پرونده شرکت دل (ِDELL)-روزانه 9
DELL AT A GLANCE
The Company
Dell Inc. listens to customers and delivers innovative technology and services they trust and value. Uniquely enabled by its direct business model, Dell sells more systems globally than any computer company, placing it No. 34 on the Fortune 500. Dell's climb to market leadership is the result of a persistent focus on delivering the best possible customer experience by directly selling standards-based computing products and services. Revenue for the last four quarters totaled $57.5 billion and the company employs approximately 88,100 team members around the globe.
Dell was founded in 1984 by Michael Dell, the longest-tenured executive to lead a company in the computer industry. The company is based on a simple concept: by selling computer systems directly to customers, Dell could best understand their needs and efficiently provide the most effective computing solutions to meet those needs. This direct business model eliminates retailers that add unnecessary time and cost, or can diminish Dell's understanding of customer expectations. The direct model allows the company to build every system to order and offer customers powerful, richly configured systems at competitive prices. Dell also introduces the latest relevant technology much more quickly than companies with slow-moving, indirect distribution channels.
The Dell Effect
For more than 20 years, Dell has revolutionized the industry to make computing accessible to customers around the globe, including businesses, institutional organizations and individual consumers. Because of Dell's direct model—and the industry's response to it—information technology is more powerful, easier to use and more affordable, giving customers the opportunity to take advantage of powerful new tools to improve their businesses and personal lives.
Dell has demonstrated this effect time and again as it enters new, standardized product categories, such as network servers, workstations, mobility products, printers and other electronic accessories. Nearly one out of every five standards-based computer system sold in the world today is a Dell. This global reach indicates our direct approach is relevant across product lines, regions and customer segments.
Balancing Liquidity, Profitability and Growth
Dell's high return to shareholders has been the result of a focused effort over time to balance growth with profitability and liquidity. Dell has consistently led its largest competitors in each of those categories.
DELL HISTORY
1984
Michael Dell founds Dell Computer Corporation
1985
Company introduces the first computer system of its own design; the Turbo, featuring Intel 8088 processor running at eight megahertz
1987
Dell is first computer systems company to offer next-day, on-site product service
International expansion begins with opening of subsidiary in United Kingdom
1988
Dell conducts initial public offering of company stock, 3.5 million shares at $8.50 each
1990
Manufacturing center in
1991
Introduces its first Latitude notebook computer
1992
Dell included for first time among Fortune 500 roster of world's largest companies
1993
Subsidiaries in
1995
$8.50 shares of Dell stock worth $100 on presplit basis
1996
Dell opens original Asia Pacific manufacturing center in Penang, Malaysia
Customers begin buying Dell computers via Internet at www.dell.com
Dell begins major push into network-server market
Company added to Standard & Poor's 500 stock index
1997
Dell joins ranks of the top-five computer system makers worldwide
Dell ships its 10-millionth computer system
Per-share value of common stock reaches $1,000 on presplit basis
Dell introduces its first workstation systems
Dell launches its
1998
Company expands manufacturing facilities in the Americas and Europe, and opens a production and customer center in Xiamen, China
Dell introduces its PowerVault storage products
1999
Dell opens second major U.S. location in Nashville, Tenn.
Dell opens manufacturing facility in Eldorado do Sul, Brazil, to serve Latin America
Dell introduces "E-Support Direct from Dell" online technical support
2000
Company sales via Internet reach $50 million per day
For the first time, Dell is No. 1 in worldwide workstation shipments
Dell introduces PowerApp appliance servers
Dell ships its one millionth PowerEdge server
2001
For the first time, Dell ranks No. 1 in global market share
Dell is No. 1 in the
Dell introduces PowerConnect network switches
2002
Dell names its Austin Manufacturing Campus the Topfer Manufacturing Center
Dell ships its 2 millionth port in the PowerConnect line of network switches
Dell ships its first "blade" server, introduces a standards-based point-of-sale offering for retail customers and enters the projector market with the introduction of the 3100MP projector
2003
Dell introduces printers for businesses and consumers
Dell launches Dell Recycling to enable customers to recycle or donate to charity computer equipment from any manufacturer
The name change to Dell Inc. is official, reflecting the evolution of the company to a diverse supplier of technology products and services
2005
Dell tops list of "America's Most Admired Companies" in Fortune Magazine
Opens third major U.S. manufacturing location in Winston-Salem, North Carolina
2006
Dell ships more than 10 million systems in a single quarter (Q4, FY06) for the first time in its history
2007
Michael Dell returns as Chief Executive Officer
Dell opens second Brazil manufacturing facility in Hortolandia
Customer-Driven Innovation
Since the very first Dell PC was introduced in 1986, Dell has continued to shape the industry, breaking new ground and pioneering critical developments in home, small business and enterprise computing. Dell's R&D efforts now span the globe, driven by some of the industry's foremost product designers and engineers. At the core of Dell's innovation approach, however, remains an unwavering commitment to delivering new and better solutions that directly address customer needs.
