Dell is the #1 computer systems company-Michael Dell
Company sells build-to-order computer systems directly to customers(consumer as well as corporate)
In 1993 the company began trying to sell to retailers because everyone else was ,but due to poor retail channel customers were dissatisfied and Dell finally abandoned the retail channel .
Dell put most of its resources into building relationships with its most profitable customers.
Dell manages its corporate clients with a top-notch sales team
Customers can chose what components they want for their computer, Dell assembles the order & ships it. This strategy improves customer satisfaction & reduces costs & risks to the company.
Through the use of PremierDell.com web page, the company has created a 24/7 order – entry system.
Michael Dell was invited by auto-manufacturers to speak.
“ We have a tremendously clear business model “ kjbjkbk - MICHAEL S DELL
PC can be built & sold directly to customers ; by doing this Dell could address their specific needs & provide the best computing solutions to meet those needs leading to :-
a)Reducing marketing & sales cost by eliminating markups of distributors & retailers
b)Built-to-order reduces the cost of inventory & risk of retaining excess inventory.
Price for Performance - Efficient procurement , manufacturing & distribution process – hence powerful systems at low price.
Customization :– Built-to-order systems to meet specific needs according to customer specifications.
Reliability , Service & Support:-Direct customer interaction allows Dell to provide top-notch service before & after sale. This strategy improves customer satisfaction & reduces cost & risk to the company.
The money is received well in advance & hence financial stability is more.
PremierDell website where all information regarding products can be viewed(Automated 24//7 system built-to-order.
People who are not very tech-savvy could not use the order mechanism due to absence of technical know-how.
In case of massive orders Dell would be unable to produce at that instance due to unavailability of finished products in the inventory.
People did not get hands on experience on the finished product and hence the concept of trying out different products and then finalizing one did not arise.
Dell did not put much attention to the non-corporate sector and hence lost out on a major chunk of its prospective users.
Components are delivered just minutes before the order, hence if the time taken to get the components is more , the process of making the machine is delayed & hence dissatisfaction.
In spite of being a market leader , Dell acted more as an follower(“In 1993 the company began trying to sell to retailers, mainly because everyone else was”)
Opportunities & Threats: -
A) Dell is the market leader in computers and it could well have used this brand image to tap the Non corporate segment.
B)When Michael Dell was invited by car manufacturers to speak, he could well have use that opportunity to tap a new segment ( eg. Computerized car navigation system ) & hence diversify its Portfolio.
Dell’s attitude to just concentrate on the corporate market was a threat as a part of the market segment remained untapped.
Dell did not have finished products .
Lack of proper distributor channel.
a)They targeted all segments of the market
b)Had finished products
c)Had proper distributor channels.
KEY ISSUES :-
Dell did not have a distributor channel & hence the concept of push- selling by retailer was not there.
Dell mainly targeted the corporate segment & hence a major segment of the market, i.e. non corporate remained unattended to.
Unavailability of finished products in the inventory could lead to not being able to deliver in time in case of massive orders bound by a strict timeline.
Dell could have been able to diversify their portfolio and delve into the automotive industry (by laying the foundation for Automated Car Navigation system)
Dell started retail because everybody was doing so and this very attitude made Dell more of a follower in spite of being a leader in the computer segment.
The whole build-to-order mechanism was suited for tech-savvy people and hence people not so conversant with computers faced difficulty while placing the order . Also ordering over the internet without seeing or trying out the product might lead to less number of buys.
First of all, Dell needs to target less tech-savvy people who don’t have good knowledge about computers as well as non-corporate clients.
Secondly, some stores can be opened wherein specialized personnel would be there , who would resolve all query regarding available components as well as help to decide on the final buy . Also few demo finished products can be there for customers to try hands on.
Third, add more information about the components so that even low-tech people could understand.
Fourthly the car market segment can be tapped as Michael Dell was a guest speaker there & they have faith in the brand called Dell & this faith can be used for portfolio diversification.
Fifth, Kiosks can be placed at strategic positions (eg. City centre or Town hall or Subways ) with option of placing the order as well as with detailed description of the components in simple language for the common people to understand.
Information workshops can be made for creating awareness.