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Dell Evolution Dell Strategy Past to Present. Agenda. Strategy Dell Direct Model Dell.com Dell Embracing the Chanel Creating Global Business Units The New Dell. What is Strategy?.

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agenda
Agenda
  • Strategy
  • Dell Direct Model
  • Dell.com
  • Dell Embracing the Chanel
  • Creating Global Business Units
  • The New Dell
what is strategy
What is Strategy?

“The determination of the basic long-term goals and the objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals."

Chandler, 1962, Strategy and Structures: Chapters in the History of the Industrial Enterprise, MIT Press, Cambridge, Mass)

However,

“You learn the most when you make mistakes. There is no such thing as a perfect plan. Talk about what is not working and move quickly to fix it as soon as you find it,”

Michael Dell

Source for Michael Dell quote: http://onedellway.us.dell.com/blogs/gcn/archive/2011/11/11/michael-dell-opens-e-amp-y-strategic-growth-forum-2011-a-conversation-with-charlie-rose-on-nov-9-2011-palm-springs-calif.aspx

slide4

Strategy to Execution

Vision Mission Values

ELT

Strategy Objective

Change Initiatives

Planning

Sales

Front Office

Manufacturing

Customer

Support

Back Office

Demand

Supply

IT

Finance

Marketing &

Product

Development

HR

Information & Communication Flow

slide7

Build to Order Cost Benefits

Components

Purchase

Cost

Product

Assembly

Cost to Competitors

Customer Places Order

Shipment

to Distributor

Manufacturer’sInventory

Shipment

to Reseller

Cost advantage

Dell Procures Components, Assemblesand Ships

Channel Inventory

Dell Cost

8 Weeks Ago

6 Weeks Ago

4 Weeks Ago

3 Weeks Ago

Today

Time

Customer Benefits

ConsistentSupplyGlobally

Immediate Response to Customer Needs

LowestCost Consistently

slide9

2008

Dell.com - A Brief History

  • 1994: Launched as internal tech support site
  • 1996: Became commercial site with limited product set
  • 1997: Reached $1M/day in revenue
  • 1999: 1st Content Publishing capability
  • 1999: Accounted for 50% of Dell Revenue
  • 2000: Re-platform to VB and J++
  • 2001: Online technical staff moved into IT
  • 2002-3: New content publishing system
  • 2003: Code re-written to .Net, consolidation onto global code base
  • 2005:Widespread AJAX implementation
  • 2009: Completed widespread globalization
  • 2010+: Radically improve Customer Experience

2001

1996

2003

2007

2006

2011

1999

slide10

Dell Online Today

Online:

Dell.com + Premier + Global Portal + B2B + Channel Portal + eSupport + Community

725K B2Btransactionsper year

34 supported languages

Googled 1M timesper day

170M visitsto community properties

150M online resolutionsvia eSupport per day

1Bvisits per year to Dell.com

58Kchannelpartnersonline

13Bpage viewsin FY’09

An online orderis placedevery2 seconds

190KPremierPages

direct vs indirect model
Direct vs. Indirect Model
  • High costs of demand generation (marketing, sales force, after sale support etc.)
  • Higher transportation costs
  • Supply chain management and cost
  • Customer has to wait for product
  • Too complex for non expert customers
  • No ability to see or touch product if selling via net or phone
  • Direct contact with customers
  • Ability to provide customized products (build-to-order)
  • No need to share margin

Indirect Model

Direct Model

  • External sales force, marketing
  • Easier coverage of new / minor markets (sales force, customer preferences, market restrictions etc.)
  • No need to have too diverse product portfolio
  • Ability to provide a solution or consultancy
  • Customer can see or touch product
  • Lack of contact with end user
  • Supply chain management
  • Risk that reseller will not know the product portfolio well
  • Risk that reseller will prefer to sell competitor’s products (on shelf placement etc.
  • Need to share margin
dell approach
Dell Approach
  • 1984-2006
  • Pioneered direct model
  • Extreme growth, 2003 No.1 in PC market
  • Indirect business not addressed specifically
  • Changes on IT market in 2005/6
  • June 2007
  • 2008 - Now
  • “Direct model has been a revolution but it is not a religion” Michael Dell
  • Expansion into Indirect (Channel) business
  • Global Commercial Channel
  • Consumer Retail
  • New Dell : E-Dell, BVS, Client Reinvention
dell approach global commercial channel
Dell Approach – Global Commercial Channel

