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DELL: Potential for New Advertising Agency


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Title: DELL: Potential for New Advertising Agency


DELL Potential for New Advertising
Agency Executive Briefing Report
Notice This Executive Briefing Report
presentation is compiled from the World Wide Web
and other sources solely for internal use by the
client for the specific and limited informational
and research purpose described above. Crystalyse
Services locates and organizes this information
so that the client can directly access the
sources and proceed with their own analysis and
evaluation. Crystalyse Services does not espouse
any opinion or make any recommendations as to the
significance of the data provided or its use by
the client nor makes any representation regarding
the accuracy or completeness of the information
Table of Contents
Serial Number Topic Page Number
  • Dell, Inc., formerly known as Dell Computer
    Corporation, designs, develops, manufactures,
    markets, services and supports a range of
    computer systems, including enterprise systems
    (servers, storage and networking products and
    workstations), notebook computer systems,
    desktop computer systems and software and
  • Became a Fortune 200 company in 14 years.
  • Second largest and fastest growing PC company in
    the world.
  • The worlds largest Direct PC company.
  • Manufactures most of the products it sells.
  • Has six manufacturing locations worldwide to
    service its global customer base. The company is
    managed on a geographic basis the Americas,
    Europe and Asia Pacific-Japan. 
  • Manufacturing process consists of assembly,
    functional testing and quality control. Testing
    and quality control processes are also applied to
    components, parts and subassemblies obtained from
    suppliers. Quality control is maintained through
    the testing of components, parts and
    subassemblies at various stages in the
    manufacturing process.
  • Is certified worldwide by the International
    Standards Organization to the requirements of ISO
    9001 2000. This includes the design, manufacture
    and service of computer products in all Dell

Source Nexis - Datamonitor
Dells Advertising Key Facts
  • Agencies
  • Critical Mass Inc. - Calgary, AB, T2G OY4 Canada
  • DDB Chicago - 200 E Randolph St, Chicago,
    Illinois, 60601-6436 United States

AD BUDGET Adv. Expenditures FY 2004 473,000,000
  • Vehicles Used
  • Business Publications
  • Consumer Magazines
  • Direct Mail to Business Establishments
  • Direct Mail to Consumers
  • Internet Adv.
  • Network Television

Scope for New Advertising Agency Customer
Service Troubles - 1
  • Absence of middlemen, a key ingredient of Dells
    sales strategy, means that Dell takes all the
    kudos as well as the brickbats for its customer
    service standards.
  • John Dickinson, an industry veteran and
    columnist, in an open letter to M. Dell on Dec
    23, 2003 complained about how service levels have
    deteriorated. His registration system broke down.
    It turned out that Dells database had no record
    of his computer's existence. None in Dell could
    figure out what to do to get his computer
    properly registered.
  • In early 2004, in two surveys that rate the
    satisfaction of PC buyers, Dell's scores
  • The March issue of Consumer Reports, in a survey
    of 4100 consumers, gave Dell 62 points out of a
    possible 100 for its support on desktop PCs. In
    June 2003, Dell had scored 64. The slippage has
    been steady over the last 3 years. Dell had a
    score of 74 in Dec 2001.
  • In another survey done by Technology Business
    Research (TBR), in the fourth quarter of 2003,
    Dells satisfaction rating among corporate buyers
    slipped to 80.98, down from 83.4 in the third
    quarter of 2003. TBR's survey polls buyers on
    eight aspects of support, including their overall
    satisfaction with a company's support service.
    However, in TBRs third quarter report for 2004,
    Dell scored 83.61, marginally up from 82.27 in
    the second quarter.
  • Dells images deterioration was exacerbated by
    occurrences such as computer worms and shortages
    of replacement parts.
  • Dell was forced to relocate some part of its
    support service center in India back to the US
    after escalations in complaints. Calls from US
    purchasers of Dell's OptiPlex desktop and
    Latitude notebook personal computers will be
    handled from existing facilities in the United
    States brand PCs. Some experts argue why should
    Dell seek to cut costs of support service when it
    is making handsome profits?

Source Nexis search,,
Scope for New Advertising Agency Customer
Service Troubles - 2
  • Dell's goal is to solve each problem within a
    12-hour period. Right now it meets that goal only
    about 96 of the time, globally, for its server
    and storage products.
  • Dell could face more problems with customer
    service in future. Its focus on growth naturally
    means that it will attract more consumers who are
    less skilled in operating PCs and thus need more
    assistance. As the proportion of the consumers
    in the mix rises, there is going to be an
    increase in complaints, even if Dell isn't doing
    anything differently," says Roger Kay, an analyst
    at IDC. That's because increasing market share
    requires a "devil's bargain. Dell has to support
    inexperienced buyers in order to get their
  • Apart from increasing the size of its support
    service staff, Dell has shifted its priorities to
    resolving problems on the first call. The company
    is also examining how its customer care
    organization can resolve order-related problems
    more quickly.
  • Some customers have said that while dealing with
    Dells support staff, they felt they were being
    talked down to, as if they have never experienced
    technology. They compared this to rival HPs
    friendly neighborhood personnel for support
  • Dell plans to offer a free security software
    bundle that will combine a firewall, antivirus
    and antispyware software. Spyware problems
    account for 20 of the company's support calls
    now. And each spyware call takes about 20 minutes
    on an average. Given the no charge nature of
    this segment, Dell will have to seek ways to
    limit the pressure of spyware issues on support
    staffs time.
  • Experts feel that Dell's rapid unit shipment
    growth in recent years and the resulting rapid
    influx of new business customers, are the root
    cause of its customer relations problems.

