This document contains a case study analysis of Dell Computer Corporation conducted by a group of students. It identifies 11 key issues related to Dell's strategy, including their focus on product customization, direct distribution model, inventory management practices, and customer service offerings. It also outlines 3 strategic decisions Dell's leadership needed to make regarding balancing product emphasis, entering the server market, and pursuing international expansion. The group provides their perspective on each issue and recommends Dell focus on multiple product categories, enter the emerging laptop and server spaces, but avoid international expansion at that time.

1. Date- 12th February
Strategic Marketing
2009
Case-Study Write-up
Dell Computer Corporation
Strategic Marketing
Suggested by-……….Dr. Mayank Saxena
Submitted by-………Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class-………………..PGPSM 4th Term
College-……………..CH Institute of management Studies
Subject-……………..Sales Management
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS

2. Date- 12th February
Strategic Marketing
2009
“Major Issues of the Case and our stand
point”
There are following key issues related to the case-
1. Product designing: Customization (Good Strategy) - One of the
primary areas for decision making at Dell was product designing. As
the Dell offered customized product and it was succeed in making
differentiation on the unique product designing process. The company
could enter in a competitive market and could maintain its position just
because of the custom made products. As mentioned in the case that
Apple was technological sound and leader in technology, hence it was
very tough to Dell to compete with Apple in the same competency.
Therefore the product customization strategy was key competency of
the company which gave it competitive advantages. In addition to these
points we would like to put one more supportive point that IBM’s
concentrated efforts to make the PC legitimate option in the minds of
the corporate customers led to an explosion in the demand for IBM PCs
which the company could not satisfy.
2. Working Capital Scarcity- AS mentioned in the case that Dell’s
sales, was $3.3 billion in 1994 and available cash to perform
operational activities was $20 million. Here if we calculate the ratio of
working capital (Cash) to sales then that is 0.606, which is too less
because ideal ratio is one. The available amount can not serve the
purpose of going for abroad operations, as the company is planning for
that.
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS

3. Date- 12th February
Strategic Marketing
2009
3. Tough Competition: Restless approach (Good Strategy) - Vice
chairman of the company stated that computer industry obviously will
grow but there will only be handful of players with a coherent strategy
and consistent bottom line. For the purpose the company adopted
creative and restless approach. One of the strategies adopted by the firm
was to be fundamentally strong.
4. Selection of Distribution Mode: Direct through vendors (Good) -
Dell was delivering its products mainly through vendors directly. The
issue in selection of appropriate distribution mode was that, by the time,
distribution was mainly through electronic stores such as Radio Shack,
Computer Retail Stores and smaller independent specialty electronic
stores. So selection of virtual market at starting is not more than taking
a risk. But at all, the strategy was successful. The company could
differentiate itself from others just because of unique distribution
channel.
5. Delivery Service (Good Strategy)- Dell was able to provide services
such as 24-hour hotline for complaints, 24- to 48- hour guaranteed
shipment of replacement parts. This strategy gave the Dell competitive
advantages.
6. “Made-to-order” Strategy- Dell’s focus was on selling somewhat
more customized products via mail orders to business customers.
Manufacturing cycle “made-to-order” giving it important economies
benefits.
7. Customer Relationship Evaluation Criteria- The clients used to
evaluate vendors based on product reliability, compatibility with
installed base and stability in technology. In the customer relationship
segment there were following competitors- Compaq, IBM, HP and
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS

4. Date- 12th February
Strategic Marketing
2009
other leading brands. But instead of large competition Dell was able to
maintain its position and good relationships with its clients. Apart from
this Dell focused on greater value addition resulted in higher gross
margins for Dell in the relationship segments.
8. Inventory Management: 30 days inventory (Good Strategy) – As
Dell offered customized products therefore it is needed to have stock of
product components. The company maintained around 30 days of
component inventory so that it can replenish quickly.
9. Trouble Shooting Services (Beneficial Initiative) - Dell had over
300 technical support representatives who could be accessed by phone
at any time. Most problems were resolved in 24 to 48 hours. These
strategies gave benefits to the company over the competitors.
10. Laptop offerings- Dell was able to anticipate the future and changing
customer preferences as a result it started offering laptops. The
strategies adopted by the firm assisted in growing it in competitive
market.
11. Retail Channel (Not successful)- Michael Dell realized that the
company’s foray into retail channels was not successful. Retail channel
did not permit Dell to use of its major attributes, mass-customization of
its products.
“Strategic Decision”
Dell and Topfer were supposed to resole three strategic decisions-
1. Balance of product emphasis- First of all they had to decide the
balance of product emphasis between laptops, desktops and services.
Means they were supposed to had clarity about their focus area. Here
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS

5. Date- 12th February
Strategic Marketing
2009
we, as strategists, would suggest that instead of paying attention on
single strategy they should take care of both the things. Products are
needed to expand the market but services assist in making loyal
customers and for long term business proper balance of all these things
is needed. Though the laptop market is different from desktop market.
It is emerging trends consequently should not be ignored. There were
following issues related to laptop markets-
a. Laptop business- Yes, Dell should enter again into the laptop
market because this is emerging trends in customer preference.
Customers preferences can not be ignored therefore Dell needs
to enter into laptop market.
b. Distribution of laptops- In our opinion there is no harm in
selling the laptops by the same distribution channel. We have
following supportive points in above decision-
i. One is that Dell is having already setup for direct
distribution and it was successful
ii. Secondly, retail channel, as checked by Dell, was failed
to serve the purpose. Hence Dell should use the same
distribution channel
2. PCLAN Server Market- The second area of concern was Dell’s
strategy in the PC LAN server market. This market was emerging as
one of the dynamic, fast growing and fiercely competitive market in the
industry. Due to not providing the feature/service Dell’s many of the
customers were shifting to competitors products. One strong point here
we would like to discuss is that if the company is not accepting and
entertaining new trends then its difficult for it to survive in the market.
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS

6. Date- 12th February
Strategic Marketing
2009
There were only few issues like quality, reliability of the products,
which could handle by the firm easily.
3. International Expansion- On this particular point of decision we
would like to comment only that global distribution of the customized
products with the same efficiency and effectiveness is not possible. If
the company, suppose, go for the international operations and gets
failed then there are very high chances to lose its market value and
image. Hence we would not suggest for Dell to go for international
operations at this point of time.
Thanks
Group Name- Aarti Thakur, GhanShyam, Pawan Gehlot, Rakesh Sharma
Class- PGPSM
College- CHIMS