Premier Partners

Registered Partners

Preferred Partners

  • Entry program for most partners
  • Grants access to Dell’s partner portal and customer support
  • Access to trainings and certifications
  • Assigned account manager
  • Better return and payment conditions
  • Requires Dell certifications and minimal revenue threshold
  • Highest level of support from Dell
  • Requires two or more Dell certifications and higher revenue threshold than Preferred

Level of Cooperation

dell organization based on the customer
Dell Organization Based on the Customer

Consumer

SMB

Large Enterprise

Public

End User Computing Solutions

Enterprise Solutions

Overlay solution groups to drive strategy

Services

Corporate/Shared (Supporting Functions)

Dell strategic business units (SBU’s) aligned to customer segments

regional structure to global sbu s
Regional Structure to Global SBU’s

“We have laid the foundation for the transition from a global business that's run regionally to businesses that are really globally organized.”

Michael Dell

After

  • Global business structure
  • Lower complexity
  • Simplified hierarchy

Before

  • Regional business structure
  • High reporting complexity
  • Complex Internal Tree

Source of quote: http://www.itexaminer.com/dell-implements-restructuring-plan.aspx

major it trends
Major IT Trends

Enterprise

Consumer

  • Ubiquitous computing
  • Always On connectivity
  • Anywhere Anytime mobility
  • Mobility
  • Increasing IT Complexity
  • Cloud Computing
  • Large Data Analytics

Rapidly increasing storage requirements, services instead of in-house solutions

Rise of Smartphones, Tablets, Ultrabooks and Cloud Services

Total Industry Trends

BRIC country IT market growth, Consumerization of IT – change of traditional work/life patterns

dell s growth strategy
Dell’s Growth Strategy

Solutions that drive efficiency and flexibility for the virtual era

Efficient IT Solutions

End-User Computing

Enterprise

  • Next Gen Computing Solutions & Intelligent Data Management
  • Virtualization
  • vStart
  • AIM Systems Management
  • Modular Data Centers
  • Networking Fluid Data Architecture
  • SAN & Scale-out NAS
  • Deduplication
  • Services, Security
  • & Cloud
  • Multi-vendor support
  • BPO & applications
  • IT infrastructure outsourcing
  • Security & cloud
  • ITaaS, SaaS, PaaS
  • End-User Computing
  • Flexible & optimized value chain
  • Mobility solutions
  • Tablets & smartphones
  • Desktop Virtualization

20

dell s leadership in the virtual era
Dell’s Leadership in the Virtual Era

Key designtenets

Open

Create

Manage

Capable

Affordable

Services,

Security,

Cloud

End-user

computing

Next generation computing solutions and intelligent data

management

Deliver

21

dell customer perception evolving
Dell Customer Perception Evolving…
  • Technology
  • Enterprise

Services

  • Data center

Followers

  • Efficient
  • Reliable

Low quality

Bad service

Crap

  • Meets my needs
  • Customers

PC provider

customization

  • Mobility

Laptops

  • Thought leader
  • Solutions

Good

Computers

Dude

Innovation

  • Best customer service

Reliable

Desktops

  • High quality
  • Innovative
  • Virtualization

Poor quality

Service

  • Outcomes

Affordable

OK

Old

Services

Quality

Good

  • Cloud
  • Services

Followers

Great

Home

  • Infrastructure

Inexpensive

Value

  • IT leader

Manufacturer

  • Smartphones
  • Trustworthy
  • PCs

Cheap

  • Tablets

Present

Future

key takeaways
Key Takeaways
  • Dell has adapted its strategy to better serve customers several times throughout its history
  • Examples presented in this session include:
    • the Direct Model on which the company was founded
    • Leadership and pioneering in E-Commerce (Dell.com)
    • Embracing the channel – revisiting the direct model
    • Creation of global SBU’s aligned to customer segments
  • The strategic shift happening now is the transformation of Dell into an end-to-end solutions provider.