Source Nexis search,,,
Scope for New Advertising Agency New Product
Lines - 1
  • Printers
  • Currently, Dell is in Phase 2. Phase 1 of rolling
    out the product has already happened.
  • In Phase 2, Dell aims to boost printer sales
    significantly by expanding the number of models
    it offers and the numbers of countries in which
    it markets. Dell will take most of the profits it
    makes on printers and reinvest them in the
    business by offering lower prices or bundling
    printers with its PCs, all with the idea of
    pumping up unit shipments.
  • Phase 3 will arrive once Dell builds a large
    customer base, which would increase its sales of
    supplies such as ink, toner and paper.
  • According to Tim Peters, head of printing and
    imaging, the company is also nearly ready to
    enter the Chinese market.
  • In Nov 2004, Dell launched Wireless Printer
    Adapter 3300 that allows users to print, scan or
    fax without being connected to their printers.
    The computer needs a wireless card and must be
    connected to a wireless network.
  • TVs
  • The main customer for Dell TVs may be consumers,
    but Dell sees a potential among its business
    customers as well. A number of hotels, financial
    institutions, restaurant chains and retailers are
    known to have expressed interest in Dell TVs.
  • Business customers with chains of outlets (like
    McDonalds) could offer huge business.
  • Dell recently announced plans to add two new
    42-inch plasma-screen TV models to its TV line
    up. It is likely to add a few more TV models over
  • Dells high-definition plasma TV will sell for
    US3,499, a relatively modest price that Dell
    believes will help boost demand.

Source Nexis search,,,
Scope for New Advertising Agency New Product
Lines - 2
  • Smart Phones
  • Smart phones, which combine the attributes of a
    cellular phone and a PDA like Dell's Axim,
    represent a potential opportunity for Dell,
    executives say. But Dell will carefully examine
    what it can do to differentiate its products from
    those of incumbents such as Nokia.
  • Media Center PCs
  • In Oct 2004, Dell rolled out a new line of Media
    Center desktops, wrapped around Microsoft's
    Windows XP Media Center 2005 operating system.
    The PCs will function more like entertainment
    devices that can record, show TV programs, and
    play DVD movies or music CDs.
  • It follows a good, better, best model strategy
    to sell Media Center PCs. Basic utilities come
    with the cheap good bundle. It won't include a
    remote control or tuner for watching and
    recording television, as in full-fledged Media
    Center PCs. However, it will let people view
    photos, home videos and other media content using
    the Media Center interface, designed for viewing
    while sitting back in a couch or chair. The
    upgrade from a traditional Windows operating
    system costs only 39.
  • The best offers the entire package for a higher
    price. The aim is to offer the product across
    price segments.

Source Nexis search,,,
Scope for New Advertising Agency New Product
Lines - 3
  • Others
  • Dell recently introduced Inspiron 9200, a new
    notebook for consumers that offers a 17-inch
    display, with a list price that starts at
    US1,699. Dell aims to attract buyers interested
    in using a notebook to watch movies or to
    manipulate multimedia files. The machine also
    comes with Wi-Fi, allowing it to connect to home
    networks and share files.
  • Dell wants to provide its consumers with a menu
    of in-home services. It plans to offer to do jobs
    such as installing home networks for consumers in
    conjunction with a new suite of services that
    will allow customers to pay a set price for a
    certain job. Under the program, a Dell
    representative will pull up in the van and take
    care of the problem.
  • Dell also offers discretionary services -
    professional consulting, SAN (storage area
    network) design and deployment, application
    development, managed services. It's about a 2.6
    billion business and growing at roughly double
    the rate of Dells product business.
  • Dell is also eyeing a movie download service. It
    has been exploring partnerships that would offer
    its customers access to movie downloads, similar
    to how it provides music downloads through a
  • Dell recently launched the Axim X50 handheld and
    refreshed its Dell DJ music line with two models,
    including the miniature Pocket DJ 5. The DJ 5,
    about the size of a deck of cards, will sell for
    US199 and come with 5GB of storage.
  • What Dell will not get into
  • Utility computing. While other competitors are
    embracing the trend, Dell has decided not to.
  • Dell is not interested in lower-priced standalone
    devices like DVD players.
  • Digital cameras. While Dell will have alliances
    to bundle digital cameras with its products, it
    will not go into it alone.

