Introduction and Perceptual Mapping on Dell Computer

Presented by: Frans Suryadi & Nindy Darista

The successful history

By the late 1990s, Dell was firmly in place as the worlds number one direct seller of computers. <50% sales in Dells transaction via Internet. In 1994 Dell launched a new line of notebook computers and expanded efforts to increase overseas sales.

Case
Distribution
E-commerce business. The company's strategy of selling over the Internet -- with no retail outlets and no trader. choice and control way. B2B. IN 1995 the company began selling computers through second hand sales of computers (Ex. Auction sites like eBay and uBid). And nowadays, Dell company sell their product to kiosks in mall.

Case analysis
As of the end of the year 2000, the PC industry has four make and sell competitive midrange performance PCs. There are Dell, IBM, Compaq, and HP. In study market for PC found that most customers considered two important thinks: Flexibility and Performance.

Flexibility & Performance

Ability to run several different kinds of software To be easily connected to printers Suitability for business as well as educational or game use Speed of Internet connection & internet calculation Support of the highest-end software programs Reliability and accuracy of calculations

Perceptual Gap Maps

Based on Attribute Ratings
Ask market participants to tell what attributes they believe products have.

Factor analysis (Performance & Flexibility)

The position of market place

FLEXIBILITY

Hp
2 1

COMPAQ
1 2
PERFORMANCE

-2

-1
12-

DELL

IBM

The position of Dell in Industry PC Market

Highest performance is IBM. Example: IBM System X server that able to run critical database applications, support a high-traffic Web site and deploy a redesign of a mission-critical sales application. Highest flexibility is HP. Example: HP Integrity servers can run multiple operating systems (HP-UX, Windows, Linux, and soon OpenVMS) simultaneously.

The Competitors of Dells Company

Main Competitors
Performance: HP Flexibility: IBM

Benchmarks
Performance: IBM Flexibility: HP

Additional Information
About the competitors: PC unit sales per 5 year
Worlwide: 1991-95 1996-2000

Dell (#M) HP & Compaq (#M) IBM & LENOVO (#M) Acer (#M) NEC & PB (#M) Apple (#M) Toshiba (#M) Total PC sales (#M)

5.4 21.3 18 1.7 9.3 16.2 4.6 201

42.1 95 43.5 9.5 25.7 17.6 15.9 492

Contd
Nov.1999 Compaq began to work with Microsoft create web-base computer system called MSN companions.
In 2000,HP become major player desktop,laptop,& servers for many different market. Since 1990,IBMs annual sales growth has trailed behind the US economic growth due to global deregulation & competition.

About the marketplace:

Dells biggest enemy:commoditization

Some of the advantages of the current business model will turn against Dell: 1. Dell can no longer benefit as much from falling prices as already cheap components suffice to build a suitable PC. 2. The required just-in-time procurement will make components more expensive then with bulk procurement. 3. It also creates relatively higher assembly costs due to complexity so the price typically more expensive

Factors that make dent in Dells market Share

Ex: Acer and Lenovo 1. The competitor set lower prices which result in very impressive sales gains 2. High rate of failures on Dells product so it might be displaced by others.

Contd
3. Their brands is already known by their home-based market and it reflects to the rise of the Asia/Pacific-based manufacturers.
4. Dells positioned is not as a lifestyle product but Dells image is more related to the smart delivery and direct model that it has.

Thank you