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DELL Case Study: Dell Direct
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Transcript of DELL Case Study: Dell Direct
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Supply Chain Management1
2013.4.18
Susie
Riri
Dell Inc. Case Study : Dell Direct
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Table of Contents
Storytelling
-History of Dell
-Case Questions
Analysis-Who is Dell?
-External Analysis
- Internal Analysis
Conclusion
-Summary
-Implications
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1976, Stephen Wozniak & Steve Jobs, Apple computer
1980, IM, !pen architecture, o!the!shel component! "S #os rom "S! $ntel 8088 microprocessor! %anon isk rive! 'omputerlan an Sears (usiness as )etailers
1981, $(" commane *+ o -' market share .hileApple/s share .as riven o.n to +0
Structure o the computer inustr erticall!inte2rate corporations !3 "!ri#!ntal $slices% Silicon platorm 4 'omputer platorm 4 Sstem sot.are 4 -acka2e application
%his structure enable $("!-' 5clones like 'ompa,e.lett -ackar ne o them .as D&'' 'omputer 'orp:
(ers!nal C!mputer
Storytelling
Questions
Conclusions
Analysis
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Dell "ist!ry
$25265M$25265M
Birth &Chilhoo
!rofitless"ro#th
Explosi$e"ro#th
4
%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))
$69.5M$69.5M $546M$546M
$3,475M$3,475M
%
Storytelling
Questions
Conclusions
Analysis
0et 1e$enue2in 3illion 45
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Birth &Chilhoo
!rofitless"ro#th
Explosi$e"ro#th
5
%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%
Storytelling
Questions
Conclusions
Analysis
0et Income2in 3illion 45
#ell 'orp: 198;,
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Birth &Chilhoo
!rofitless"ro#th
Explosi$e"ro#th
6
%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%
Storytelling
Questions
Conclusions
Analysis
0et Income2in 3illion 45
Dell : irth ) Childh!!d *1+83 , 1++0-
Support services such as 24h!ur
h!tline an 2uarantee shipmento replacement part
/uality at a reas!nale price
#ell 2re. rom nothin2 to @?00"sales in 1990
"ichael #ell became the richestperson in %e>as
$nternational >pansion to serve touropean, mile eastern an
Arican markets
Simplicity
&iciency
gility
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Birth &Chilhoo
!rofitless"ro#th
Explosi$e"ro#th
7
%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%
Storytelling
Questions
Conclusions
Analysis
0et Income2in 3illion 45
#ell/s moel bein2imitate b other
nterin2 )etail
(ooke their irstloss in 9;/
Dell : (r!itless r!th *1++0 , 1++4-
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Dell "ist!ry
Birth &Chilhoo
!rofitless"ro#th
Explosi$e"ro#th
8
%' %( % %) %)* %)+ %), %) %). %)/ %)' %)( %) %))%
Storytelling
Questions
Conclusions
Analysis
0et Income2in 3illion 45
Baunchin2 ...:ell:com
"e thin# about internet commerce as alogical extensions of our direct
model$&ecause we're all about
shrin#ing the time and the resources it
needs to meet customer's need$
$nternet increase eicienco sales process an service
>tranet to let supplier shareinormation .ith #ell
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Case /uesti!ns
What oes #ell o .ell an .here oes it stru22leC
What contribute to #ell/s success an rapi 2ro.th in thelate 1990/sC
What is #ellC A computer manuacturerC A consumerelectronics companC An $% service partnerC What is theirocusC
What i #ell o to set itsel apart rom the competition inthe hi2hl competitive an rapil evolvin2 personalcomputer inustrC
o. i #ell se2ment its customersC What tpes ocustomersC What .ere the likeC
What are the avanta2es o this irect marketin2 anirect manuacturin2 moelC
Storytelling
Questions
Conclusions
Analysis
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nalysis : 5h!6 ) 5hat pr!lems6
Who is #ellC
'omputer "anuacturer DAssemblerEF $% service partner
i2h technolo2, Short lie ccle
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nalysis *M&C&-
Storytelling
Questions
Conclusions
Analysis
&7ternal
&nir!nment
5hen6
5here65hy6
"!6
Internal
C!mpetence
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nalysis *M&C&-
Storytelling
Questions
Conclusions
Analysis
5hen6
5here65hy6
"!6
S59 nalysis
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&7ternal nalysis *(&S-
When & Where H 1980sI1990s, in =:S:
Categ!ry Issue hreats;9pp!rtunities
-olitical !2overnment D90sEpportunit $ncrease in Kovt:
spenin2 on $% inra
conomic=:S: conomic )ecover D80sE
=:S: conomic (oom D90sE
pportunit companies aniniviuals spen more on $%
Social
)isin2 incomes an eman or$% in Asia, urope, "ile ast
pportunit ! L o .orl/spopulation, ne. market
'han2e rom $nustrial Societto $normation Societ
pportunit increasin2eman or servers an net.ork
2ear
%echnolo2ical
>plosion in ata inormationan content D1-'M1-ersonE pportunit increasin2
emanWWW era opene
Storytelling
Questions
Conclusions
Analysis
Bot/s opportunitiesNN
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&7ternal nalysis *(!rter!rces-
Storytelling
Questions
Conclusions
Analysis
'omputer $nustr
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nalysis *M&C&-
Storytelling
Questions
Conclusions
Analysis
5hen6
5here65hy6
"!6
S59 nalysis
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nalysis : Internal nalysis *"(-
ReduceChannel
Costs
Why?
