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Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors

8ecommendaLlons Company 8eporL


Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 8LSLn1Lu 8? uLLA kAuAM8A8l ASPA vlSPAL
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons Mlsslon SLraLegy SLaLemenL - Mlsslon SLaLemenL 1o provlde cusLomers wlLh
superb value hlgh quallLy relevanL Lechnology cusLomlzed sysLems superlor servlce and supporL
and producLs and servlces LhaL are easy Lo purchase and use" - SLraLegy SLaLemenL 1o do buslness
wlLh lLs consumers oneonone Lhrough Lhe phone or lnLerneL"
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 1lmellne 1980 urchased flrsL compuLer and Lakes lL aparL 1983 WanLed Lo beaL
l8M Sells upgraded Cs ouL of u1 uorm 8oom 1984 8eglsLers uell CompuLer CorporaLlon u8A C's
LlmlLed Sells ulrecL Lo end users 1986 12 mhz 283 based sysLem 30 day money back guaranLee 1987
lnLernaLlonal subsldlary ln uk 1988 lnlLlal lC $30 mllllon 1989 AccumulaLes excess lnvenLory 1990
llrsL Lo sell Lhrough reLall CompuSA 8esL 8uy WalMarL 1991 ConverLs enLlre llne Lo 486 hlgh
Lechnology prlorlLy 1993 $2 8llllon ln sales
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 1lmellne 1994 Launches LaLlLude noLebook SeLLlng new records on baLLery llfe
1996 lnLroduces ower Ldge servers for small and medlum server markeLs 3 Solldlfles lnLerneL
markeL $12 mllllon per day from cusLomers SeLs up suppller neLwork 4 8evenue hlL a record $23
bllllon 3 Sales Lopped $30 bllllon 6 Annual sales passed $40 bllllon 7 uell launched xS a llne of
hlghperformance 8 Annual sales hlL a record $3391 bllllon 2006 uell shares fell 47 per cenL
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons Company Cvervlew - PeadquarLered ln key SLaLlsLlcs 8ound 8ock 1exas
Company 1ype ubllc (nASuAC uLLL) llscal ?earLnd !anuary - lounded ln 1984 8y 2003 Sales (mll)
$49203 1?ear Sales CrowLh 138 Mlchael uell 2003 neL lncome (mll) $3043 1?ear neL lncome
CrowLh 131 - Sells WlnLel uays supply ln lnvenLory 3 sysLems vla Lhe dlrecL model Source of all
daLa ls Lhe uell 2003 10k flllng unless oLherwlse noLed
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uell's SLraLegy ulrecL lrom uell - Sales Cf CompuLer SysLems ulrecLly 1o
Consumers - LllmlnaLlon of 8eLall Mlddlemen - CompuLer SysLem ConsLrucLlon 8ased upon
lndlvldual CusLomer needs - Culck lnLroducLlon of SLaLe Cf 1he ArL 1echnology - LllmlnaLlon Cf
Peavy lnvenLory lnvesLmenL
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uell's SLraLegy ulrecL lrom uell LffecL Cn Worklng CaplLal Cash Converslon Cycle
0 - 8educLlon Cf 2000 2001 2002 2003 2004 2003 10 lnvenLory 20 30 40 2004 2003 2002 2001
2000 2003 lnvenLorles 28!an03 30!an04 !an3103 leb102 leb201 !an2800 32 uays of sales
ouLsLandlng 31 28 29 32 34 4 uays of supply ln lnvenLory 3 3 4 3 6 73 uays ln accounLs payable 70 68
69 38 38 37 Cash converslon cycle 36 37 36 21 18
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uell SLraLegy for lnulA - uell wlll undersLand Lhe lndlan markeL and [udge Lhe
sales performance before Lhey Lake a declslon on manufacLurlng unlL - lndla ls now Lhe 13Lh markeL
for uLLL - 1he $283bllllon uell CompuLer CorporaLlon a compuLer sysLems company and provlder
of lnLerneL lnfrasLrucLure wlll now sell lLs producLs and supporL operaLlons ln lndla - ln boLh
sofLware and hardware as well we have ouLsourclng from lndla as well
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons ConLlnue - uell wlll lnlLlally deal dlrecLly wlLh cusLomers ln ma[or clLles and
seL up a call cenLre aL 8angalore Lo caLer Lo Lhe lndlan markeLquoL - uell wlll concenLraLe on selllng
lLs producLs Lo Lhe buslness houses - 8lg MnCs and buslness houses are our prlme markeL -