We gather requirements directly through tens of thousands of customer interactions daily, organized events, and customer panels. Partnerships with a wide variety of key industry software, hardware and component suppliers give us a uniquely broad perspective on the computing landscape.
Many innovations begin in-house, led by a global team of top engineers, product designers and technical experts. Others begin as a team effort with Dell's strategic partners. The mission is to deliver innovative and cost-effective solutions that meet today's real-life customer challenges and work seamlessly in existing environments and with other products.
Dell is uniquely positioned to impact industry trends. We maintain strong internal development capabilities. We partner, rather than compete, with top industry technology suppliers and original development manufacturers. We steer enabling industry standards and technologies through industry groups and strategic partners. In this way, Dell spurs innovation and delivers value to customers.
Top of Form
Bottom of Form
World’s leading computer maker Dell is finding itself in troubled waters these days. After loosing Numero Uno position in PC sales to HP [link](Since margin is very less the position keeps swinging...this report says Dell has regained its position), after founder Michael Saul Dell taking over as CEO, Dell appears to be uncomfortable with its legendary Direct to Customer Business Model and is reportedly considering opening retail stores/appointing resellers to promote business. (Ref: Business Standard dated 18-May-2007)
Quick Background:
The main difference between Dell and its competition is that Dell has no middlemen, no resellers, no company showrooms. A prospective customer deals directly with Dell (by phone or website), and gets his/her computer delivered home by Dell. This results in lots of cost saving (which otherwise would have been spent in running a showroom, dealer/reseller’s commission, inventory carrying cost etc) and most of the savings are passed directly to the customers, making Dell products always cheaper than competition for any given configuration. Because of this advantage Michael Dell and his company was able to steal millions worth business from IBM and other PC vendors and reach top of the chart within decades.
There was a time when Dell was envied by rest of the competition. Most of them tried to imitate Dell’s Direct to Customer Business Model while retaining their existing sales stream and failed pathetically (because it is not feasible to mix conventional sales channel with Direct model). IBM eventually had to sell its PC business to Chinese based Lenovo, Compaq merged with Hewlett Packard. These companies worked hard to achieve cost efficiency and brought down the cost advantage Dell hitherto had, by increasing sales volume and by increasing operational efficiency. They had the backing of a robust sales and distribution network which Dell never had. All these factors have eventually led to Dell loosing its Business and suffering losses.
So should Dell change its Business Model? What are the advantage and disadvantage Dell has over its competition? Pros and Cons of dealing direct with Dell...
1 Cheap product: Dell’s products have always been cheaper than competition for given configuration, due to Dell’s unique business model (explained in Part 1), hence a cost conscious customer would always prefer Dell.
2 Highly Customizable: Just like an assembled PC, Dell allows its customers to choose the exact configuration they want and pay for only those features required. Other PC vendors usually release several pre configured models which can not be customized beyond a limit. (I find that even Dell customization has some limits, explained later)
3 Built to Order: Dell units are assembled only after an order is confirmed. This gives you fresh technology, directly from factory to your home. In other companies, products do spend some time in shelf, in factory, in warehouse, with distributor/reseller etc before you pick it up.
Disadvantages:
1. You can’t see or feel the product before buying.
2. You can’t just lift a model, pay and take home. You will have to wait for few days to few weeks from the time you decide to buy and till it gets delivered.
