History of DELL Michael Dell: Chairman of the BOD and Chief Executive Officer of Dell Founded in 1984 with $1,000 Started with a simple concept: selling computer systems directly to customers In 1992, Mr Dell is the youngest CEO to earn a rank in the Fortune 500
DELL: Objectives Five tenets to superior customer value: A direct relationship: the most efficient path to the customers Custom built products and custom-tailored service: the most effective way to meet customer needs Standardised technologies: best value to customers Low-cost structure: cost savings passed to customers in form of lower prices Deliver added value to customers: customers able to obtain highest return on their investment in IT products and services
Competitive Advantages Direct model success Technology and IT Short delivery time Affordable prices Superior customer service Expansion into new products Customer-driven research and development
DELL: Vision Concept: Direct Customer Contact -> Made DELL a successful company Delivering the best possible customer experience -> By directly selling com products and services online and through catalogs.
Internal Capabilities 1. Cost-Efficient Build-To-Order Manufacturing - None were produced for inventory - Unlike competitors, DELL does not apply the traditional value chain model 2. DELL’s Direct Sales Strategy and Marketing Efforts - DELL’s ability to respond quickly gave it a significant advantage - Direct sales approach = Customer- driven system
Internal Capabilities 3. Customer Service and Technical Support - Is a feature of DELL since 1986. - Online technical support tools to reduce cost of telephone support calls
Internal Capabilities 4. Expansion into New Products - Diversify the company’s product base 5. Entry into the White-Box PC Segment - Cheaper to reach many small businesses through the white-box dealers
External Relationships 1. DELL and Its Customers - Focuses on customers’ needs and wants towards the products. - DELL’s R&D was customer-driven. 2. Partnership with Suppliers - Best suppliers were picked - Partnership remains as long as their performance, cost, quality and leadership in technology is maintained
Issues in DELL & the Recommendations In April, 2010. DELL did not disclose proper information in its advertising (ie. No shipping charges mentioned). - Brian, New York - Customers have rights to know about what they purchase. - DELL should inform every cost available in its products. Hidden costs are not a good function in businesses.
Issues in DELL & the Recommendations Orders got messed up through phone-ordering services. Customer service was bad over the phone. - Kenneth, New Jersey - Despite having an efficient online customer service, DELL should not forgo its customer service in other dimensions (ie. phone). - Certain customers still do not prefer being served online.