CusLomers could place Lhelr orders elLher Lhrough Lhe company Web slLe or dlal a Loll free number
he sald addlng Lhls would help lL Lo cuL down dlsLrlbuLlon cosL by 6 Lo 8
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons ConLlnue - ln Lhe lasL few years Lhe company had sold abouL 60000 unlLs ln
lndla buL expecLs a Lrlple dlglL growLh over Lhe nexL Lwo years - uell plans Lo sLrengLhen lLs servlce
level and coverage by addlng more servlce parLners Lo Lhe currenL arrangemenL wlLh 1aLa lnfoLech
- uell ls plannlng for local sourclng and merglng of componenLs and worklng Lo vlrLually lnLegraLe
Lhe loglsLlcs provlder lnLo worldclass supplychaln managemenL sysLem Lo enhance cusLomer servlce
quallLy
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons ConLlnue - uell ls ln Lhe process of Lylng up wlLh varlous local companles for
Lhls purpose - Lhe producLs wlll be compeLlLlvely prlced as Lhe prlce of componenLs have been golng
down drasLlcally - uell belleves LhaL Lhe Larlff sLrucLure whlch ls a problem rlghL now wlll go down
evenLually and Lhe producLs wlll become much cheaper
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 1argeL MarkeL uLLL have always been suppllers for buslnesses and LhaL ls Lhe way
lL ls golng Lo be ln lndla uLLL ls no1 ln Lhe buslnesses markeL whlle number four ln Lhe consumer
markeL 8y Mlchael uell
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons Company value uell's SLraLegy ulrecL lrom uell LffecL Cn Worklng CaplLal
SelecLed Worklng CaplLal - 8educLlon of $3000 AccounLs $4000 $3000 8ecelvable/LxLenslon
$2000 of AccounLs ayable $1000 $0 2001 2002 2003 2004 2003 2004 2003 2002 2001 2003
CredlLlng (ln mllllons of $) 28!an03 30!an04 !an3103 leb102 leb201 $ 4414 AccounLs
8ecelvable $ 3633 $ 2637 $ 2269 $ 2424 8893 AccounLs ayable 7316 3989 3073 4286 78
Allowance for doubLful accounLs 84 71 68 69
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons roblems lssues of Case SLagnanL Sale of CompuLers SLagnancy ln 8evenue
ln Lhe furLher course of presenLaLlon we wlll Lry Lo explaln whaL dell dld Lo overcome Lhls lssues
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons Company value lnLanglble value of uell MarkeL CaplLallzaLlon 8reakdown AsseLs
$23213 8u of neL 24 LxpendlLures 8evenue (ln mllllons of $) uell $463 1 lnLanglable
$73913 Apple 489 6 76 P 878 4 Source uell Apple and P 10k flllngs
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons SLorage CS Server SofLware ueskLop noLebooks erlpherals
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons erformance
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons erformance neL 8evenue (ln mllllons of $) $60000 $30000 $40000 $30000
$20000 $10000 $0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2003
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons erformance lndusLry Analysls neL 8evenue CrowLh 40 33 30 23 20 13
10 3 0 1997 1998 1999 2000 2001 2002 2003 2004 2003 3
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons lndusLry Analysls WhaL drlves Lhls lndusLry growLh? - 1echnology - lnLerneL -
AppllcaLlons - rlclng
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons lndusLry Analysls uell's MarkeL SegmenLaLlon 8evenue 8y MarkeL 8evenue 8y
roducL Asla aclflc !apan 11 LnLerprlse 21 Lurope uS ueskLops 22 8uslness 30 32
noLebooks 29 uS Consumer 13
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons CompeLlLors
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons CompeLlLors key numbers uell P l8M $49203 $79903 $ 96293 Annual Sales ($
mll) $97647 $38026 $149402 MarkeL Cap ($ mll) roflLablllLy uell P l8M lndusLry MarkeL 190
283 423 199 484 Cross roflL Margln 62 43 88 43 62 neL roflL Margln 469
93 283 233 117 8eLurn on LqulLy 131 46 77 83 20 8eLurn on AsseLs 433 83
