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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