To be the most successful computer company in the world at delivering the best customer experience in market we serve.

In doing so, Dell will meet: Customer expectations of highest quality; Leading technology; Competitive pricing; Individual and company accountability; Best-in-class service and support; Flexible customization capability; Superior corporate citizenship;

Its the way we do business; its the way we interact with the community. Its the way we interpret the world around us our customers needs, the future of technology, and the global business climate. Whatever changes the future may bring our vision Dell Vision will be our guiding force.

Superior service and support, easy to buy, easy to use

Late 2006, early 2007

Aaron Loke, Director of marketing

Major problem How can Dell sell its products in China through direct selling strategy?

Must or Short-range Objective To implement a direct selling strategy that would attract Chinese customers to buy their products

Want or Long-range Objective To become a leading PC company in China and to deliver the best customer experience in the market. To have a strong brand equity and gain high customer satisfaction in Chinese market.

1.
2. 3. 4.

Supply chain efficiency Strong brand name Price competitiveness Customize products

1. 2.

3.

Lack of core competence in innovative product design Low market share in the largest emerging market of the Asia-Pacific regionChina Marketing strategy

4. 5.

Low quality of its PC component (batteries) The business model, to some degree is contradicted to the consumer culture in China.

1. 2. 3. 4.

Large market of China could increase Dells market share Changing lifestyle of people Product innovation Increased online services such as music, applications, videos, etc.

1. 2.

Changing customer preferences in method of buying products Negative impact on Dells reputation of the biggest battery recall with individual customers

3. 4.

Threat of local competition Government regulations of China

S3. Price competitiveness O1. Large market of China could increase Dells market share

Sell products at a low price

S4. Customize products O2. Changing lifestyle of people

Differentiation

strategy

S3. Price competitiveness S4. Customize products T3. Threat of local competition
Sell

products at a low price

S2. Strong brand name T3. Threat of local competition

With

its strong brand name, Dell has advantage over its competitors.

W1. Lack of core competence in innovative product design O3. Product innovation
Give

more importance on research and development.

W2. Low market share in the largest emerging market of the Asia-Pacific regionChina O1. Large market of China could increase Dells market share
Take

advantage of the large market of China to increase market share through market penetration

W4. Low quality of its PC component (batteries) T2. Negative impact on Dells reputation of the biggest battery recall with individual customers
Outsource

of battery

to other manufacturer

W3. Marketing strategy T1. Changing customer preferences in method of buying products
Organize

in malls.

a computer convention

Dell Critical Success Factors W R WS R

HP

Lenovo

Apple

WS

WS

WS

E commerce
Price Competitiveness Product Quality Market Share Innovation Distribution channel Financial Position Brand Name Customer Satisfaction Local Knowledge and Culture

0.07

0.28

0.28

0.28

0.28

0.13 0.1 0.1 0.13 0.1 0.1 0.1

4 4 2 2 2 4 4

0.52 0.4 0.2 0.26 0.2 0.4 0.4

3 4 3 4 3 4 4

0.39 0.4 0.3 0.52 0.3 0.4 0.4

4 4 4 4 4 4 4

0.52 0.4 0.4 0.52 0.4 0.4 0.4

1 4 1 4 3 3 4

0.13 0.4 0.1 0.52 0.3 0.3 0.4

0.1

0.3

0.4

0.4

0.4

0.07

0.21

0.21

0.28

0.21

2006
Liquidity Ratios Current Ratio Quick Ratio Leverage Ratios Debt to Total Assets Ratio Debt to Equity Ratio Long Term Debt to Equity Ratio Activity Ratios Inventory Turnover 110.74 0.71 3.98 12% 1.11 1.08

2005

1.20 1.16

0.63 2.26 8%

98.56

Fixed Assets Turnover

Total Assets Turnover Accounts Receivable Turnover Average Collection Period

27.88
2.42 12.41 29

29.10
2.12 13.33 27

Profitability Ratios Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Total Assets (ROA) 18% 8% 6% 15% 18% 9% 6% 13%

Return on Stockholders Equity (ROE) Earnings Per Share (EPS) Price-Earnings Ratio Growth Ratios Sales Net Income Earnings Per Share

87%

47%

$1.46 28.12 13.62% 17.38% $1.46

$1.18 28.34 18.73% 15.05% $1.18

Servers, storage, printing, workstations, notebook computers, desktop computers, electronics and accessories products, managed services.