Source Nexis search,,,
Scope for New Advertising Agency Geographies
  • In China, already the worlds second-largest
    market, Dell is the largest non-domestic company,
    after Legend.
  • In September 2004, Dell opened a command center
    to offer improved services to its business
    customers in China. The new facility, located at
    Xiamen, is the second Enterprise Command Center
    (ECC) that Dell has set up besides the one at
    Round Rock, Texas. The centers provide
    around-the-clock spares and service support to
    server and storage customers.
  • More centers will be opened in Europe and Japan.
    The European center will be at Limearick,
    Ireland the location of the Japanese center is
    yet to be announced.
  • One more ECC is slated to be established in the
    Asia-Pacific region in early 2005.
  • The idea behind the ECCs across geographies is to
    help Dell take better and quicker care of
    problems for its high-value customers. Its
    American ECC has seen a 25 improvement in
    resolving initial customer problems since it was
    set up in November 2003.
  • In Japan, with 50 of consumers using their PC as
    a television, Dells TV and Media Center software
    could have a big market potential.
  • Printers and enhanced services are showing
    particularly strong growth in Europe, Middle East
    and Africa region. These services include backup
    services, Windows migration services Active
    Directory services and the like. In the third
    quarter of 2004, Dell saw a 72 growth in this
    segment in EMEA region. Taken together with the
    core PC, server and laptop segments, maintaining
    the absolute, year-on-year revenue growth rate in
    EMEA is likely to get harder because it will be
    growing from a larger base.
  • A more immediate concern In EMEA, in the third
    quarter of 2004, Dells PC shipments growth was
    below Gartner's expectations. Gartner expected a
    14 growth. Dell clocked 12.6 translating to
    14.3 million units.

Source Nexis search,,,
Scope for a New Advertising Agency Dells
  • Dell is accused of neglecting independent
    research. As of August 2003, in 19 years, Dell
    had only been awarded 867 patents -- less than
    the total many of its closest competitors receive
    in a year. In response, Dell says it doesn't need
    to take that route. Since it relies on
    standardized components, it doesn't need to spend
    money on research and development. Dell also
    claims that it manages higher return on RD than
    any rival, about 5 times the profit for every RD
    dollar spent.
  • According to a HP representative, despite the
    hype surrounding cost-efficient direct selling
    strategy, PCs from Dell cost more than those from
    HP - sometimes as much as 250 or more for
    equally configured machines.
  • In UK, in June 2004, Dell was ordered to change
    its advertising following an objection to an
    Internet promotion and three national press
    advertisements for its computer systems. Retail
    chain DSG Retail Ltd challenged the availability
    of a free gift that was promoted on Dell's web
    site, and whether the free upgrades and savings
    advertised in the press were only available
    online as the ads implied. The UK's Advertising
    Standards Authority upheld both complaints after
    Dell acknowledged that the free gift was not
    available with the Dimension 2400 system and that
    in some cases telephone customers also received
    the upgrades and savings offered only for online
  • Peter Shankman, president-CEO of marketing agency
    the Geek Factory, sees inconsistency in Dell's
    approach to branding over the last several years.
    Steven, the Dell Dude, did well, till Dell was
    told that it was pushing away adults. So Dell
    turned its efforts to small businesses and
    succeeded again until someone suggested Dell was
    losing kids and college students. Now Dell is
    trying to balance both.
  • Dell comes a relatively lowly 25th in terms of
    brand value. Its closes competitors in the PC
    market fare much better. IBM is third with a
    brand value of 53.7 bn. HP comes at 12th
    position with a value pegged at 21 bn. Dell
    comes 25th with 11.5 bn.
  • Dell has consistently lost market share in the
    fourth quarter over past years due to lower
    levels of sales outside the consumer market.

Source Nexis search, Factiva,,, http//
Scope for a New Advertising Agency Chip, Servers
and Laptops
  • According to analysts, one of the chief questions
    in the PC market for the next couple of years
    will be whether Dell will incorporate Opteron or
    Athlon chips from Advanced Micro Devices (AMD)
    into its systems. AMD is gaining customers in the
    corporate world--20 of the Fortune 100 have
    installed Opteron servers. Intel's release of
    chips that can provide a similar 32-bit/64-bit
    functionality--one of the key factors of
    Opteron's popularity--has likely tabled the issue
    for now. Whichever way Dell goes, it may have to
    announce its enhanced prowess effectively through
  • Although Dell sells directly to customers, retail
    market data offers some indication of how
    consumers are reacting to its new 17-inch
    notebooks. The average price of about 2000 has
    limited sales to 6 of total US retail notebook
    sales in the past 15 months, according to data
    from market researcher NPD. The average selling
    price for all notebooks sold at retail stores is
    much lower, hovering around 1350 during the
    last few months.The price differential is
    substantial and if it is not narrowed, it may
    need advertisement support to sustain growth.
  • Dell has entered the blade server segment with
    its PowerEdge 1855. But it is not the most dense
    of the blade servers available on the market.
    While blade servers are by no means a high volume
    part of the server market, they are an important
    sector for the high performance computing market
    (where density and management are increasingly
    important) and for the more sophisticated data
    centers who are struggling with server sprawl and
    are trying to consolidate their machines down to
    the fewest number of CPUs. With up to 60 blades
    per standard 42U rack, Dell says that the
    PowerEdge 1855s will save customers as much as
    25 on blades compared to buying a similar number
    of 1U, two-way Xeon servers. Dell also says that
    the blades can cut down on power consumption
    compared to an equal number of Xeon processors in
    regular servers by 13.