Ho#?
MinimizeInventory
Speed ofExecution
(JIT)
irectCustomerRelation
Close
Relation!"
Suppliers
Initiatives
#)irect Model$)Customers %Se&mentation
')
Simplicity6 Efficiency6 A7ilityStorytelling
Questions
Conclusions
Analysis
e! Sales
SecureCustomer
s
IncreaseE*ciency
+uildTi&ht
Relations
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Initiatie 1. Dell Direct M!del
$nirect 'hannels
)eseller 'ustomize the -' to customerreuirements, installe components an provieaitional service an support
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Initiatie 1. Dell Direct M!del
#irect "oel
(passin2 the ealer channel, sellin2 irectl toconsumer ecution an "inimum $nventor
'haracteristics o #irect "oel liminate costs & risks o carrin2 lar2e inventories J$%" H hi2h velocit, reuce channel costs rom 1? to + o
prouction revenue #irect customer relationship Batest tech: introuce aster than inirect channels =se $% to control value chain an achieve a hi2h e2: o
coorination (uil!to!orer
uil!"to"#r!er
Storytelling
Questions
Conclusions
Analysis
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Initiatie 1. Dell Direct M!del
Manuacturing (r!cess Oo Warehouse Space
?! inent!ry other than .ork in process DW$-E 'omponents arrive rom suppliers@ust in time !rmanuacturing throu2h the actor/s car2o oors
"anuacturin2 is snchronize to avoi storin2 parts orinishe sstems %his needs cl!se relati!nship ith suppliers #ell has small numer ! suppliers even reuce number rom +0* in 199+ to *7 in 1997 rust"anuactures like Son, Bo2istics like =-S
P ?! test time
SS CCMMStorytelling
Questions
Conclusions
Analysis
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Initiatie 1. Dell Direct M!del
'ustomer Service >irst !nsite serice !r (C it
1,;00 technicians, accessible b phone +* hours a a 90 solve b standard tr!ulesh!!ting pr!cedures
mplos hirdparty maintenance pr!iders like =niss,Wan2, #ecision one consultin2 an #i2ital uipment %i2ht coorination .ith maintenance proviers eels liAe
Bust !ne large c!mpany
$n 'omputer.orl/s 1998 surve #ell ranke irst in usersatisaction ollo.e b Kate.a
SS CCMMStorytelling
Questions
Conclusions
Analysis
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Initiatie 1. Dell Direct M!del
(uil!to!rer H -ros & 'ons
dantages Disadantages
Sellin2 irect to customers cuts !utthe middleman, .hich increasesDell
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uildt!9rder *?! and hen-
Storytelling
Questions
Conclusions
Analysis
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nalysis : Internal nalysis *"(-
ReduceChannel
Costs
Why?
Ho#?
MinimizeInventory
Speed ofExecution
(JIT)
irectCustomerRelation
Close
Relation!"
Suppliers
Initiatives
#)irect Model$)Customers %Se&mentation
')
Simplicity6 Efficiency6 A7ilityStorytelling
Questions
Conclusions
Analysis
e! Sales
SecureCustomer
s
IncreaseE*ciency
+uildTi&ht
Relations
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Initiatie2 : Cust!mer Segmentati!n
Storytelling
Questions
Conclusions
Analysis
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Initiatie2 : Cust!mer Segmentati!n
Storytelling
Questions
Conclusions
Analysis
P #ell
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Initiatie3 : 555
Storytelling
Questions
Conclusions
Analysis
Increase Efficiency of Customer Ser$ice
Buil 1elationship #ith Supplier 2Extranet5
"e thin# about internet commerce as a logical
extensions of our direct model$&ecause we're all
about shrin#ing the time and the resources it needs to
meet customer's need$
he real potential of internet is its ability to transform
relationships within traditional supply chain and to create
value that can be shared$
t's more valuable to be in front with
imperfect internet implementationrather than to be a late comer with
the perfect website
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nalysis *M&C&-
Storytelling
Questions
Conclusions
Analysis
5hen6
5here65hy6
"!6
S59 nalysis
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Summary : C!re C!mpetence
C!mpetency Descripti!n
uild t! !rderP Allo.s or J$%, keepin2 inventor costs o.nP Reepin2 manuacturin2 in!house enables c!ntr!l
! uality an aster ne prouct releases
Direct t! SalesP Cuts !ut retail marAupP "aintain higher pr!it margins an lo.er price
alue addedserices
P #o not ust sell prouct, sell values
P -roactive in solvin2 clients painP 'ustomer services like sot.are o.nloain2
dierentiate#ell rom competitors in (+( market
Internet C!upledi#. M!del
P Sell irectl to en customersP #ell .as much less mature compare to $("M-
.hen $nternal took o, less eorts to aapt sstem
Storytelling
Questions
Conclusions
Analysis
$(" an -/sH prouct innovation & evelopment #ell/sH e>pertise in assemblin2 an caterin2 business nees
PTello.H -ossible or competitorsPKreenH er iicult
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C!nclusi!n
Storytelling
Questions
Conclusions
Analysis
P #ell/s
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Tan% &ou'
:;he only constant thin7 a