Dell Vishal

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Dell Vishal

  1. 1. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Company Report
  2. 2. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations PRESENTED BY : DEEPA : KADAMBARI : ASHA : VISHAL
  3. 3. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Mission & Strategy Statement • Mission Statement: “To provide customers with superb value, high quality, relevant technology, customized systems, superior service and support, and products and services that are easy to purchase and use.” • Strategy Statement: “To do business with its consumers one-on-one, through the phone or internet.”
  4. 4. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Timeline 1980 Purchased first computer and takes it apart 1983 Wanted to beat IBM, Sells upgraded PCs out of UT Dorm Room 1984 Registers Dell Computer Corporation DBA PC’s Limited Sells Direct to end users 1986 12 mhz 285 based system. 30 day money back guarantee 1987 International subsidiary in UK 1988 Initial IPO $30 million 1989 Accumulates excess inventory 1990 First to sell through retail CompUSA, Best Buy, WalMart 1991 Converts entire line to 486… high technology priority 1993 $2 Billion in sales
  5. 5. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Timeline 1994 Launches Latitude Notebook Setting new records on battery life. 1996 Introduces Power Edge servers for small and medium server markets 3 Solidifies internet market. $12 million per day from customers. Sets up supplier network. 4 Revenue hit a record $25 billion. 5 Sales topped $30 billion. 6 Annual sales passed $40 billion. 7 Dell launched XPS, a line of high-performance. 8 Annual sales hit a record $55.91 billion. 2006 Dell shares fell 4.7 per cent.
  6. 6. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Company Overview • Headquartered in Key Statistics Round Rock, Texas Company Type Public (NASDAQ: DELL) Fiscal Year-End January • Founded in 1984 By 2005 Sales (mil.) $49,205 1-Year Sales Growth 15.8% Michael Dell 2005 Net Income (mil.) $3,043 1-Year Net Income Growth 13.1% • Sells Wintel Days supply in inventory 3 systems via the direct model Source of all data is the Dell 2005 10-K filing unless otherwise noted.
  7. 7. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Dell’s Strategy – Direct From Dell • Sales Of Computer Systems Directly To Consumers • Elimination of Retail Middlemen • Computer System Construction Based Upon Individual Customer Needs • Quick Introduction of State Of The Art Technology • Elimination Of Heavy Inventory Investment
  8. 8. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Dell’s Strategy – Direct From Dell Effect On Working Capital Cash Conversion Cycle 0 • Reduction Of 2000 2001 2002 2003 2004 2005 -10 Inventory -20 -30 -40 2004 2003 2002 2001 2000 2005 Inventories 28-Jan-05 30-Jan-04 Jan-31-03 Feb-1-02 Feb-2-01 Jan-28-00 32 Days of sales outstanding 31 28 29 32 34 4 Days of supply in inventory 3 3 4 5 6 73 Days in accounts payable 70 68 69 58 58 -37 Cash conversion cycle -36 -37 -36 -21 -18
  9. 9. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations
  10. 10. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Dell Strategy for INDIA • Dell will understand the indian market and judge the sales performance before they take a decision on manufacturing unit. • India is now the 13th market for DELL. • The $28.5-billion Dell Computer Corporation, a computer systems company and provider of Internet infrastructure, will now sell its products and support operations in India. • In both software and hardware as well we have outsourcing from India as well.
  11. 11. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Continue……… • Dell will initially deal directly with customers in major cities and set up a call centre at Bangalore to cater to the Indian market.quot; • Dell will concentrate on selling its products to the business houses. • Big MNCs and business houses are our prime market. • Customers could place their orders either through the company Web site or dial a toll free number, he said adding, this would help it to cut down distribution cost by 6 to 8%
  12. 12. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Continue……… • In the last few years, the company had sold about 60,000 units in India, but expects a triple digit growth over the next two years • Dell plans to strengthen its service level and coverage by adding more service partners to the current arrangement with Tata Infotech. • Dell is planning for local sourcing and merging of components, and working to virtually integrate the logistics provider into world-class supply-chain management system to enhance customer service quality.
  13. 13. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Continue……… • Dell is in the process of tying up with various local companies for this purpose. • the products will be competitively priced as the price of components have been going down drastically. • Dell believes that the tariff structure, which is a problem right now, will go down eventually and the products will become much cheaper.
  14. 14. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Target Market DELL have always been suppliers for businesses and that is the way it is going to be in India. DELL is No.1 in the businesses market, while number four in the consumer market. By Michael Dell
  15. 15. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Company Value Dell’s Strategy – Direct From Dell Effect On Working Capital Selected Working Capital • Reduction of $5,000 Accounts $4,000 $3,000 Receivable/Extension $2,000 of Accounts Payable $1,000 $0 2001 2002 2003 2004 2005 2004 2003 2002 2001 2005 Crediting (in millions of $) 28-Jan-05 30-Jan-04 Jan-31-03 Feb-1-02 Feb-2-01 $ 4,414 Accounts Receivable $ 3,635 $ 2,657 $ 2,269 $ 2,424 8895 Accounts Payable 7316 5989 5075 4286 -78 Allowance for doubtful accounts -84 -71 -68 -69