3. No service centers where you can take the system and get it repaired. You need to fix the system using telephone help given by Dell
Here are some simple reasons why Dell’s popularity is declining over a period of time…(Prices are quoted in INR)
Note: Majority of Dell's business comes from huge corporate accounts who continue to prefer Dell. Below points are from a viewpoint of an individual customer (Home users, and SMEs (Small and Medium enterprises)...
1. Fall in price deference: Because number of units of PC/notebook being sold has increased, the additional expenses Dell’s competitors had is getting leveraged across a large number of units, hence the additional expense per unit is minimal (Assume Rs 30000 per month is spent in running a showroom. If only 1 Notebook is sold then this entire 30 k needs to be recovered from this one notebook, in which case Customer will not buy at all (if he has to pay 30K extra for no apparent reason), if just 30 units are sold per month, each would have costed Rs 1000 extra (In this case customer will weigh his options and may or may not choose to buy from that shop), while if 100 units can be sold per month, extra cost per unit is just around Rs 333 which is negligible for a 30k to 50k product and the customer will not hesitate to buy. As other vendors are reducing their margin and focusing on volume, the Dell’s advantage in terms of cost is falling.
2. Non technical customers: Traditionally those who used desktops and notebooks were technical (Hardware/Software professionals) people who had enough technical understanding of the product so that they could understand the configuration, could use, maintain or do simple trouble shooting themselves with minimal help and choose Dell mainly because of cost advantage. But of late computers have become very common and everyone can afford to own it. But many people who are not well versed with computer architecture (say people like Doctors, lawyers, accountants) would rather choose to physically see a laptop in a showroom, see if the performance and features are good enough for them and then buy then and there. In other words, not everyone can decide between complex system configurations.(Dell website gives some basic explanation, which is not good enough) Most of us have simple understanding that higher the numbers better the configuration, few of us have understood that Dual Core is better than Solo (Thanks to Intel’s intense ad campaign), but tell me, can you suggest me which one should I choose out of Intel Centrino T5300 (1.73 GHz, 533 Mhz FSB) and T5500 (1.66 GHz, 667MHz FSB)? We’re used to measuring clock speed, but few realize why FSB is critical. Is Core Duo sufficient or should insist on Core 2 Duo? What about Sata Rosa? Without physically experiencing, can you tell me if geforce 7400 is enough for the games I intend to play or do I really need 7600 (They are 256MB and 512 MB graphics card from NVIDIA respectively). Microsoft says 512MB RAM is minimum for VISTA, while PC vendors suggest 1GB. Shall I go with 1GB or should I really invest another 10k and opt for 2GB? Unless one has some technical understanding, deciding on a optimal configuration is very challenging. If you accept all recommended configuration at Dell’s website, the price almost doubles the initial quotation. So many people who do not understand much of system hardware prefer Non Dell brands, partly because they can check the product before buying, and partly because they go by resellers recommendation.
3. Lead time: people want everything fast and instant these days. If it takes week’s time from the time they decide to buy and till the product gets delivered, it discourages them.(It takes 10 to 30 days depending on mode of payment, availability of parts etc) Lot of things may change in the meanwhile: I may change my mind, I may get a better deal elsewhere, technology may change, price may fall, but once you commit, it is near impossible to change.
4. Dell discourages down selling: While choosing the configuration, Dell tempts you to go for higher configuration (This is called up-selling) but heavily discourages you from choosing lower configuration. For example, they give you an option to upgrade to Windows Vista Home Premium from Home Basic but do not allow you to choose Windows XP (which should be cheaper than
Also I found while customizing an Inspiron model that for a T5300 based system, I have no option of choosing a 533 MHz RAM and I have to opt for 667 MHz RAM only. (A 533 MHz FSB processor can’t make full use of 667 MHZ RAM and I would rather save some money by opting for 533 MHz RAM, but I don’t have that option.
5. Limited Customization:
Note: Whatever I write below is based on the experience I had at Dell website while attempting to customize. Once you raise a request Dell Inc will assign an executive who will facilitate further customization, which may nullify some of the points mentioned in point 4 and 5.
