CASE STUDY ANALYSIS

DELL INC.: TIME TO DISCARD DIRECT SELLING MODEL?

Contents

1. Abstract

2. Introduction

3. Methodology

4. Results / Findings

5. Strengths / Weaknesses / Analysis

6. Recommendations / Conclusion

Appendices:
Appendix A
Appendix B
Appendix C
Abstract

Dell is a multinational computer company which managed to stay in the first place of computer system sales for over a decade. Its strong and revolutionized strategy of direct selling computers to the customers increased its success in the computer companies’ field providing it with a competitive advantage. However, the last year the revenue trend shows a significant decrease while other competitors’ share of the market has become threatening. …show more content…

These data showed that Dell’s sales depended excessively on the American market. On the other hand, the further growth of PC demand in the emerging markets such as China and India has been highly expected recently. Indeed, the forecast for 2007- 2012 states that other regions rather than America will play a significant role in PC market share (6). Particularly, PC suppliers seem to focus on Asia/Pacific area as there was a growth of 26% in Asia/Pacific excluding Japan between 2004 and 2005 (7).

The customer behavior of Asian people is likely to differ from that of American people in terms of purchasing PC. For example, although Dell launched its PC business by using the direct sales model in the Japanese market from 1996, its share in 2000 was only 3-4%. According to the consumer’s questionnaire conducted by Dell in 2001, Japanese consumers tend to prefer purchasing PC after watching and touching it in a retailer shop. Moreover, some Japanese customers said that they wanted to be advised which PC they should buy from experts in a retailer shop. In order to satisfy these needs of Japanese consumers in 2002, Dell set up ‘Dell real site shop’ under its direct management. In addition, Dell formed an alliance with ‘Big Camera Incorporation’ which is one of the big retailers of electrical appliances in Japan. As a result,