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AT DELL
Michael broke the paradigm about how to run a computer business, but they haven't been so great at finding the next paradigm
Flow of Presentation
Key Role Players Key Issues In The Case Dells Key Business Principles Offshoots Of Rigidity Our Suggestions
Dells rigidity on their key business principles Customer Dissatisfaction Falling Operating Margins Outdated Models/R&D/Tie-up with only Intel and Microsoft Restless Employees Reluctant Recruiters New Product Duds Loss of Reputation
Due to extreme rigidity on the key business principles, any discussion revolving around changes and business adaptation in the same were not entertained. Their only focus was on reduction of cost
Offshoots Of Rigidity
Customer Dissatisfactio n Operating Margins Reduced focus on customer service Switching of loyal customers
Compressed operating margins It was becoming very hard for Dell to lure the customers to its Web site with cheapo models and then getting them to buy it Now PCs are so powerful that most consumers are fine with preconfigured models in stores The Asian contract factories that make them for Dell also make them for other companies, eroding Dell's build-to-order advantage
Outdated Model
Headhunters would rather recruit from Dell than for it ,because working with the company is so difficult and unprofitable
Dell dropped its DJ music player Its stolid brand image doesn't help it in fast-growing consumer markets Lack of R&D
Innovative
Microprocessor
Operating Margin
Intel
Sank to 7.7%
AMD
Climbed to 10.7% 2.4 bn 3 hrs
Last Year Revenue 3.6 bn Assembling Time 1 hr(calculating measures to whittle down $3 bn) Boeing, Daimler Chrysler, TRW 18.18% 37.8 mn
Diversification Of Suppliers Multiple Channel Of Distribution Better Consumer Research R&D/Product Development Showrooms/EBOs
VA P
Customers
Online Booking
Direct Channel
Suppliers (AMD/INTEL)
Dell
Customers
Commercial Buyer
Indirect Channe l