Source Nexis search, Factiva,,,
Scope for New Advertising Agency Emerging
Competition Concerns
  • In the past couple of years, the increasing
    sophistication of search technology and
    comparison-shopping sites have allowed online
    businesses cheaply and effectively to market
    their products to millions of potential
    customers. Dell has thrived on this strategy so
    far. Now, this strategy could be under attack
    from both growing internet usage, search options
    and smaller players.
  • Lenovos purchase of IBM's PC division, expected
    to be completed during the second quarter of 2005
    poses both a threat and an opportunity to Dell.
    IBM has taken measures to ensure that the
    transition is as painless as possible Several
    customers have said they expect no reason to
    change brands. But the deal could still help Dell
    or HP gain if Lenovo and IBM drop the ball during
    the hand-over.
  • Dells competitive edge of direct selling appears
    to be getting blunted. Dells direct selling,
    online-dependent selling strategy can be easily
    emulated. Lenovo has restructured its sales
    divisions and begun direct sales to large
    companies and institutions in February 2004 to
    blunt Dells competitive edge. In consumer
    electronics area, where Dell is taking on the
    likes of Sony and Samsung, rivals have adopted
    Dells online sale strategy.
  • In Music, Apple manages to stay ahead of Dell. In
    Oct 2004, Apple Computer's iTunes Music Store
    sold its 150 millionth song. Dell introduced a
    200 Pocket DJ digital music player that stores
    about 2,500 songs on a 5GB hard drive. But
    Apple's iPod Mini line which costs 250 and has
    4GB of storage is ahead in the race.
  • Dells revealed reluctance to go whole hog on
    consumer electronics because, taken all together,
    the business generates only about 15, could
    hamper growth in the segment.

Source Nexis search,,,
Michael (Mike) George - CMO Important Quotes -
  • Mike George is an ex-McKinsey consultant. Joined
    Dell four years ago.
  • Ken Rollins and Michael Dell, the two CEOs work
    closely with him on major initiatives to ensure
    the integrity of the brand -- for example, its
    ability to tap into consumer emotions. The
    following quotes were attributed to him in 2004.
  • On peripherals built around PC We are really
    focused on the top three or four usage models
    around the PC, trying to make sure we
    have--either through Dell directly or through our
    partners--the right products and services.
  • On Dell decides what to get into We look at
    every category in the digital home and ask a
    series of questions. Can we add a lot of value to
    that marketplace, or do we think there is a big
    price umbrella to go after? Or do we think we've
    got some unique supply partnerships or advantages
    in the market? We rank order the priorities.
  • On why Dell goes for partnerships in some
    peripherals and not in others We also sell a
    lot of digital cameras. That business has really
    grown. Today, that is all through partners like
    Canon and Kodak. I don't anticipate at this point
    a change because I think those companies have
    great camera lineups.
  • On TVs The reason I put the focus on big-screen
    digital TVs is, that's where they're getting all
    of their gross margins. That spells opportunity.
    Our plasma launch was a great example. We came in
    with an absolutely awesome quality 42-inch plasma
    TV for US3,499. Sony's product is US7,999, and
    the other guys are in the US5,000 to US6,000
  • On brand strategy The vast majority of
    customers that spend more than US2,000 on a PC
    come to Dell. I don't think you'll see us pushing
    any radical new solution. It's not how we think
    our brand adds value to customers. We will stay
    away from most first-generation usage ideas
    because it's highly unpredictable what will
    happen. If the usage model isn't exactly right,
    it will end up in someone's closet, and people
    would say, "Why the hell did I spend 1,000
  • On Dell entering videos We're not ready to
    announce anything yet, but we are kind of talking
    to a bunch of folks, and I think we will have
    some video partnerships in the near to medium
    time frame.
  • On the ad focus in 2004 This year we focused on
    giving all Dell ads-Web, TV, print and catalog-a
    uniform look and feel to drive the Dell brand
    across all areas of our business. Whether we're
    talking corporate systems and servers or consumer
    products, Dell's approach is simple Everything
    begins and ends with the customer.'