  16. 16. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Problems & Issues of Case Stagnant Sale of Computers Stagnancy in Revenue In the further course of presentation we will try to explain what dell did to overcome this issues
  17. 17. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Company Value Intangible Value of Dell Market Capitalization Breakdown Assets $23,215 R&D % of Net 24% Expenditures Revenue (in millions of $) Dell $463 < 1% Intangiable $73,915 Apple 489 6% 76% HP 878 4% Source: Dell, Apple, and HP – 10-K filings
  18. 18. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Storage POS Server Software Desktop Notebooks Peripherals
  19. 19. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Performance
  20. 20. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Performance Net Revenue (in millions of $) $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
  21. 21. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Performance Industry Analysis Net Revenue Growth 40% 35% 30% 25% 20% 15% 10% 5% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 -5%
  22. 22. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Industry Analysis What drives this industry growth? • Technology • Internet • Applications • Pricing
  23. 23. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Industry Analysis Dell’s Market Segmentation Revenue By Market Revenue By Product Asia Pacific- Japan 11% Enterprise 21% Europe US - Desktops 22% Business 50% 52% Notebooks 29% US - Consumer 15%
  24. 24. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Competitors
  25. 25. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Competitors Key Numbers Dell HP IBM $49,205 $79,905 $ 96,293 Annual Sales ($ mil.) $97,647 $58,026 $149,402 Market Cap ($ mil.) Profitability Dell HP IBM Industry Market 19.0% 28.5% 42.5% 19.9% 48.4% Gross Profit Margin 6.2% 4.3% 8.8% 4.5% 6.2% Net Profit Margin 46.9% 9.3% 28.3% 23.3% 11.7% Return on Equity 13.1% 4.6% 7.7% 8.3% 2.0% Return on Assets 43.5% 8.3% 18.9% 21.8% 5.7% Return on Invested Capital Source: Hoovers
  26. 26. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Competitor environment Evolving 2006 2000
  27. 27. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Dell services business continues to rapidly expand
  28. 28. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Significant growth opportunity for Dell
  29. 29. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations PC SUPPLY CHAINS Customer Customer PULL Virtual Integration Distribution Channels PULL Dell PUSH Manufacturer PUSH Suppliers Suppliers Typical PC Supply Chain Dell Supply Chain (Compaq, HP, IBM, etc.)
  30. 30. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Supply Chain Management Customers Hub Factory
  31. 31. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Growth “A big jump”
  32. 32. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Pricing Matrix High Medium Low For Loyal High Customers Medium New Quality Medium Customers Market Retailers Low Price
  33. 33. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Dell Product Mix Owned Products Third Party Products Desktops Switches Notebooks Electronic software & Acc. Servers Storage Printers
  34. 34. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Product Line Desktop Notebooks Servers Inspiron Notebooks Poweredge Tower  Dimension Desktop Latitude Notebooks servers  Opti-plen Desktop Dell Precision Mobile Poweredge Pack  Dell precision Desktop Notebooks Optimize Servers  Open source Desktop Open source Poweredge Blade Notebooks Servers Storages Switches Electronic Software & Acc. Power vault direct Power over ethernet Desktop acc. attached storage Handheld Table PC’s switches Power vault network Managed switches Notebook acc. storage Web managed Notebook Power Power vault tape MP3 player switches Monitor etc. backup storage Enterprise class storage
  35. 35. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations DELL Customers
  36. 36. Reasons For Stagnant Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations sale Ishikawa Diagram ??? Competitors Tech Factor Logistics No Face to Face Comm. Late Entrant Direct Support Tax Pricing Factor
  37. 37. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Study & Survey Survey of Companies: • HDFC Std. Life Ins. • BPL • Godrej Lawkim • Pantaloons
  38. 38. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations DELL Questionnaire 1)Which Company’s Server You use ? Dell Hp IBM Lenovo Others Plz Specify 2)Which Kind of Server you use? 3)What is the purpose of not Purchasing DELL products ? 4)Who are the support partners of DELL who looks after the service in India for you ? 5) Which Company Peripherals do you use ? 6)What are the applications for Dell products? 7) Do you feel DELL is successful in sale of computer and its peripherals in India ? 8) In future do you think DELL would be able to cater to your requirements keeping in mind the current scenario ?
  39. 39. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Recommendations • Maintain a moderate market share growth in the PC industry while sticking to low price, high quality strategy • Grow business segment (servers) • Concentrate on global expansion • Pursue government contracts • Expand & grow lucrative printer and computer peripheral products • Buy back stock
  40. 40. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations Recommendations • Analysts are across the board on stock recommendations • Dell has met or exceeded its projections for 16 straight quarters • Slowing growth but not leveling out • No signs of industry collapse in the near future • Dell continues to gain market share and HP has forfeited price competition
  41. 41. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations
  42. 42. Company Overview Dell’s Strategy Company Value Performance Industry Analysis Competitors Recommendations “Think Simple, Live Simple Life Will be Simple”

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