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Dell distribution network

Dell distribution network

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Dell Dell Presentation Transcript

  • By: Jagjyot Singh Chadha Shaswati Sen Poulomi Sen Priya Khurana Chaitanya Bansal
  • Introduction
    • Founded by: Michael Dell (CEO) in 1984
    • Revenue $57.4 billion (2007)
    • Net income $2.6 billion (2007)
    • Employees 90400
    • Operate in 34 countries.
    • Slogan: “Uniquely You”
  • History
    • Dell grew through the 1980 s and 1990 s to become at one stage the largest seller of PCs and servers.
    • In 1992 Dell first time enter into the Fortune 500 list.
    • In 1996 , Dell began selling computers via its web site.
    • In 1999 , Dell overtook Compaq, to become largest seller of personal computers in US.
    • In 2006 rank of Dell is 25 th in fortune 500.
    • It currently holds the second spot in the hardware computer industry behind Hewlett-Packard after the latter's merger with Compaq in 2002.
  • E E
  • Traditional Business Model
    • Dell sold its product to End user customer /corporate customers.
    • Using direct sales model via Internet and Telephone network.
  • Dell Online
    • Started in 1996
    • website www.dell.com
    • Dell online is a high success story – industry analyst
    • Millions of people visit the website each week and generate millions of dollars revenue.
    • Dell’s business model is to let the customer configure the product on the web and fulfill within 36 hours.
    • Customers can check the order status and also get the technical help online.
  • DELL’s VALUE WEB MODEL
  • DELL’s VALUE WEB MODEL Component Suppliers
  • Component supplier
    • The suppliers of high-tech components, such as microprocessors and software provided by firms such as Intel and Microsoft,
    • The low-tech, low-differentiation components manufacturers who compete on prices and availability.
  • DELL’s VALUE WEB MODEL CMs/OEMS
  • Original equipment Manufacturer(OEM)
    • The OEMs traditionally would receive all the parts from their suppliers, assemble the computers in their production lines and ship them over to their distributors, or Corporate resellers.
    • e.g. Company ‘XYZ’ receive parts from Intel (processor), Microsoft (software) then this company assemble the computer to Santech computer.
    Supplier OEM
  • DELL’s VALUE WEB MODEL Distributors
  • Distributors
    • They generally supply to corporate resellers and other distributors.
    • They carry large quantities of different products, to increase their leverage when dealing with their customers.
    • They also provide specific software, peripherals, furniture, etc, as well as service.
    • e.g. Ingram Micro, Tech Data, Computer 2000, and Santech .
  • DELL’s VALUE WEB MODEL System integrators
  • Corporate resellers/System Integrators
    • The corporate resellers or systems integrators generally buy systems directly from manufacturers and install these systems at their corporate clients.
    • These are firms whose main purpose is to provide customization to their clients.
    integrate software, hardware, and network capabilities
  • Manufacturer Manufacturer consumer commercial
  • Particular Name of companies Component parts Intel(microprocessors), Sony(picture tube), Third party hardware and software supplier Microsoft Distributors Ingram Micro, Tech Data, Computer 2000, and Santech . Retailers Wal-Mart, Office Max, Computer City, CompUSA and Micro-Center System integration Wang, Unisys, and IBM Repair and Support companies Wang, Unisys, IBM and BancTec
    • Dells model looks surprisingly simple.
    • Behind this simple model is the complex hard to imitate core capabilities developed over 15 years.
  • Benefits to company by such distribution
    • CASH: Dell maintains a negative cash conversion cycle means the payment receive for product before it has to pay for material.
    • COST:
    • Dell’s direct sales and build-to-order model has achieved superior performance in the PC industry in terms of inventory turnover, reduced overhead, cash conversion, and return on investment
    • Bypassing the reseller channel that causes further cost reduction to company.
    • CRM: Direct customer relationship is the key to Dell’s business model, and provides distinct advantages over the indirect sales model.
    • DEMAND FORECAST : Dell additional advantages over indirect PC vendors who must try to forecast demand and ship products based on those forecasts.
  • Benefits to customer by such distribution
    • Tailored offerings from Dell in terms of add-on products and services.
    • Very customizable systems at an affordable rate, since Dell manufacturing builds specifically for each customer.
  • Thank You