Source Nexis search,,
Michael (Mike) George - CMO Important Quotes -
  • Reacting to Sony and Samsung adopting the Dell
    strategy of selling over Internet But they
    haven't faced the years of competition in the PC
    market. PC makers have learned to interact with
    customers on a personal basis and establish
    strong customer service support for questions.
    The great advantage we have is that we don't have
    to deal with the retail channel, so we are not
    busy trying to satisfying them.
  • On marketing campaign types in 2003Over the
    last year, we launched two different marketing
    campaigns one focused on enterprise server and
    storage products and the other on our growing
    line of consumer products.
  • On Dell not having a track record of designing a
    lot of products for the home and making emotional
    connection with consumers We are not overly
    concerned. We think this market will mature like
    most other markets are maturing.I honestly think
    that 10 years ago, when you were looking at
    buying a US3,000 to US4,000 PC, some people
    said direct sales wouldn't work. We've seen a
    high level of interest in our products.
  • On consolidation and price declines in consumer
    electronics We will absolutely see it in this
    market. This is the only prediction I'll make
    today. A margin decline is a good thing because
    we have structurally the lowest costs.
  • On Dells overall strategy I would view (our
    strategy as, first and foremost, win the business
    customer, and win the enterprise customer. Second
    is, win the consumer of PCs. Third would be to
    win the consumer with consumer electronics. In
    some of our more mature international markets
    with the most developed consumer businesses--like
    the United Kingdom, Japan, Canada and
    Australia--we definitely see a big opportunity in
    those markets for consumer electronics.
  • On music Music players are not in the Dell
    scale. They're not a particularly large market.
    They are huge for smaller companies, but for us,
    they will never be a large market.
  • On share of new and existing customers for Dells
    new products We have recently measured a few of
    our newer categories, like music players and
    TVs--and 52 are going to NEW customers. While
    it's too early for this to be really definitive
    data, it appears that those customers have a
    disproportionately high likelihood of then coming
    back to us and buying the PC. It's given us more
    confidence to be bolder in how we talk (in
    advertising) about our electronics.
  • On ad inserts One of our most important
    advertising vehicles is the Sunday newspaper
    insert. By putting a TV on the cover of a Sunday
    insert, we sell more PCs than when we have with a
    PC on the cover.
  • On price being Dells main asset Dell's great
    secret and success in the PC market is that we
    have a fairly low market share among value-price
    PCs and an absolutely dominant market share among
    high-end PCs.

Source Nexis search,,
Effectiveness of Advertisements
  • Total budget for advertisements in 2004 was
    pegged at 473 mn. Dell spent 116.7 mn in
    direct response ads alone in 2003.
  • According to a Nielson survey in Sep 2004, based
    on data from AdRelevance, Dell ranks second in
    terms of impressions (1614351 impressions).
  • According to a Reputation Quotient Survey
    conducted in the US, only Coca-Cola Co. and Dell
    Inc. were the only two big firms in the top 10
    companies with the most memorable campaigns and
    the greatest sincerity in their corporate
  • Dell markets via TV, e-mail, online and print. In
    2004, it began regularly using free-standing
    inserts (FSIs) and radio. The radio ads drive
    traffic to an easy-to-remember URL and according
    to the company spokesman, the results have
    exceeded goals.
  • Dell discovered that banner ads were actually
    cannibalizing business. So it pulled back
    investments there.
  • Dell's television commercials ranked seventh in a
    survey of Singapore television viewers' ad recall
    levels by market research firm Asia Market
    Intelligence released in November 2003.
  • Memorable television commercials have contributed
    to Dell's increasing consumer market share in the
    US, which has grown from 16 in 2001 to 23 in
  • Steven, the dude in Dell commercials had become
    so popular in the US that he has spawned his own
    website and even a line of "Dudewear" clothing
    and accessories. He was later found to be
    involved in a Marijuana incident but by then,
    Dell had moved to different advertisement themes
    to lure business users and adults.
  • Dell follows local ethos and considerations while
    chalking out advertisement strategy for specific
    regions. For example, in Asia Pacific it had not
    used Steve the Dude.

Source Nexis search,,,
PC Segment Competition Update
US Market PC Sales Third Quarter 2004

Worldwide PC Sales - Third Quarter 2004

Company Unit sales Market share Growth
Dell 7.8 mn 16.8 20.9
HP 7.1 mn 15.0 9.5
IBM 2.6 mn 5.6 16.6
Company Unit Sales Market Share Growth
Dell 4.9 mn 30.4 14.5
HP 3.1 mn 19.1 1.6

Source Gartner
Source Gartner
Asia Pacific PC Market in Third Quarter 2004
Company Market share
Lenovo 12.1
HP 11.1
IBM 7.8
Dell 7.4
Dell grew by 38.8 in Asia Pacific Market in the
3rd Qtr 2004
Source Gartner
Server, PDA Segments Competition Update
  • Worldwide Server Market in 3rd Quarter 2004

Company Revenue in Revenue Growth Market share
IBM 3.7 bn 6.3 31.7
HP 3.1 bn 2.9 26.8
Sun Micro 1.2 bn 0.1 10.2
Dell 1.2 bn (6 mn behind Sun) 14.1 10.1
Comment Given the growth rates, Dell is likely
to overtake Sun Microsystems in the fourth
quarter of 2004. Dell has been steadily
expanding its share of the server market, with
emphasis on "industry standard components"
Source Gartner
PDA Market Growth in 3rd Quarter 2004
Company Market Share
PalmOne 34.7
HP 30.6
Dell 8.9
Dells PDA shipments grew by 44 during the qtr
Source Gartner
Source Nexis Factiva
Organization Structure
Dell, Inc. Operations Areas
Products for Home Home Office
Customer Service Support
Products for Small Businesses
Products for Medium Large Businesses
Products for Govt. Education Healthcare
  • Low-end products for the entire family.
  • Desktops
  • Notebooks
  • Printers
  • Electronics Accessories
  • Handheld (PDA)
  • Monitors
  • LCD TV
  • Technology solution for businesses from 1 to 200
  • Desktops
  • Notebooks
  • Workstations
  • Printers
  • Servers
  • Software
  • Scalable enterprise solutions for businesses over
    200 employees.
  • Servers
  • Storage
  • Networking tools
  • Desktops
  • Notebooks
  • Workstations
  • Printers
  • Software
  • Service Training
  • Special purchase programs and contracts for
    organizations. Includes
  • State Local Govts.
  • Federal Govt.
  • K-12 Education
  • Higher Education
  • Healthcare
  • Solves problem by using following online tools
  • Online Support
  • Troubleshooting
  • Service Warranties
  • Downloads
  • Software Peripherals
  • Upgrades
  • User Guides

