Dell - charter.net
Transcript Dell - charter.net
Selling Directly, Globally
1983 by Michael Dell at age 18
Began selling upgraded PCs and add-on
components from a dorm room at the University
In its 15th year of operation
Ranked 2nd in the US and worldwide PC market
1985, Dell was a $6.2 million business
In 1996, Dell began its Internet approach
Dell expanded to $21.7 billion in 1999
Computer Corporation became official in May 1984.
It was founded on the Direct Business-to-Consumer
It is the fastest growing among all major computer
systems companies worldwide.
Michael Dell is the youngest CEO of a Fortune 500
In July 1999, Dell became the #1 PC Vendor to
businesses in the US
Consumers: small to medium sized
businesses in the US market
Location: In the US, UK and 14 international
subsidiaries by 1999
sales offices in 33 countries
Served customers in more than 170 countries and territories
around the world
presented a medium which Dell used to enhance its
direct sales approach
24 hour on-line technical support, order status information,
and downloading of software
remains #1 in China
is adopting the just-in-time delivery mode
IBM, HP, and Compaq establish plants in China
were uncomfortable using credit cards online
thus hurting online sales
Shipping in US and worldwide: Compaq, IBM, HP,
Competition in China’s PC industry in 1999:
can call or access Dell’s website and
order a customized computer in less than 10 minutes.
A customer then has a number of methods to contact
Dell’s technical support such as the phone, online
and on-site repairs should a problem arise.
the Chinese socioeconomic
price of a PC was the equivalent of two years of
a person’s savings.
Retail buyers only accounted for 10% of sales.
increase market presence in China, the
second largest PC market in the world
PC Industry had seen extraordinary growth
between 1990 and 1996.
had a good chance of increasing its
presence in the Chinese market by introducing
the Direct Model.
Red Tape with
the Chinese Government
nationalistic policies made US companies
operating in China vulnerable to the ups and downs
of Sino-American relations.
The Chinese government made no secret than
national PC vendors would be promoted.
Direct sales operations
Just-In-Time inventory usage
Differentiation from competitors.
Consistent sales growth
Cutting out the cost of distribution
through distributors and adding value resellers
Products and Service
direct sales approach
exactly what customer wants
Free installation of applications software
Timely delivery of orders
Comprehensive on-line purchasing tool
Order status information
On-line downloading of software
Building a business solely on pricing
yes, and partially no.
Dell could not succeed its business compared to the other
factors affecting Dell’s direct-business model in
with credit card sales
Costs of enforcing the direct model took a sizable chunk away
from Dell’s earnings
Future potential for Internet growth was huge