on the product before they buy it as they believe in spending their money on valuable products and they collect sufficient information about a product before they buy it. If Dell spreads awareness regarding its online buying services among the customers then this direct model can be key merit in Dell’s emerging market share. For achieving success in the Chinese market without having to spend a long period; Dell must-emphasize on the customers who belong to the middle economic class and the commercial class.
Direct Model of Dell
·New Value Chain:
Currently, Dell believes in a new value chain, where it does not take stocks of finished goods inventories but its competitors are following the traditional value chain. According to Flow Chart, the competitors of Dell use chart: 1, but Dell is follows chart 2. This is the unique aspect of Dell’s new chain value.
Dell can push new models into the market (usually-controlled with 60-70 days stock)so that it wouldn’t have to wait for resellers before to swipe out their inventories.
Customers are highly satisfied with Dell because it provides customization services to its customer, and the customer get their PCs customized according to their needs and requirements.
The historical rules of industry on several fronts proceeded from Dell’s computers’ direct models, such as:
- Dell operated the assembly line but all the elements are outsourced bythe company.
- Dell is shipped directly to the customer without the involvement of any retailers.
- Dell takes customized orders from its customers through phone, email, via internet
Golden Rules of Dell:
Dell is following these golden rules, such as: listening to the customers, never selling directly and having a minimum inventory.
Dell mostly customizes the products according to its customer’s need so, this process minimizes the inventory. Dell usually starts the production after receiving a customized order.
Customers can order the computer or laptop directly from Dell’s website. This website is accessible to the customers so that they could track Dell’s products easily. All customers can order online through Dell’s official website, in addition to which, they can also get their products customized when placing the order online, in order to have the product that would meet all their necessities and requirements……………..
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