SWOT Analysis
  • Number one direct sale computer vendor
  • Strong in enterprise storage and server markets
  • Low cost operating model
  • Profitable 
  • Low RD spending
  • Weak services position
  • Small inventories 

  • Target low end and mid range segments
  • New markets
  • International expansion
  • Cyclical demand
  • PC upgrades/replacement demand 
  • Strong competition
  • Interest and foreign currency exchange rates
  • Slow growth in PC market and IT spending
  • environment 

Source Nexis Datamonitor
Management Profile
Name Designation
Michael S. Dell Chairman CEO
Kevin B. Rollins President COO
James M. Schneider CFO Sr. Vice President
Randall D. Mott CIO Sr. Vice President
Michael A. George Chief Marketing Officer VP-US Consumer Mktg eBusiness
Thurmond B. Woodard Chief Ethics Officer VP-Global Diversity
Thomas B. Green Sr VP-Admin Sec
William J. Amelio Sr. Vice President
Paul D. Bell Sr. Vice President
Jeffrey W. Clarke Sr. Vice President
Martin J. Garvin Sr. Vice President Worldwide Procurement
John S. Hamlin Sr. Vice President
Joseph A. Marengi Sr. Vice President
Paul D. McKinnom Sr. Vice President - HR
John K. Medica Sr. Vice President
Glenn E. Neland Sr. Vice President
Rosendo G. Parra Sr. Vice President
Charles H. Saunders Sr. Vice President Dell International Services.

Source Nexis Standard Directory of Advertisers
Management Profile
Name Designation
Elizabeth Heller Allen Vice President Corporate Communication
Colin P. Buechler Vice President Corporate Strategy
Robert W. Davis Vice President Corporate Finance
Joan Hooper Vice President - Finance
Mark Vena Dir-Digital Home Marketing

Source Nexis Standard Directory of Advertisers

Source Annual Report 2004
Financials 2

Source Annual Report 2004
Financials 3
Region-wise Sales Summary FY 2003-2004

Region-wise Contribution FY 2003-2004
Financials 4
Product wise Sales Summary FY 2003-2004

Product wise Contribution FY 2003-2004
Financials 5
Sales Trend from Jan 95 to Jan 04

Financials 6

Source http//
Desktop Range

  • OptiPlex
  • Stable PCs for your connected environment
  • Easy To Transition To New Technologies
  • Maximized Uptime
  • Easy to Manage
  • Broad portfolio meets wide range of customer needs
  • Precision
  • Ultimate performance and scalability for
    workstation class applications
  • Performance
  • Scalability
  • Optimized Solutions
  • Application Focus
  • Dimension
  • Focused for personal and small office use
  • Short product, peripheral, and OS lifecycles
    driven by rapid advancement of consumer market
  • Limited support for network peripherals

Desktop Range 2
Dimension 2400 Dimension 4600C Dimension 4600 Dimension 8400 Dimension XPS Gen 3
Specification - Intel Pentium 4 Processor (2.66GHz, 533 FSB) Microsoft Windows XP Home Edition 128MB Shared DDR SDRAM at 333MHz (Performs at 266MHz for 400FSB systems) 40GB Ultra ATA/100 7200RPM Hard Drive FREE 3-5 Day Shipping on orders over 649 Online Only! FREE Kodak Digital Camera! FREE CD-Burner Upgrade - Online Only Specification - Intel Pentium 4 Processor (2.80GHz, 533 FSB,1MB Cache) Microsoft Windows XP Home Edition 256MB Dual channel Shared DDR SDRAM at 333MHz (2X128M) 40GB Ultra ATA/100 Hard Drive FREE 3-5 Day Shipping on orders over 649 Online Only! FREE Kodak Digital Camera! FREE CD-Burner Upgrade - Online Only Specification - Intel Pentium 4 Processor (2.80GHz, 533 FSB) Microsoft Windows XP Home Edition 256MB Dual Channel DDR SDRAM at 333MHz 2x128M) FREE 3-5 Day Shipping Online Only! FREE Kodak Digital Camera! FREE 2nd Bay CDBurner - Online Only! Specification - Pentium 4 Processor 530 with HT Technology (3GHz, 800 FSB) Microsoft Windows XP Home Edition 512MB Dual Channel DDR2 SDRAM at 400MHz (2x256M) 80GB Serial ATA Hard Drive (7200RPM) FREE 3-5 Day Shipping - Online Only! FREE Kodak Digital Camera! FREE 2nd Bay DVDBurner - Online Only! Specification - Pentium 4 processor 540 with with HT Technology (3.20GHz, 800 FSB) Microsoft Windows XP Home Edition 512MB Dual Channel DDR2 SDRAM at 533MHz (2x256M) FREE 3-5 Day Shipping - Online Only! FREE Kodak Digital Camera! FREE 2nd Bay DVD-Burner - Online Only!