Latitude model has finger print reader option but Inspiron series doesn't. Similarly you'll face many such restrictions when you try to customize your Dell. In most of the cases I dont have an option of choosing 1 Signle memory of 1 GB (instead of 2 x 512 MB layout)(What difference does that make? It makes lot of difference while upgrading: Motherboard will have 2 RAM slots - if both are occupied by one 512 MB RAM each, if I have upgrade later from 1GB to 2GB there'll be no free slots, while if I opt for one single RAM of 1GB, second slot will be free)Ideally Dell should allow me to customize A to Z with any possible combination (as long as the combination is feasible), but that is not the case.
So there're many limitations in Dell's customization and it might discourage few, who are very specific about what they want.
6. No fancy features: Dell has been very very slow in introducing most of the value added features its competition has incorporated (Such as face recognition of Lenovo, fingerprint recognition, Swivel Monitors and Tablet PCs by HP, detachable DVD drives of thinkpad, Blu Ray Disc reader by Sony Vaio etc). So except that you have the option to choose highest possible configuration, there won’t be much you can boast about your Dell machine. (Dell will be launching Tablet PCs by end of 2007 in India, Dell Latitude model has an option of Finger print reader, XPS model comes with rotating Webcam, and Dell would soon launch ATG in India (All Terrain Grade rugged notebooks which meet military standards in their build), but most of them are not available in combination.
June 27, 2007 update: Dell's new inspiron 1420 series (and 15xx series) is featuring multi colour bodies and also Blu Ray writer option (at INR 32000, not sure how many will opt for it), Some Dell Latitude Models have some unique features like analog battery meter (to check how much power is left, without having to switch on the notebook) and Wi-Fi detector, which blinks when a network is available...
7. No service centers. Today most of the people who use PCs and notebooks are non technical people, who do not have the time, patience or technical skills to fix a problem in their system themselves. While techies would even enjoy troubleshooting and experimenting on their systems themselves these people would rather hand it over to a service centre person, tell the problem they face and get it fixed by experts. But dell expects everyone to fix their problems by internet/telephonic information. Most of the people are not comfortable with this option and do not even give Dell a consideration since it doesn’t have a physical presence (I read somewhere that Dell has tie up with Wipro and PCS in India to provide service to Dell customers, but not sure of this as I dont find anything official about it)
8. Increasing non corporate, non technical customers: So far, majority of Dell’s customers were corporate accounts, who had dedicated departments to take care of Computer Hardware. But of late individual consumers who buy a PC/laptop for personal use are on the raise and for these people, after sales support is a primary consideration, in which Dell fails to impress. These individuals approach a consumer electronic showroom or such shops while buying laptops and salesperson there shows all available models but never mentions that there’s a company called Dell. Even if customer enquires, he tries his best to discourage a prospective buyer from opting for Dell, by highlighting all disadvantages of Dell. So not having some ground staff to promote Dell is diverting several potential customers.
9. No finance options: Today many people buy goods on credit. In any showroom you can find one representative of some finance company readily available, if you prefer credit. If Dell expects everyone to make full payment upfront (even before one sees their product and wait for weeks. It doesn’t give easy credit options, and this diverts another set of potential customers (Dell do have Dell Financial Services in some countries. But I don’t think that is operational in
10. No one to bargain or argue with: Most of us love to bargain with the shopkeepers and feel happy if we can get some extra discounts/some freebies. Also if somethin goes wrong many people prefer to walk into the showroom and question the people there. With Dell, these are difficult. (Dell will assign a salesperson to assist you in executing your order with whom you can bargain a bit. And if something goes wrong and Dell refuses to fulfill its obligations (extremely unlikely, I'm just exporing a possibility) legal actions are very difficult since the sales is purely online
Note: Dell's credibility has been very good, and most of the customers are happy with Dell (except few business users who are using the notebooks given by their company which doesn't fit their personal usage needs). Dell does good pre sales and post sale follow up and keeps its customers happy. Dell is setting up an assembly unit in India (in Chennai) which is expected to be operational from late 2008 (Currently Indian orders are assembled in Malasia and shipped to India, Dell products should be further cheap once they're assembled in India)(Note: The Hindu report dated 26th June 2007 says Chennai unit will be operational within months, my sources indicate it may take longer. This post doesn't intend to discourage people from buying Dell, but only analyses why potential customers may not prefer Dell.