60000

50000

40000 Net Revenue 30000 Net Income

20000

10000

0 2006 2005 2004

The current PC market has been dominated by some big PC makers of Lenovo, Dell, and HP with big scale. The top PC makers in China have established their mature distribution channel and it is easy for them to sell their products to the consumers.

Digital television combines the functions of both PC and TV that people can use The intelligent mobile phone also begins to have the functions of PC and it has the advantages of smaller size and convenience for carrying compared with the PC.

HP- Adopts the different strategies in the different markets of high-end users and low-end users. Lenovo- The strategies of Lenovo are low price and brand.

Apple -Apples strategy is to become the digital hub that connects all of consumers digital devices together through the computer, using software developed by Apple that works with all digital devices, no matter who they are made by.

Dell forayed into the UK, and then to Australia and Japan in 1993. It set up its own manufacturing facilities in Limerick, Ireland (to serve European, Middle East and Africa), Penang Malaysia (1996), Eldorado do Sul, Brazil (1999, to serve Latin America), and Texas and Tennessee in United States.

Dell business is subject to regulation by various federal and state governmental agencies in region where they operate.

ADVANTAGES: Business representatives could have the opportunity to see and examine the product of Dell. Possible increase of sales as well as market share. Dell will be known in Chinas corporate world.

DISADVANTAGES: Additional cost Requires demo products to be used.

ADVANTAGES: Dells products would be known by the users of computer in the company (this might help them spread words about Dell)

DISADVANTAGE: One time transaction only.

ADVANTAGES: No inventory will be required. Chinese Business Companies would be attracted to buy the products of Dell.

DISADVANTAGES: Additional Cost Requires an expert programmer

WEIGHT 5 This criterion of weight is not the consideration of the company. 10 This weight has a moderate consideration in the decision making of the company. 15 This weight of 15 is the main focus of consideration of the company to their decision making.

CRITERION Gain Market Share

3 The company could gain high market share in Chinese market

2 The company could gain average market share in Chinese market Moderate or Average Brand Recognition gain

1 The company could have low possibility to market share in Chinese market Dell brand will not be known in China

Strong Brand Equity

Dell brand will be recognized in China

Attract More Sales

High possibility to

Average possibility to

Low possibility to

increase sales

increase market share

increase sales

Addressing Direct Selling Dell could greatly Method in China enhance its direct selling strategy in China Maintenance of Supply Chain Efficiency Dell can still maintain its operation efficiently.

Partially enhance its direct selling strategy in China

Dell could not enhance its direct selling strategy in China

Dell can fairly maintain its Dell cannot maintain its supply chain efficiency. supply chain efficiency

ACA 2 ACA 1 Partnership

ACA 3 Develop specific computer lines for big retailers R 2 3 1 2 30 45 10 30 S

DECISION MATRIX

Computer
with Chinese Convention Businesses W R 3 2 3 3 S 45 30 30 45 3 3 2 3 R 45 45 20 45 S

Gain Market Share Strong Brand Quality Attract More Sales Addressing Direct Selling Method in China Maintenance of Supply Chain Efficiency TOTAL

15 15 10 15

10

15

60

160

170

120

Based on the given Alternative Courses of Action (ACA) and further analysis of the advantage and disadvantages of each, we concluded that the ACA #2, which proposes to send proponents to Chinese businesses to promote their products and create contracts with them, is the best alternative.

In further study and survey, we therefore conclude that Dell could gain more influence and increase its market share in Asia-Pacific region most especially in China by building and creating a partnership with the largest Chinese businesses. Dell will be their major supplier of PCs and other services of those companies.

ACTIVITIES Selection of target market (Large companies). Prepare or conduct a good proposal.

RESPONSIBILITY Marketing Department

TIME FRAME 2 weeks

Marketing department

1 month

Approval of top management.

Set appointment with the top management of large companies. Make a contract or deal with them regarding

Top management
Marketing department

2 weeks
2 months

Top management

1 week

the terms of payments, shipments of

products etc.

Dell Financial Statement fiscal year 2006 www.dell.com www.lenovo.com http://www.interbrand.com http://www.fortune.com www.hp.com www.wikipedia.com www.google.com