Source http//
Desktop Range 3

Source http//
Notebook Range
Inspiron 1000 Inspiron 1500 Inspiron 600m Inspiron 8600 Inspiron XPS
Specification - Mobile Intel Celeron processor,2.20GHz,15 inch XGA Microsoft Windows XP Home 512MB, 2 DIMMS 24X CD-RW/DVD Combo Drive FREE 3-5 Day Shipping on orders over 999 - Online Only! FREE Wireless Card! Specification - Mobile Intel Pentium 4 Processor 2.80GHz, 14.1-inch XGA Microsoft Windows Home Edition 256MB Shared DDR SDRAM, 1 Dimm 24X CD-RW/DVD Combo Drive with Sonic RecordNow FREE 3-5 Day Shipping - Online Only! FREE Wireless Card! Specification - Intel Pentium M Processor 715(1.5GHz) 14.1-in XGA w/32MB Video Microsoft Windows XP Home Edition FREE 3-5 Day Shipping Online Only! FREE Kodak Digital Camera! FREE Combo Drive Upgrade - Online Only! Specification - Intel Pentium M Processor 705(1.5GHz), 15.4 in WXGA Microsoft Windows XP Home Edition FREE 3-5 Day Shipping Online Only! FREE Kodak Digital Camera! FREE Combo Drive Upgrade - Online Only! Specification - Pentium4 w/HT Technology 3.4GHz,15.4 WUXGA Microsoft Windows XP Home Edition FREE 4x CD/DVD burner (DVDRW/R) Upgrade! (from Combo Drive) 60GB Hard Drive 3 Year Limited Warranty plus 3 Year At-Home Service FREE 3-5 Day Shipping -Online Only! FREE Kodak Digital Camera! FREE DVD Burner Upgrade -Online Only!

Source http//
  • The companys services are grouped under four
  • Dell Managed Services
  • IT management services
  • Planning, deployment, maintenance, asset
    management, on-site field services and other
    related services
  • Dell Professional Services
  • Design, development and implementation of
    end-to-end technology solutions 
  • Deployment Services
  • Factory integration services
  • Custom asset management and recovery services
  • Custom delivery services
  • Installation services
  • Managed deployment services
  • Image management services 

Source Nexis Datamonitor

  • Most efficient path to the customer
  • Single point of accountability
  • Build-to-order
  • Low-cost leader
  • Standards-based technology
  • Establish relationships with leading technology
    providers in education.
  • Provide the best teaching and learning computing
    solutions tailored to needs.

Business Model
  • Business to Business (B2B)
  • Business to Consumer (B2C)
  • Demand-pull company
  • Pure play internet company

Source http//
Online Market Segmentation
Dell Homepage
Home Home Office
Small Business
Medium Large Business
Govt. Education Healthcare
Customer Service Support
Personal / End Users
Products Services
Products Services
Special Offers
Dell Deals
Home Home Office
Business Solution Centre
New at Dell
Shopping Alternatives
State Local
Featured Solutions
Small Business
Business Technology Solutions
Shopping Alternatives
Solution categories
IT Professionals
Medium Large Business
Service Support
Service Support
Support Information
Business Affiliates Programs
Purchase Information
Higher Education
Consumers options when they go to

Health Care
Partners and Programs
Health Care
Principles of SCM_at_DELL
  • Buy to Plan Build to Order
  • Forecast Buy Sell
  • Reality based conversations Be Direct
  • Relentless Demand Supply Balancing
  • Synchronization between manufacturing and sales
  • Meaningful collaboration across the supply chain

Source http//
Business Strategy
  • Dell has announced a comprehensive business
    strategy to capture a larger portion of the B2B
    (Business to Business) internet-related market.
  • Web Related Capabilities Dells advantage is
    based on direct relationships, low cost, speed to
    market and e-commerce expertise as much as it is
    on Internet hardware, appliances and customers
    services and support. Included in this strategy
    is "Service Provider Direct," a three tiered
    package of
  • Service
  • Support and
  • Co-marketing programs for ISPs, ASPs and Web
    hosting companies.
  • Infrastructure Computing Dell has introduced its
    Power Application appliance servers designed for
    specific Internet infrastructure tasks such as
    Web serving, caching and load balancing. This
    will provide customers will a full range of
    server and storage solutions for building their
    Internet infrastructure.
  • Expert Services A new offering that will help
    businesses take advantage of the power of the
  • Universal Access Universal Internet access
    through a combination of leading-edge devices,
    connectivity offerings and access choices,
    encompassing narrow band services, broadband
    offerings and wireless products and services.
  • Dell Ventures Through strategic links to
    companies with technologies, products and
    services that create breakthroughs related to the
    Internet, Dell will provide equity investments
    and incubation services for selected early-stage
    private companies to accelerate development

Source http//
  • HP
  • NEC
  • Toshiba
  • Fujitsu and
  • IBM (now Lenovo).

