Direct from DELL. Strategies that Revolutionized an Industry! By: Michael Dell. Presenters: Saad Asad Khatri M. Imran Burhanullah Wasimullah Khan. The Revolution of DELL. Who is Michael Dell? Company Philosophy of DELL What made him Successful?. Who is Michael Dell?. His Childhood
Strategies that Revolutionized an Industry!
By: Michael Dell
Saad Asad Khatri
M. Imran Burhanullah
Who is Michael Dell?
Company Philosophy of DELL
What made him Successful?
1980 Purchased first computer and takes it apart
1983 Wanted to beat IBM, Sells upgraded PCs out of UT Dorm Room
1984 Registers a company PC’s Limited with $1000 loan,
Sells Direct to end users
1986 12 MHz 285 based system. 30 day money back guarantee
1987 International subsidiary in UK
1988 Initial IPO $30 million
1989 Accumulates excess inventory
1990 First to sell through retail CompUSA, Best Buy, Wal-Mart
1991 Converts entire line to 486… high technology priority
1992 Dell included for first time among Fortune 500 roster of world's largest companies
1993 $2 Billion in sales
1994 Launches Latitude Notebook Setting new records on battery life.
1996 Customers begin buying Dell computers via Internet at www.dell.com.
1998 Solidifies internet market. $12 million per day from customers. Sets up supplier network.
1999 Dell became the number one PC company in the United
States, the largest World Wide market for personal
2000 Company sales via Internet reach $50 million per day. For the first time, Dell is No. 1 in worldwide workstation shipments. 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 United States for standard Intel architecture server shipments.
2002 Consumers choose Dell as their No. 1 computer systems provider.
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.
The Direct Model is based on direct selling
- not using reseller or the retail channel.
Direct relationship was first through telephone call then
through face to face, and now through the internet.
In the Direct Model there was just one sale force and its
totally focused through the customer.
Dell Direct Model
Ownership of the value chain
Loss of control over product &
information flow & customer relationships
Industry's most efficient procurement, manufacturing and distribution process
Pass cost savings on to customer
Model with lowest
Lower cost drives Increased demand
Competitive pricing ignites demand
The concept of DELL’s Divide and conquer was to segment the different market which ensures that each individual customer are served more effectively and efficiently.
and Reseller Inventory, Channel
Manufacturer Buys Here
With 3 Days
Dell Buys Here
Weeks Relative to Delivery
Benefits of Low Inventory
Is the Direct Business Model a new model ?
What new emerging technologies will push this further ?
Q. Is the Direct Business Model a new model ?No, its not ! – all the primitive businesses used to trade like this – today hotdog stands all over Manhattan is an example of that model on small scale
What new emerging technologies will push this further ?- SOA will help refine and innovate these and perhaps new similar kind of business models by reducing operational and transaction cost.- Web Services will remove human interaction further – reducing cost for example: - SLA will be negotiated by software agents - Vendors selection based on their expertise will be automated - Long life Lithium ion batteries increased sales- RFID tags can further streamline the supply chain, inventory and shipment tracking process