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Case Presentation - Matching Dell

Strategic Management

Kristen McNamara

on 24 October 2013

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Transcript of Case Presentation - Matching Dell

Matching Dell
Group 3
Started out as the leader of the PC industry
Early 1980s fell to 3rd in market shares
Main source of income: hardware, software, and IT services
Through the 1990s IBM used retailers to sell their PCs
Profit Margin: (Net Income/Sales)=($944/$12,227)=8%
-Dell: 8%
-Compaq: -8.80%
-HP: 6.26%
-IBM: 7.75%
-Gateway: 4.5%

-Dell: 22.12%%
-HP: 8.74%
-IBM: 7.35%
-Gateway: 11.9%
Extended Solutions Partnership Program
Ten channel assembly system
Distribution Channels
75% Distributors and Resellers
23% Retailers
1998 created website for direct sales
Sales and Marketing

Production and Logistics

Service and Support
Gateway 2000
Dell's biggest competitor using direct sales

Target Market
Individual home users and small businesses

Support and Service

1997 Gateway tried to gain market shares using other distribution channels
Personal Computer Industry
DuPont Analysis 1998 Comparisons (in millions)
Dell's Competitive Advantage
1981 - IBM created a "open architecture" PC
Only alternative was Apple
1982 - Compaq
1984 - Dell
1985 - HP
Focus on Home PC Market
Focus on implementing one thing at a time after more development and avoid inconsistencies
Shift from large companies to small companies and individual consumers
Improve online website
Invest in R&D
Gateway 2000
Keep focusing on their direct sales
Invest in R&D
Total Asset Turnover: (Sales/Total Assets)=($$12,327/$4,268)=289%
-Dell: 289%
-HP: 139.8%
-IBM: 94.9%
-Gateway: 264.6%

Equity Multiplier: (Total Assets/Equity)=($4,268/$1,293)=330%
-Dell: 330%
-HP: 199%
-IBM: 443%
-Gateway: 215%
Focused on competitive low prices
Used all four channels of distribution
Online Catalog
Implemented improved forecasting methods and Optimized Distribution Model
Increased support service and consulting stafff
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