Source Nexis - Datamonitor
Marketing Internet Strategy

Integrated Customer Experience

Source http//
Marketing Online Integration Strategy

webMethods B2B for Partners
webMethods B2B
Dell Store
webMethods B2B upgrade from Dell
Source http//
Marketing Strategy
  • A kiosk-concept programme in the US with 21
    outlets set up in various shopping malls. This
    concept debuted in Asia with Dell setting up a
    kiosk in Singapore's Suntec City Shopping Mall.
    Since its pilot, the original 21 kiosks in the
    programme have expanded to 71.
  • Dell's kiosk programme in Asia has been more
    tentative. Singapore's single kiosk is "part of a
    three-month feasibility test in Asia-Pacific".
    Jim Skelding, Dell's general manager of home
    office and small business products, tells The
    Edge Singapore "The kiosk concept in Singapore
    right now is an experiment, as well as to meet
    the festive shopping season. Company wants to
    see what the take-up rate is like, and then
    decide if it makes sense in our marketing plans."
    Penang-based Skelding oversees Singapore,
    Malaysia, and Thailand.
  • In kiosks, Dell showcases a range of consumer
    notebooks, desktops and other computer
    peripherals including printers. Skelding doesn't
    consider the kiosk concept a diversion from
    Dell's philosophy of direct sales over retail
    outlets. "Everything Dell do stands behind their
    direct-selling model," he says.
  • Kiosks had worked well in markets where
  • Dell has reasonably low brand recognition
  • Dell has stopped expanding its market share
  • Placing a kiosk in one location has hit a large
    portion of the population
  • Online purchasing habits are not very strong

Source Nexis The Edge
Internet Advertisements

Dell rely heavily on their Internet
Internet Advertisements

Internet Advertisements

User Segment
Segment characteristics Site use (work vs. play) Buying Behavior Characteristics
Business buyers Represent large businesses Company-wide or departmental buying responsibility Goal-directed (work) Researching price and volume purchasing options Analyzing department-specific component needs
Small business users Small business owners Work-from-home independents Mix of goal-directed and experiential (work and play) Researching component, price, and shipping options Learning about Dell small business programs
Home users Professionals wanting home PC for secondary or recreational use College students Mix of goal-directed and experiential (work and play) Researching general hardware information Comparing prices Researching company news and info about CEO
Non-buyers Recreational Web surfers Students, children Experiental (play) Following up on word-of-mouth references Researching general computer and company information

Globally Integrated Communication

Sales Promotion
Global Marketing Communication
Direct Selling
Public Relations
Personal Selling
Management Secrets
  • Leave Ego at the Door Dell favors
    two-in-a-box management in which two executives
    share responsibility for product, a region, or a
    company function.
  • Dell management believes that collective
    knowledge is created by working in teams.One has
    to be trained to understand the importance of
    team dynamics and participate in productive
    dialogues and discussion. I am important, or
    I am an expert attitude leads to ones ego
    preventing team learning and knowledge creation.
  • No Excuses This is about taking responsibility
    and being accountable for ones actions.
    Employees are encouraged to admit their
    weaknesses and take actions to minimize or
    eliminate them. There should be no them
  • No Easy Targets Employees must contribute to
    profit and growth. In practice this means
    incorporating stretch objectives in appraisal
    plans. S.M.A.R.T objectives in this case should
    be translated as Specific and Stretch Measurable
    and Meaningful Attainable and Aligned Realistic
    and Time and Target-related.
  • No Victory Laps. The founders mantra
    Celebrate for a nanosecond, then move on. A
    number of organizations, after winning quality
    awards or Best Company to Work For awards,
    drift into complacency. Achievements should be
    followed by further achievements and this in
    practice necessitates implementation of
    continuous improvement principle.
  • Worry about Saving Money, Not Saving Face
    Employees should be trained to pull the plug on
    disappointing new ventures. This requires a
    business mindset and tolerant culture.
  • Dells management principles are reflection of
    the five disciplines of the Learning Organization
    presented by Peter Senge in The Fifth Discipline
    (1990). These five disciplines are Personal
    Mastery (individual growth and learning), Mental
    Models (attitude and behavior), Shared Vision
    (direct and honest communication) Team Learning
    (creating synergy within teams) and System
    Thinking (seeing the big picture organizational
    core competence).

Source Nexis Business Week
Some Marketing Questions that Keep Dell Awake at
Do I have the right communication partner? Dells communication is focused more on the Internet users. In order to reach to the masses in the US and to all of their target audience in other parts of the world, Dell should concentrate more on the print and the electronic media.
Do I know enough about my target consumer? Am I reaching them? Dell has focused more on the US market. Dell rely more on their Internet strategy and their campaigns are also net savvy. However, computer literacy in other markets could be much less than in the US market. Dells media plans may not be reaching people across the globe.
Have I invested enough in my brands? Dell believe in customization of products rather than innovating new products based on feedback. There is not much of RD spends in the company.
Are my media agency and creative agency working together to achieve greater overall results? Dells creative outputs have been largely appreciated by analysts. Company grew by about 17 in 2004 because of their effective media plan in the US market.