189 218 37 8eLurn on lnvesLed CaplLal Source Poovers
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons CompeLlLor envlronmenL Lvolvlng 2006 2000
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uell servlces buslness conLlnues Lo rapldly expand
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons SlgnlflcanL growLh opporLunlLy for uell
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons C SuL? CPAlnS CusLomer CusLomer uLL vlrLual lnLegraLlon ulsLrlbuLlon
Channels uLL uell uSP ManufacLurer uSP Suppllers Suppllers 1yplcal C Supply Chaln uell Supply
Chaln (Compaq P l8M eLc)
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons Supply Chaln ManagemenL CusLomers Pub lacLory
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons CrowLh A blg [ump"
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons rlclng MaLrlx Plgh Medlum Low lor Loyal Plgh CusLomers Medlum new CuallLy
Medlum CusLomers MarkeL 8eLallers Low rlce
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uell roducL Mlx Cwned roducLs 1hlrd arLy roducLs ueskLops SwlLches
noLebooks LlecLronlc sofLware Acc Servers SLorage rlnLers
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons roducL Llne ueskLop noLebooks Servers lnsplron noLebooks oweredge
1ower ulmenslon ueskLop LaLlLude noLebooks servers CpLlplen ueskLop uell reclslon
Moblle oweredge ack uell preclslon ueskLop noLebooks CpLlmlze Servers Cpen source
ueskLop Cpen source oweredge 8lade noLebooks Servers SLorages SwlLches LlecLronlc SofLware
Acc ower vaulL dlrecL ower over eLherneL ueskLop acc aLLached sLorage Pandheld 1able
C's swlLches ower vaulL neLwork Managed swlLches noLebook acc sLorage Web managed
noLebook ower ower vaulL Lape M3 player swlLches MonlLor eLc backup sLorage
LnLerprlse class sLorage
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uLLL CusLomers
8easons lor SLagnanL Company Cvervlew uell's SLraLegy Company value erformance lndusLry
Analysls CompeLlLors 8ecommendaLlons sale lshlkawa ulagram ??? CompeLlLors 1ech lacLor LoglsLlcs
no lace Lo lace Comm LaLe LnLranL ulrecL SupporL 1ax rlclng lacLor
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons SLudy Survey Survey of Companles - PulC SLd Llfe lns - 8L - Codre[ Lawklm
- anLaloons
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons uLLL CuesLlonnalre 1)Whlch Company's Server ?ou use ? uell Pp l8M Lenovo
CLhers lz Speclfy 2)Whlch klnd of Server you use? 3)WhaL ls Lhe purpose of noL
urchaslng uLLL producLs ? 4)Who are Lhe supporL parLners of uLLL who looks afLer Lhe servlce ln
lndla for you ? 3) Whlch Company erlpherals do you use ? 6)WhaL are Lhe appllcaLlons
for uell producLs? 7) uo you feel uLLL ls successful ln sale of compuLer and lLs perlpherals ln lndla ?
8) ln fuLure do you Lhlnk uLLL would be able Lo caLer Lo your requlremenLs keeplng ln mlnd Lhe
currenL scenarlo ?
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 8ecommendaLlons - MalnLaln a moderaLe markeL share growLh ln Lhe C lndusLry
whlle sLlcklng Lo low prlce hlgh quallLy sLraLegy - Crow buslness segmenL (servers) - ConcenLraLe on
global expanslon - ursue governmenL conLracLs - Lxpand grow lucraLlve prlnLer and compuLer
perlpheral producLs - 8uy back sLock
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 8ecommendaLlons - AnalysLs are across Lhe board on sLock recommendaLlons
- uell has meL or exceeded lLs pro[ecLlons for 16 sLralghL quarLers - Slowlng growLh buL noL levellng
ouL - no slgns of lndusLry collapse ln Lhe near fuLure - uell conLlnues Lo galn markeL share and P
has forfelLed prlce compeLlLlon
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons
Company Cvervlew uell's SLraLegy Company value erformance lndusLry Analysls CompeLlLors
8ecommendaLlons 1hlnk Slmple Llve Slmple Llfe Wlll be Slmple"